Is a cease and desist letter required before filing an action?

An applicant for a preliminary injunction must send a cease and desist letter to the respondent before filing the application if he wishes to recover the costs of the proceedings from the respondent in the event of his success, and if the competitor immediately recognises the order issued against him. The Higher Regional Court (OLG) Frankfurt a.M. had to decide whether exceptions to this rule could be made in certain cases.

In the context of a competition law dispute between two competitors, one competitor had obtained a preliminary injunction by court order, requiring him to refrain from making certain statements in the course of his internet presence. He did not issue a formal cease and desist letter against the competitor before filing the application for the preliminary injunction.

However, the application was preceded by email correspondence with the competitor, in which the latter made it relatively clear that he would not voluntarily refrain from the alleged infringements. For example, the competitor stated:

"You want (legal) war, so you shall have it!"

After the preliminary injunction was issued without an oral hearing, the competitor filed an objection solely against the cost order of the Regional Court (LG) Frankfurt a.M. against him, since no formal cease and desist letter from the competitor had been received before the application for the preliminary injunction was filed and he had issued an immediate acknowledgement.

Court's decision

ByBeschluss vom 10.07.2014 – Az. 6 W 51/14– the Higher Regional Court (OLG) Frankfurt a.M. held that grounds for filing an urgent application without a prior cease and desist letter exist as an exception when such a letter would appear futile from the outset, for example because the respondent – even without having received a formal cease and desist letter – has made it clear that he wants to have the matter resolved in court.

Such an exception was held to exist in this case, as the respondent's reaction makes clear that a formal cease and desist letter would be pointless and would not lead to an out-of-court submission to the competition law violation.

Conclusion

As a general rule, a formal cease and desist letter sent by a lawyer to a competitor for unfair conduct in business dealings is recommended. If the competitor rejects an out-of-court submission regarding the competition law violations, he cannot successfully object to the negative cost consequences following the issuance of a preliminary injunction. Only where the competitor's refusal is documented is a prior cease and desist letter dispensable.