The Federal Court of Justice (BGH) resolved a long-standing dispute between Santander Bank and German savings bank Sparkasse regarding each bank's red logo, deciding in favor of Sparkasse's trademark color.

Both of the financial institutions had been using the color red for branding purposes for decades. However, with Santander expanding globally to include banking services in Germany, Sparkasse claimed the Spanish bank engaged in copyright infringement, leading to a major legal row.

Santander had initially managed to succeed in canceling Sparkasse registered trademark last year, arguing that colors were not characteristics of products and services.

However, Germany's highest appellate court said that under certain circumstances colors could exclusively be associated with certain products and services. The BGH also stressed that Sparkasse spent more than 130 million euros ($143 million) annually for such branding purposes across its network of 15,000 braches in Germany.

Santander, by contrast, holds only about 320 branches in Germany and has had a shorter history of asserting its brand identity, having entered the country's banking sector in the 2000s following a series of takeovers.

Sparkasse President Georg Fahrenschon said the court's decision was an important one.

"Sparkasse's red color provides customers with a sense of orientation in the marketplace," he said.

In a separate case, the foreign language software company Rosetta Stone had previously asserted in front of German courts that colors can be protected as trademarks.

Unexpected outcome

The verdict came as a surprise after court proceedings had shown significant methodological shortcomings on part of the Sparkasse group in proving that the majority of its customers associated the particular hue of red used by Sparkasse exclusively with the financial institution.

It remains unclear what impact the court decision will have on Santander's operations in Germany. The bank's brand identity is used across the globe for the sponsoring of sports tournaments and other events.

ss/kms (AFP, dpa)