a) Abusive conduct in connection with a warning may constitute good cause for the termination of a cease-and-desist agreement based on the warning.

b) In the case of a cease and desist agreement concluded on the basis of an abusive warning, the assertion of contractual penalties for breaches committed by the debtor prior to the termination of the agreement is precluded by the objection of abuse of rights pursuant to Section 242 BGB.

Tenor

The appeal against the judgment of the 5th Civil Senate of the Court of Appeal of December 9, 2016 is dismissed at the plaintiff’s expense.

By right.

Facts of the case

The plaintiff sold headphones and earphones via eBay and an online store. In spring 2014, he issued a warning to the defendant, which in turn sells headphones and earphones via an online store and chain stores, for violations of the Electrical and Electronic Equipment Act of March 16, 2005 (ElektroG aF) in force at the time and of the provisions of Section 3 para. 2 sentence 1 no. 4 of the Electrical and Electronic Equipment Substances Ordinance of April 13, 2013 (ElektroStoffV aF), which regulated the obligation to affix the CE marking. On 14 May 2014, the plaintiff submitted a cease-and-desist declaration with penalty clause to the defendant, which the latter accepted on 2 June 2014.

On June 18 and 20, 2014, the plaintiff purchased seven headphones and earphones from the defendant. In a letter from his legal representatives dated August 4, 2014, he sent the defendant a warning letter for violations of the cease and desist agreement dated May 14/June 2, 2014 (hereinafter: cease and desist agreement) and for violations of competition law. On November 21, 2014 and May 16, 2015, the plaintiff conducted further test purchases from the defendant.

With his action, the plaintiff finally asserted contractual claims for injunctive relief from the commercial acts specified in the cease-and-desist agreement and for payment of contractual penalties. He based his claim for payment primarily on the seven violations of the cease-and-desist agreement that he identified during the test purchases on June 18 and 20, 2014 and, alternatively, on the violations identified during the test purchases that were carried out later. He demanded a contractual penalty of € 5,100 for each headphone or earphone that was not properly labeled.

Prior to the hearing scheduled for December 9, 2015 before the Regional Court, the defendant extraordinarily terminated the cease-and-desist agreement in a letter dated December 1, 2015 on the grounds that the plaintiff’s actions were an abuse of law.

The Regional Court dismissed the action and, on the defendant’s counterclaim, ordered the plaintiff to reimburse the expenses incurred by the defendant for the legal defense to defend against the warning. The plaintiff’s appeal against this was unsuccessful (KG, GRUR-RR 2017, 114 = WRP 2017, 462).

With his appeal, which was allowed by the Court of Appeal with regard to the payment claim and otherwise by the Senate, the plaintiff continues to pursue his claims on appeal. The defendant requests that the appeal be dismissed.

Reasons

I. Like the Regional Court before it, the Court of Appeal considered the claim to be unfounded and the counterclaim to be well-founded. It stated that:

The plaintiff is not entitled to any claims under the cease and desist agreement. The defendant had effectively terminated this agreement because its conclusion was based on abusive conduct by the plaintiff. Irrespective of this, the objection of abuse of rights also stands in the way of the payment claim because this claim had already arisen before the extraordinary termination. The Regional Court was therefore right to uphold the counterclaim.

II. The plaintiff’s appeal against this assessment is unfounded. The Court of Appeal did not err in law in considering the plaintiff’s applications for injunctive relief to be unfounded (see II 1). It also denied the claim for contractual penalties asserted by the plaintiff without error of law (see II 2) and granted the counterclaim (see II 3).

(1) The Court of Appeal assumed that the defendant was entitled pursuant to Section 314 para. 1 BGB, the defendant was entitled to extraordinary termination of the cease-and-desist agreement because the plaintiff had acted abusively in the warning that preceded the cease-and-desist agreement within the meaning of Section 8 para. 4 UWG. This assessment stands up to legal scrutiny.

a) Continuing obligations – and this also includes agreements to cease and desist – can be terminated by either party for good cause without notice in accordance with Section 314 para. 1 sentence 1 BGB, either party may terminate the contract for good cause without observing a notice period. Pursuant to Section 314 Para. 1 sentence 2 BGB, good cause exists if the terminating party cannot reasonably be expected to continue the contractual relationship until the agreed termination or until the expiry of a notice period, taking into account all the circumstances of the individual case and weighing up the interests of both parties.

b) The Court of Appeal correctly assumed that abusive conduct in the case of a warning can constitute good cause for the termination of a cease-and-desist agreement based on the warning.

aa) The appeal asserts without success that a legally abusive approach to the warning within the meaning of Section 8 para. 4 UWG cannot justify a right to extraordinary termination of the cease-and-desist agreement. The right to such a termination is to be limited to cases in which the statutory injunctive relief on which the agreed prohibition is based is now clearly to be assessed as lawful due to a change in the law or a leading decision by the highest court and a corresponding injunctive relief can therefore be eliminated with an action to defend against enforcement.

In the “fishtailparka” decision (judgment of April 8, 2014 – I ZR 210/12, GRUR 2014, 797 = WRP 2014, 948) cited by the appeal in support of its position, the Senate stated that the elimination of the statutory injunctive relief on which the contractually agreed prohibition is based constitutes good cause that justifies the termination of the injunction agreement due to the unreasonableness of the continuation of the contract. The fact that the conduct prohibited to the debtor on the basis of a claim for injunctive relief under competition law is now clearly to be considered lawful due to a leading decision by the highest court is equivalent to a change in the law (BGH, GRUR 2014, 797 marginal no. 24 – fishtailparka, with further references).

It cannot be inferred from these statements that the mere lapse of the statutory injunctive relief on which the contractually agreed prohibition is based constitutes good cause for the termination of an injunction agreement due to the unreasonableness of the continuation of the contract. Rather, an agreement to cease and desist can be terminated pursuant to Section 314 para. 1 BGB can also be terminated for other reasons without observing a notice period if the terminating party cannot reasonably be expected to continue the contractual relationship, taking into account all the circumstances of the individual case and weighing up the interests of both parties. Under these conditions, the fact that a subordination agreement is based on an abusive warning can also constitute good cause for extraordinary termination.

bb) The appeal further asserts without success that the Court of Appeal was wrong to assume that the extraordinary termination of an agreement to cease and desist is already effective if the conclusion of the agreement was based on abusive conduct on the part of the injunction creditor within the meaning of Section 8 (4) UWG. 4 UWG. Rather, further circumstances, in particular those that make the non-existence of the claim clearly recognizable for third parties, must be added.

In the decision “Missbräuchliche Vertragsstrafe” (judgment of May 31, 2012 – I ZR 45/11, GRUR 2012, 949 = WRP 2012, 1086) referred to by the appeal in support of its position, the Senate stated that Section 8 para. 4 UWG is not applicable to contractual claims. The question of whether the assertion of a contractual penalty based on a competitor’s cease-and-desist declaration is an abuse of rights must therefore be assessed in accordance with the general principles of good faith pursuant to Section 242 BGB; in doing so, the circumstances that constitute an abuse of rights in the context of Section 8 (4) UWG can be taken into account. 4 UWG (Federal Court of Justice, GRUR 2012, 949 para. 22 and 29).

It cannot be inferred from these statements that the circumstances that constitute an abuse of rights within the meaning of Section 8 para. 4 UWG cannot in themselves be sufficient to consider the assertion of a contractual penalty on the basis of a competitor’s declaration to cease and desist as an abuse of rights pursuant to Section 242 BGB. Nor does this mean that such circumstances in themselves cannot constitute good cause for termination pursuant to Section 314 para. 1 BGB.

c) The Court of Appeal assumed that the plaintiff had acted abusively within the meaning of Section 8 para. 4 UWG and also clearly assumed that the defendant could therefore not reasonably be expected to adhere to the injunction agreement. The complaints of the appeal directed against this assessment are unsuccessful.

aa) The Court of Appeal assumed that abusive conduct within the meaning of Section 8 para. 4 UWG if the dominant motive of the creditor in asserting the claim for injunctive relief were extraneous objectives such as the interest in obtaining fees or burdening the opponent with the highest possible legal costs or generally harming him. An indication of abusive prosecution could arise, among other things, from the fact that the warning activity is not in any reasonable economic relationship to the commercial activity of the person issuing the warning. This assumption does not reveal any legal error.

Abuse within the meaning of Section 8 para. 4 sentence 1 UWG is to be assumed if the dominant motive of the creditor in asserting the claim for injunctive relief are extraneous interests and objectives that are not worthy of protection in themselves. However, these do not have to be the sole motive of the creditor; rather, it is sufficient that the extraneous objectives predominate. The assumption of such an abuse requires a careful examination and consideration of the relevant individual circumstances. An indication of abusive prosecution may arise from the fact that the warning activity bears no reasonable economic relationship to the commercial activity of the party issuing the warning, the claimant aims to burden the opponent with the highest possible legal costs or the party issuing the warning systematically demands excessive warning fees or contractual penalties. It is also an indication of an abusive approach if the party issuing the warning letter cannot have any significant economic interest in pursuing the infringement of competition law complained of, but instead, from the perspective of an economically minded trader, his legal action serves solely the irrelevant interest of burdening competitors with the highest possible costs. This is the case, for example, if the plaintiff’s attorney conducts the cease-and-desist letter business “on his own initiative” solely to generate fee income from the prosecution of competition law infringements (see BGH, judgment of April 26, 2018 – I ZR 248/16, GRUR 2019, 199 para. 20 and 21 = WRP 2019, 180 – Abmahnaktion II).

bb) The Court of Appeal further assumed that, according to these standards, the plaintiff had acted abusively in warning the defendant within the meaning of Section 8 para. 4 UWG. The appeal unsuccessfully challenges the findings of the Court of Appeal on which this assessment is based.

(1) The appeal complains that the statements of the court of appeal regarding the financial situation of the plaintiff violated his right to a fair hearing, were also contrary to the law and also lacked the required overall assessment of the circumstances presented. According to the findings made, it can be assumed that the plaintiff was able to double his profit from 2013 to 2014 to € 80,000 after initial difficulties in 2012. The subsequent failure of his company, which was due to a campaign by competitors against whom he had filed claims for competition infringements, did not allow any conclusions to be drawn about the time of the defendant’s warning, at which time it could be assumed that the company was growing strongly with considerable five-figure profits and was able to conduct the lawsuits it was pursuing economically. In part, the Court of Appeal had not sufficiently taken into account that only the time of the warning was decisive for the assessment of the plaintiff’s economic circumstances. Its comments on the acquisition of a half co-ownership share in a property in Berlin also indicated that it had not taken into account the plaintiff’s submission, which had been provided as evidence, that the fact that the co-acquirer of the property had been unable to provide either equity or collateral suggested that the bank financing the acquisition had classified the plaintiff as very creditworthy at the time. The appeal is therefore unsuccessful.

The appellant’s objection to the appeal rightly contests the findings of the Court of Appeal, according to which the profit expected by the plaintiff in 2014 was offset by outstanding fee claims of his legal representatives in the amount of around € 65,000 and the plaintiff acknowledged debts of around € 50,000 plus interest to his partner and the mother of his daughter in 2012 and, according to his submission in the statement of 8 December 2015, a further six-figure compensation amount to his legal representatives. The appellant’s objection also rightly points out that the court of appeal was unable to identify any significant assets due to the plaintiff’s unsubstantiated submission in this respect. For example, the plaintiff’s half co-ownership share in a property in Berlin, the value of which the plaintiff stated at around € 190,000 to € 200,000, was not valuable in view of the first-ranking land charge of € 177,500 registered on the property for a bank and a further land charge of € 100,000 registered in favor of the plaintiff’s legal representatives. The appellant’s objection also correctly points out that, contrary to the appeal’s assertion, the Court of Appeal did take the time of the warning into account when determining the abuse of rights. According to the findings of the Court of Appeal, the plaintiff was already in difficult financial circumstances long before the warning in question. In particular, the file numbers of the court proceedings brought by him show that he had already engaged in disproportionate warning activities from the point of view of the litigation risk either before or at least at the time of the warning in question.

(2) The appeal also challenges the Court of Appeal’s assessment that in the case in dispute, collusion between the plaintiff and his legal representatives was to be assumed because they had exempted him from the cost risk incurred in conducting the proceedings or had shaped the plaintiff’s financial circumstances in such a way that his creditors had no prospect of realizing their claims either now or in the future. The fact that the risk of success or failure of the extrajudicial and judicial action of the over-indebted claimant is fully borne by the claimant is an additional important aspect that justifies the accusation of abuse. The appeal against this assessment is also unsuccessful.

The appellant’s objection rightly points out that the Court of Appeal did not make any conclusive findings in this respect, but merely stated that, in view of all the circumstances, there was a presumption of collusion between the plaintiff and the lawyers he had instructed, in which the plaintiff had given himself up to provide the lawyers with a source of fee income. The appeal response also correctly points out that an objective disproportion between the scope of the prosecution activity and the scope of the business activities can justify the accusation of abuse of rights even in the absence of collusion with the lawyer. According to § 8 para. 4 UWG, it depends on the circumstances of the individual case. Abusive conduct can therefore also arise from other circumstances, irrespective of collusion with a lawyer. This is the case, for example, if the warning and litigation activity – as in the case in dispute – can be explained in view of the economic situation of the person issuing the warning solely with the motive of obtaining claims for reimbursement of expenses or legal costs as well as from contractual penalty promises.

(3) The appeal also challenges the Court of Appeal’s assumption that the plaintiff had obviously already been confronted with the objection of abuse of rights several times in court proceedings in spring 2014. The Court of Appeal referred solely to proceedings before the Higher Regional Court of Celle, in which the plaintiff felt compelled to withdraw his application at the hearing with regard to an abuse of rights affirmed by the lower court. The Court of Appeal did not take into account the plaintiff’s written submission that the Higher Regional Court of Celle had stated in the summons to the oral hearing that it appeared doubtful whether the abuse affirmed by the lower court within the meaning of Section 8 para. 4 UWG was present. The plaintiff also referred to judgments of the Higher Regional Courts of Frankfurt am Main and Karlsruhe, according to which he was wrongly accused of abusive prosecution of claims. This argument does not help the appeal to succeed either.

The appeal on points of law rightly points out that it is not decisive for the assessment of the dispute for what reasons the plaintiff withdrew his application in the proceedings before the Higher Regional Court of Celle. Rather, the decisive factor here is that the plaintiff had indisputably been confronted many times with the objection of abusive prosecution even before the defendant’s warning in respect of the competition infringements asserted by him against competitors. Insofar as the appeal refers to judgments of the Higher Regional Courts of Frankfurt am Main and Karlsruhe, in which abusive conduct by the plaintiff was denied in each case, it must be taken into account that the decision on the question of whether abuse within the meaning of Section 8 para. 4 UWG requires an assessment of the specific circumstances of the individual case to be made by the trial judge on the basis of the submissions of both parties.

(4) Finally, the appeal complains that, contrary to the opinion of the Court of Appeal, the plaintiff was not obliged to further demonstrate its economic interest in pursuing the infringements of the labeling obligations asserted by it. The provision of § 7 sentence 1 ElektroG aF, on which the plaintiff based its action against the infringements committed by the competitors, was a market conduct regulation in the interest of the competitors, who were to be protected from being burdened with higher disposal costs due to unlabeled electrical appliances of other market participants. The appeal was also unsuccessful in this respect.

However, the Court of Appeal did not take into account in its statements challenged in the appeal that the provision of Section 7 sentence 1 ElektroG aF constituted a market conduct regulation for the protection of competitors within the meaning of Section 4 no. 11 UWG aF, as it was intended to protect them from being charged higher disposal costs as a result of unlabeled electrical appliances by other market participants (BGH, judgment of June 9, 2015 – I ZR 224/13, GRUR 2015, 1021 para. 16 = WRP 2015, 1214 – Headphone labeling, mwN). However, according to the findings made by the Court of Appeal in the contested judgment and not challenged by the appeal, the plaintiff did not demonstrate its economic interest in pursuing the infringements of labeling obligations asserted by it despite the corresponding request in the order of the Chairman of the Appeal Senate dated June 10, 2016. June 10, 2016, not justified with this aspect.

d) The Court of Appeal did not err in law in assuming that the defendant had declared the extraordinary termination of the subordination agreement in good time, as the essential information about the plaintiff’s financial circumstances, which was the main basis for the allegation of abuse of rights, came from the list of assets submitted by the plaintiff on October 8, 2015. According to Section 314 para. 3 BGB, the entitled party can only terminate the contract within a reasonable period of time after becoming aware of the reason for termination. The Court of Appeal’s assumption that this period was less than two months between the submission of the statement of assets on October 8, 2015 and the receipt of the notice of termination dated December 1, 2015 to the plaintiff on December 2, 2015, is not objected to by the appeal and does not reveal any legal error.

2 The Court of Appeal assumed that the plaintiff was not entitled to payment of contractual penalties totaling € 35,700 from the defendant regardless of whether the defendant had breached its cease-and-desist obligations under the cease-and-desist agreement before its declaration of termination took effect. This assessment also stands up to legal scrutiny.

a) The question of whether a cease and desist agreement concluded on the basis of an abusive warning can not only be terminated for good cause pursuant to Section 314 BGB, but whether the assertion of contractual penalties for breaches of the cease and desist obligations committed by the debtor before the termination takes effect is also precluded by the objection of abuse of rights pursuant to Section 242 BGB, is controversial. The Federal Court of Justice has not yet had to rule on this (see BGH, judgment of December 15, 2011 – I ZR 174/10, GRUR 2012, 730 marginal no. 38 = WRP 2012, 930 – Bauheizgerät; GRUR 2012, 949 marginal no. 22 – Missbräuchliche Vertragsstrafe).

b) The Court of Appeal rightly answered this question in the affirmative. It assumed that the assertion of contractual penalties for breaches of a cease-and-desist agreement concluded on the basis of an abusive warning could be precluded by the objection of abuse of rights even before its termination. Behavior that could prevent the judicial enforcement of claims for injunctive relief and removal under competition law pursuant to Section 8 para. 4 UWG would only exclude claims for contractual penalties if they were the cause of the submission of the declaration of submission or were in any case related to it; however, this is the case with external circumstances that justify the accusation of abuse of rights. Insofar as the application of Section 242 BGB in corresponding cases is made dependent on the fact that the non-existence of the claim was clearly recognizable, this does not stand in the way in the case in dispute, because the large number and density of the indications in favour of an abuse of rights in this case clearly showed that the plaintiff’s warning was not justified.

c) In contrast, the appeal refers to the Senate decisions “Altunterwerfung I” (judgment of September 26, 1996 – I ZR 265/95, BGHZ 133, 316) and “Altunterwerfung IV” (judgment of July 6, 2000 – I ZR 243/97, GRUR 2001, 85 = WRP 2000, 1404). According to these decisions, the termination merely leads to the termination of the obligation for the future; payment claims that have already arisen therefore remain unaffected.

d) The appeal does not take into account that, in the case of claims for contractual penalties arising from a cease-and-desist agreement, it must be examined as part of an overall assessment whether the conduct of the party issuing the warning before, during and after the warning justifies the conclusion that its assertion is contrary to good faith. In the case in dispute, according to the findings made by the Court of Appeal, the plaintiff pursued his extensive warning activity solely for the purpose of generating promises of contractual penalties, among other things, and in view of his desolate financial circumstances in the knowledge that the warned parties would not be able to realize any claims for reimbursement of costs against him even if he won the case. The fact that the plaintiff here invokes a formal legal position that he obtained through his unlawful conduct also speaks in favor of an impermissible exercise of rights in the case in dispute (see BGH, judgment of October 6, 1971 – VIII ZR 165/. October 1971 – VIII ZR 165/69, BGHZ 57, 108, 111 [juris para. 9]; decision of March 20, 2013 – XII ZB 81/11, NJW 2013, 1676 para. 18; decision of February 27, 2018 – VI ZR 109/17, NJW 2018, 1756 para. 20; Palandt/Grüneberg, BGB, 78th ed, § Section 242 para. 43).

e) The Court of Appeal’s assessment that the view sometimes expressed in the literature that the party receiving the warning could submit to the warning for the sake of appearance and thus exclude the risk of repetition and the claim for injunctive relief in order to then raise the objection of abuse in the event of a renewed infringement (cf. Staudinger/Rieble, BGB [2015], Section 339 para. 49) would appear to be unrealistic. According to life experience, a person being warned who knows the circumstances justifying the abuse will not submit a declaration of submission, but will immediately raise the objection of abuse. The warning party will therefore do its best to conceal the circumstances that could constitute an abuse of rights from the warned party. The fact that an objectively clear abuse of rights was not initially recognizable to the warned party cannot justify denying the warned party the right to invoke abuse of rights in this case, unlike in a case in which the abuse of rights was recognizable to the warned party from the outset, especially since the warned party is by no means less worthy of protection in the first case than in the second case.

3. according to the explanations in B I above, the court of appeal rightly dismissed the counterclaim brought by the defendant as being based on section 8 para. 4 sentence 2 UWG and with regard to interest from §§ 291, 288 para. 1 sentence 2 BGB.

III. The decision on costs is based on section 97 para. 1 ZPO.