43 Cease-and-Desist Letters per Week an Abuse of Rights?

An online retailer had his solicitor send cease-and-desist letters to 43 competitors in one week for various competition law violations. The online retailer had set very short deadlines for the submission of a declaration of undertaking. The Higher Regional Court (OLG) Hamm had to decide whether this cease-and-desist activity constituted an abuse of rights.

An online retailer, who inter alia distributed letterboxes, sent cease-and-desist letters to his competitors because they also advertised letterboxes with the advertising claims 'environmentally friendly produced' and 'tested quality'. The Regional Court (LG) Hagen upheld the online retailer's position and classified the advertising as anticompetitive.

Subsequently, he had his solicitor issue 43 cease-and-desist letters in one week against competitors. This number has since increased to 200 cease-and-desist letters.

The competitors considered this type of mass cease-and-desist activity to be an abuse of rights because it bore no reasonable proportion to the online retailer's economic success.

Court Decision

The Higher Regional Court (OLG) Hamm decided by judgment of 15.09.2015 – Az. 4 U 105/15, that the assertion of competition law claims against the competitors in the light of the mass cease-and-desist letters constituted an abuse and was therefore impermissible.

An abuse is present if the person entitled to the claim in asserting the claim pursues predominantly extraneous interests and objectives that, viewed in isolation, are not worthy of protection, and if these appear as the true driving force and the controlling motive for the initiation of proceedings. An absence or complete recession of legitimate competition law objectives is not required for the assumption of an abuse. It is alone sufficient that the extraneous objectives predominate.

By sending numerous cease-and-desist letters, the online retailer had incurred a cost risk that bore no reasonable economic relationship to his own economic success. It was therefore to be assumed that the online retailer pursued predominantly extraneous objectives with the mass cease-and-desist letters.

Conclusion

It is not fundamentally an abuse of rights for an enterprise to issue a high number of cease-and-desist letters against its competitors in the case of a large number of violations. However, if there are further indications that the enterprise issuing the cease-and-desist letters is not primarily concerned with eliminating the violations, an abuse of rights may be present. As a result, legal enforcement is then impermissible.