120 cease-and-desist letters in 19 days – an abuse of rights?

The Kammergericht Berlin had to decide on the abusiveness of a cease-and-desist letter, in which the sender, despite only negligible business activity of its own, had sent mass costly cease-and-desist letters to alleged competitors.

A scarcely still active real estate agent sent costly cease-and-desist letters to 120 competitors within 19 days. The competition law cease-and-desist letters and applications for injunction were based on the assertion of allegedly unrealistically low monthly instalments in corresponding real estate advertisements. The real estate agent also demanded a cease-and-desist fee in the amount of EUR 150.00. One competitor regarded this conduct as an abuse of rights and refused to issue a declaration of commitment under penalty of fine.

Court decision
The Kammergericht Berlin decided in its judgment of 22.07.2011 – Az. 5 W 161/11 in favour of the competitor.

The conduct of the sender would be unlawful if the applicant, with only negligible business activity of its own, had been sending mass costly cease-and-desist letters for many years in a manner that suggested a course of action primarily aimed at profit-making. This was the case with 120 cease-and-desist letters in 19 days. A cease-and-desist letter is always abusive of rights if the enforcement of fair competition no longer takes centre stage, but rather an extraneous objective. The generation of cease-and-desist costs is one such objective.

Conclusion

Although one must assume that the assertion of unrealistically low instalments does indeed constitute misleading and thus competition-law infringing conduct on the part of the competitors, a sender of cease-and-desist letters may lose in court proceedings on the grounds of abuse of rights if it can be proven that the sender has only issued the cease-and-desist letters for the purpose of generating cease-and-desist costs. With 120 cease-and-desist letters in 19 days, this was obvious to the KG Berlin.