In a recent decision, the Federal Court of Justice once again clarified the scope of any injunctive relief under competition law. In the case of anti-competitive advertising, it is often not only necessary to simply cease and desist, but also to recall goods that have already been sold. Even if the advertiser has no legally enforceable claims for return against its customers, it must always make an effort to recall the goods (BGH, judgment of May 4, 2017, ref.: I ZR 208/15).
Warning letter after anti-competitive advertising
A manufacturer and distributor of dehumidifiers did not agree with the advertising of its competitors. They advertised with the slogan: “40% more effectiveness”, which was simply not true. Due to the anti-competitive nature of the advertising, the advertising company issued a declaration to cease and desist with a penalty clause after receiving a warning. In this declaration, it undertook to no longer advertise with the offending statement.
He then taped over all the advertising on the packaging of the dehumidifiers in question and removed the corresponding advertising from his website. However, the dehumidifiers already sold and delivered to DIY stores were not labeled in the same way or taped over.
However, the competitor issuing the warning saw this as a breach of the cease-and-desist declaration and claimed payment of the agreed contractual penalty from the advertiser. After the latter refused to pay, the matter went to court, all the way to the BGH.
BGH: Advertiser violates cease-and-desist declaration – No recall undertaken
The BGH also saw the advertiser’s actions as a breach of the cease-and-desist declaration with penalty clause. In addition to refraining from further distribution, the advertiser should also have actively taken action against the sale of the products with the printed anti-competitive slogan by the DIY stores.
It is true that the DIY stores are not to be regarded as vicarious agents of the defendant within the meaning of Section 278 BGB and are therefore in principle not obliged to comply with the cease-and-desist declaration. Furthermore, the advertiser is not liable for the conduct of the DIY stores as such.
Injunctive relief also includes recall
However, the advertiser should have done everything reasonable to prevent the DIY stores from selling the products with the anti-competitive slogan. In the opinion of the BGH, this necessarily included a serious attempt to recall its goods. Even if a possible claim to recall the goods already sold is not expressly mentioned in the cease-and-desist declaration with penalty clause.
Serious efforts for recall are sufficient
The advertising company should therefore have at least made a serious attempt to influence the DIY stores whose actions benefit it economically. Especially if it had to seriously expect an infringement and there were also opportunities to influence the actions of the DIY stores.
The anti-competitive advertiser could therefore have recalled its products from the DIY stores. Alternatively, it could have instructed the DIY stores to paste over the anti-competitive slogans on the products. However, as the company did not consider any of these options, it was in breach of the declaration to cease and desist it had signed itself and had to pay the contractual penalty claimed.
Be careful when signing cease-and-desist declarations!
In order to avoid such mistakes, we advise you to take the greatest possible care when signing cease-and-desist declarations with a penalty clause. Pre-formulated declarations and warnings are often imprecise and go further than is actually necessary. An examination by a lawyer is therefore never a bad idea and provides you with legal certainty.