Everywhere in Berlin the big furry animal is seen in all possible and impossible contexts: on the city's coat of arms, in the zoo, on the flag, as souvenirs, in art, on T-shirts, Buddy Bears…
Berlin is truly the city of bears.
The city's flag and coat of arms carries the upright black bear - The bear of Berlin - and that's probably where it all comes from. Maybe it's the resemblance between the German word for bear (Bär) and the city's name that has given rise to it? The bear appears for the first time in connection with the city of Berlin on a seal from 1280 and has since then fought for the place with the eagles known from Prussia and Brandeburg's coats of arms.
Of course, that's also why you know the Berlin Film Festival receives a bear as the visible proof of recognition.
Most souvenir stores would like to sell you something with a bear on it, e.g. their Buddy Bears, the same goes for most clothing stores that have eyed the opportunity to make some money on tourists' penchant for symbolism. Certain stores specialize in the city's furry landmarks, and sell nothing but Buddy Bears, cute teddy bears and things with bear motifs. I even had to wear a T-shirt with a test in front of a big bear: "Berlin 2009".
Also read about United Buddy Bears here.