Declarations to cease and desist put to the test

Note: This article has been machine translated and may therefore contain translation errors.

A contribution from

Nils Böhmer, LL.M.

ATTORNEY AT LAW

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The Düsseldorf Higher Regional Court recently ruled that a declaration to cease and desist pre-formulated by a law firm can be classified as a general terms and conditions (judgment of 23.11.2023, 2 U 99/22, GRUR-RS 2023, 35701 – Türschließscharnier). Injunction agreements that come about as a result of a cease-and-desist declaration may therefore be subject to stricter scrutiny than other freely negotiated agreements.

This could lead to difficulties, especially if the cease-and-desist declaration was issued “excluding the continuation of the infringement”. This “trick” is still often used today as a standard provision for pre-formulated cease-and-desist declarations. In the event of a breach of the cease-and-desist declaration, for example, it could lead to the creditor being able to claim a contractual penalty several times, although strictly speaking it is only a matter of one act of infringement. This is understandable from the creditor’s point of view, but inappropriate from the debtor’s point of view.

This was also the view of the Düsseldorf Higher Regional Court, which declared the entire contractual penalty clause invalid in the specific case. As a result, the judgment meant that the patent proprietor and injunction creditor could not claim any contractual penalty at all for repeated patent infringement.

Owners of infringed patents, trademarks and other intellectual property rights are advised to refrain from adding the phrase “excluding the continuation of the infringement” to warnings with an attached pre-formulated cease-and-desist declaration. Due to the drastic legal consequence of the nullity of cease and desist agreements already concluded, it may also be worth reviewing existing agreements and renegotiating them if necessary.

If you are interested, you can read a detailed discussion of the decision in the current issue 4 of GRUR-Prax (GRUR-Prax 2024, 120 [Böhmer]).

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