In addition to other claims, including claims for injunctive relief, the Unfair Competition Act (UWG) also regulates an independent claim for damages for competitors (Section 9 sentence 1 UWG). According to this, it is necessary that the infringer intentionally or negligently carries out an unlawful commercial act. In contrast to the claim for injunctive relief under competition law, for example, fault is therefore required.
What damages can the entrepreneur claim under competition law?
Various cost items are recognized that the competitor concerned can claim. Is the competitor entitled to compensation for the loss of profit due to the unfair commercial act?
The costs of legal action also count as damage in this sense and are therefore also eligible for compensation. Important: Competition law provides a separate basis for claims for the reimbursement of costs incurred by the competitor for a justified warning (Section 12 UWG). The actual claim for damages therefore also covers additional costs of legal action – as long as they are still directly related to the unfair act of the competitor.
In addition, the costs required to investigate the facts of the case and the so-called market confusion damage can also be claimed as damages under competition law. The latter includes, for example, separately incurred advertising costs and costs for educating the public. This may be necessary if the impression made on the public by the competitor’s misleading advertising or a loss of reputation of the entrepreneur concerned has to be remedied.
A mandatory requirement for any form of compensation in competition law is causality between the unfair act and the damage incurred. It can be difficult to demonstrate this in individual cases, so that good documentation of your own business development is advantageous as soon as you become aware of the misleading act.
How are damages calculated under competition law?
In practice, discussions regularly arise regarding the specific calculation of the claim for damages. In principle, the entrepreneur concerned has three options for calculating his damages:
- Calculation of the concrete damage incurred by him incl. the loss of profit,
- Calculation of a reasonable (fictitious) license fee or
- Calculation and surrender of the profit made by the infringer.
The person concerned has the right to choose between the individual calculation methods, which they can exercise until the final decision (or fulfillment of the claim). This also includes the right to adjust the calculation method in the course of the proceedings. This makes sense, for example, if the damages are initially to be calculated in the form of the infringer’s profit (no. 3) based on the information provided by the competitor. If this calculation method does not lead to a reliable result, e.g. due to insufficient or incorrect information, the calculation of a reasonable license fee remains possible as an alternative (!) (No. 2).
Limitation period for claims for damages under competition law
As with other claims under competition law, the particularly short limitation period of six months applies from the date of knowledge of all facts giving rise to the claim, in particular the unfair act of the competitor. In order to meet this short deadline, you should assert your claims for damages under competition law at an early stage, at least on the merits. If an out-of-court solution cannot be found between the parties in a timely manner, the initially unquantified obligation to pay damages can also be established in court. This prevents a claim from lapsing solely due to the passage of time.
Damages also outside of competition law
Outside the scope of application of the special standards of competition law for asserting a claim for damages, the general regulations, e.g. of the German Civil Code (in particular Sections 823, 824, 826 BGB), apply. In some cases, these claims are in competition with each other, so that it must be determined in each individual case to what extent which regulation can be applied.