Does a declaration of non-infringement given to third parties eliminate the risk of recurrence?

The Higher Regional Court (OLG) Stuttgart had to decide whether a declaration of non-infringement with a penalty clause given to a competitor would eliminate the risk of recurrence in relation to another competitor issuing a warning, with the result that this other competitor would not have to issue a further declaration of non-infringement and would not have to bear warning costs.

A drugstore chain advertised underarm pads, which are intended to prevent perspiration from becoming visible on the wearer, inter alia with the statements 100% cotton and ®, which stands for a registered trade mark. The competitor considered this advertising to be misleading and issued a costly warning to the drugstore chain. By way of justification, the competitor argued that the ® symbol could not be used due to the lack of a trade mark registration.

Furthermore, the disputed underarm pads were not made of 100% cotton. The drugstore chain did not issue a declaration of non-infringement on the grounds that it had already issued a declaration of non-infringement with a penalty clause to the Zentrale zur Bekämpfung unlauteren Wettbewerbs e.V. and that the competitor therefore had no entitlement to the issue of a further declaration.

Decision of the court
The OLG Stuttgart decidedJudgment of 20.5.2010 – Az. 2 U 95/09that a submission to third parties would only take effect as against a competitor issuing a further warning and eliminate the risk of recurrence if there were no doubts as to the seriousness of the submission and the enforcement intention of the recipient of the declaration of non-infringement at the time the declaration was issued.

However, such doubts would be likely if the recipient of the declaration of non-infringement had not issued a warning to the party bound by the declaration. Without a prior warning, it could not be seen that the recipient of the declaration of non-infringement with a penalty clause had a concrete interest in preventing the unfair competitive conduct and pursuing corresponding future infringements.

In terms of content, the court also upheld the claim regarding the material statement, as this statement was simply false and thus misleading. The use of the ® symbol had already been resolved due to a subsequent trade mark registration.

Conclusion

A submission to third parties does not have effect per se as against a third party. The issuance of the declaration must have been serious; the recipient of the declaration of non-infringement with a penalty clause must be willing to monitor and pursue corresponding future infringements. In case of doubt, this willingness can be evidenced by a prior warning.