Cease and Desist Letters – Made Easy?

Since the "Act Against Unfair Business Practices" (Gesetz gegen unseriöse Geschäftspraktiken), a copyright cease and desist letter is ineffective if it lacks a notice indicating the extent to which the cessation of conduct obligation proposed in the cease and desist letter goes beyond the alleged infringement of rights. Thus, if the manufacturer objects to a seller regarding the offering of a counterfeit product, the cease and desist letter is nonetheless effective, even though the cessation of conduct declaration proposed by the manufacturer, without the corresponding notice in the cease and desist letter, also includes the "placing on the market" and "importation" of the counterfeit product feared by the manufacturer? The Higher Regional Court (OLG) Frankfurt says yes.

The manufacturer of a well-known bar stool had unsuccessfully sent a cease and desist letter to a seller who was offering a counterfeit of his bar stool in his catalogue. In the cessation of conduct declaration proposed by the manufacturer, not only the future cessation of offering, but also of "placing on the market" and "importation" was included.

The seller objected that the cease and desist letter was defective and ineffective, inter alia, because the cease and desist letter did not – as now statutorily required – explain the extent to which the proposed cessation of conduct obligation (offering, placing on the market and importation) goes beyond the alleged infringement of rights (offering).

The Court's Decision

The Higher Regional Court (OLG) Frankfurt decided in its order of 11.11.2014 – Az.: 11 U 73/14 that the statutory wording was in any event unclear and had to be interpreted restrictively. The court reasoned that from the concrete infringement of rights in question here, namely the offering of the counterfeit in the catalogue, a claim for cessation of conduct could also follow for the other forms of conduct involving placing on the market and importation of the counterfeit. This would be the case if, with regard to these forms of conduct, there was a risk, based on the alleged offering of the counterfeit, that they would equally be committed for the first time, which would have to be examined on a case-by-case basis. The offering of a product within the framework of a catalogue as an invitation to conclude a sales contract would in principle be suitable to establish the risk of first-time commission for the forms of conduct of placing on the market and importation as a preliminary form of conduct.

According to the purpose and intent of the statutory provision, there would, however, be no obligation to provide notice in the cease and desist letter with regard to these further forms of conduct which are reasonably foreseeable.

Furthermore, it should be noted that it is in principle the responsibility of the infringer, here the seller, to formulate an effective, appropriate cessation of conduct declaration. If the manufacturer – in a manner exceeding its obligations – submits a pre-formulated proposal, it appears inappropriate to impose on it the risk of overlooking a possible obligation to provide notice and, in the event of a missing notice, to conclude that the cease and desist letter is ineffective.

Furthermore, the statutory provision also does not give rise to an obligation of the manufacturer to indicatenot that the proposed cessation of conduct obligation goes beyond the alleged infringement of rights.

Conclusion

According to the statutory wording, a cease and desist letter is ineffective if it lacks a notice that the proposed cessation of conduct declaration goes beyond the alleged infringement of rights. For good reasons, however, a restrictive interpretation should be adopted here according to the purpose and intent of the statute, and it should not be unreasonably imposed on the person issuing the cease and desist letter to bear the risk of a missing notice.