The cease-and-desist declaration with penalty clause in competition law, trademark law design law and internet law

A cease-and-desist declaration with penalty is usually attached to a warning letter. From this pre-formulated declaration of cease and desist with penalty, the experienced practitioner knows whether the opposing lawyer understands his trade and whether he has worked carefully. It usually formulates claims for injunctive relief, information, determination of damages, reimbursement of warning costs and destruction of the infringing products.

"Form of infringement" ("Verletzungsform") and "infringing act" ("Verletzungshandlung")

The cease-and-desist obligation is generally the first pre-formulated obligation of the plant to issue a warning. It is the act of infringement poured into the concrete form of infringement. Here the person issuing the warning must describe exactly which action of the alleged infringer he would like to have omitted in the future. While the "infringing act" is the facts of the case, the "form of infringement" is what the warning party would like to see omit in the future.

In order not to expose himself to the risk of a negative declaratory action, he must also limit his prohibition to such future actions as are also prohibited by law. The right to cease and desist is often the most important and, because of the high value of the object, by far the most expensive claim for the person issuing the warning - besides the right to information. It does not presuppose any fault. The objection "I didn't know that" is therefore irrelevant.

Often the form of infringement in the warning is too broad. Many cautioners would like to receive with it a much further omission requirement by contract, than they would be entitled by law. The purpose: In future, the person issuing a warning should also pay a contractual penalty for such actions, which would not even be prohibited by law.

Example:
If you offer T-shirts with a trademarked name on eBay, you do not have to undertake to refrain from "importing" such T-shirts if you have not introduced them yourself.

If the dunned party submits to such a broad form of infringement, an effective cease-and-desist agreement has been concluded in principle. Limiting the form of infringement in such a way that it corresponds to the act of infringement prohibited by law is therefore the most important task of the admonitioner.

"In particular" formulations

Many pre-formulated cease and desist declarations contain a general description of a legally prohibited act followed by a "in particular" part. It then describes the infringing act. Such formulations are too vague for some Higher Regional Courts before the "in particular" part. The deletion of the "In particular" addition would therefore be a partial withdrawal of action (OLG München BeckRS 2009, 23375).

Cease and desist orders repeating the wording of the law

The text of the law is also quite often reproduced. In a court application, this would only be permissible in exceptional cases, namely only if the injunctive relief could not otherwise be formulated at all, so-called "orders repeating the wording of the law".

In most cases, the pre-formulated cease-and-desist declaration with penalty clause contains a more comprehensive ban than the law would grant the cease-and-desist letter. The purpose of the exercise is obvious: If the dunned party makes the pre-formulated declaration, a cease-and-desist agreement is concluded. For a future offence of the admonitioner it then only depends on whether the offence concerns an action, to whose omission the admonitioner has committed himself. Whether this action is illegal is then irrelevant. Thus, for example, the person issuing the warning may also demand contractual penalties for future minor infringements (see BGH v. 10.6.2009 - I ZR 37/07 - Unrichtige Aufsichtsbehörde).

Two wordings have become established as the amount of the contractual penalty. Either a fixed amount per infringement is demanded, e.g. because of the value in dispute of the district courts € 5,001.00. Or a contractual penalty according to the so-called "modified Hamburg custom" is demanded: For each infringement, the infringer shall pay an appropriate contractual penalty to be determined by the creditor, the appropriateness of which must be verified by the competent court in the event of a dispute. However, the amount of the contractual penalty may not be determined by the court. The court may only review a contractual penalty fixed by the creditor (BGH GRUR 1978, 192 - Hamburger Brauch).

Information, submission of invoices

The third pre-formulated obligation typically concerns the information of the infringer. On the one hand, it serves to reveal the origin of the infringing goods (independent claim for information) and to enable the infringing party to calculate his damage (dependent or accessory claim for information).

Since 1.10.2009 there is also the independent "third party information". In the event of an obvious infringement of rights or after an action has been brought, forwarding agents, warehouse keepers or the operators of online auction platforms may also be obliged to provide information.

Determination of the liability for damages

Usually as the next pre-formulated clause, the determination of the obligation to pay damages shall be acknowledged.

Destruction of infringing goods

In the event of an infringement of industrial property rights, a destruction of the infringing goods is often demanded. This claim can only be enforced if it is proportionate in the specific case.