Disputes in various areas of law, including competition law, trademark law and copyright law, are often accompanied by the submission of a cease-and-desist declaration with a penalty clause. The (usually) warned party submits this to prepare for the risk of repetition with regard to a specific infringement. Upon submission (and regularly also acceptance by the warning party), a contract is concluded, the violation of which can be punished with severe contractual penalties.
Preventing the threat of contractual penalties
In view of the duration of the commitment to such a cease-and-desist undertaking, there is regularly a desire to terminate a cease-and-desist declaration once it has been issued in order to no longer be bound by the prohibitions contained therein and to be exposed to the risk of contractual penalties. However, the termination of a cease-and-desist declaration is subject to strict conditions, which should be clarified in advance.
Termination of the cease-and-desist declaration due to a change in the law or case law
In principle, a declaration to cease and desist, like any other contract, can be terminated for good cause (Section 314 BGB). Such good cause is, for example, a change in the law or a change in supreme court case law, according to which a previously prohibited behavior is clearly declared permissible (see BGH, judgment of 08.05.2014, ref. I ZR 210/12 – fishtailparka). In such a case, however, the demand for a contractual penalty can be an abuse of rights even without termination in individual cases (BGH, judgment of 31.05.2012, ref. I ZR 45/11 – Abusive contractual penalty).
The legal opinion expressed by the German Patent and Trademark Office in the cancellation proceedings, for example, is not such an important reason. However, the discount bans abolished by corresponding amendments to the law or the question of the existing right of withdrawal for mattresses, which has now been clarified by the highest court, will be regarded as important grounds.
Termination of the cease-and-desist declaration due to abusive warning letter
A cease-and-desist declaration can also be terminated if the warning was already based on abusive conduct (BGH, judgment of 14.02.2019, ref.: I ZR 6/17):
“Rather, a subordination agreement can also be terminated for other reasons in accordance with Section 314 (1) BGB 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.”
Observe notice periods
The termination of contracts for good cause is generally subject to a timely declaration. The key point in time for this is when knowledge of the reason for termination is obtained. According to § 314 Abs. 3 BGB, the entitled party can only terminate the contract within a reasonable period of time after becoming aware of the reason for termination. A period of just under two months between knowledge and the declaration of termination was not objected to by the highest court (BGH, judgment of 14.02.2019, ref.: I ZR 6/17).
Have the cease-and-desist declaration checked
In individual cases, there may be other aspects that speak for or against a possible termination of a cease-and-desist declaration. If, for example, a right of termination has already been effectively agreed in the declaration, it may still be possible to terminate it afterwards. However, the specific wording of the declaration will play a decisive role here. Only after such an examination should the termination of the cease-and-desist declaration be considered at all.