Issue a warning
What is a warning letter?
A warning letter is an out-of-court letter in which an opponent is informed of the infringement and an injunction is demanded. At the same time, further claims are usually asserted, e.g. information about the exact scope of the infringement and an obligation to pay damages based on the information.
The cease and desist declaration with penalty clause
If an opponent has infringed their own rights, a so-called risk of repetition is usually established. As long as the risk of repetition exists, your own injunctive relief claims also exist. In practice, the risk of repetition is eliminated by either issuing a judgment against the opponent or the opponent submitting a cease-and-desist declaration with a penalty clause out of court. In such a cease-and-desist declaration, the opponent undertakes to refrain from the infringing behavior in the future and to pay a contractual penalty in the event of infringement.
The cease-and-desist declaration is submitted by the opponent. However, the party issuing the warning letter often formulates a cease-and-desist declaration for the opposing party, which the latter only needs to sign(pre-formulated cease-and-desist declaration).
If there is no infringement by the opponent yet, but such an infringement is only to be feared in the near future, there is no risk of repetition (because an infringement has not yet occurred). However, there may still be a claim for injunctive relief due to a so-called risk of first infringement. Unlike in the situation of a risk of repetition described above, however, the risk of first infringement can be ended by an actus contrarius, i.e. abandoning the intention. The submission of a cease-and-desist declaration cannot then be demanded.
In certain constellations, primarily in the area of the right to make statements, the opponent is only liable from the point in time at which the opponent becomes aware of a legal infringement (i.e. becomes liable in "bad faith"). This may be the case, for example, if the opponent operates an internet portal on which a third party has posted an unlawful statement. In this case, the provider of the internet portal must first be informed of the infringement and a deadline must be set for rectification before a warning letter with a cease-and-desist declaration subject to penalty can be demanded.
Form of the warning letter
In general, there are no significant formal requirements for the warning letter. Essentially, the accusation must be formulated and a cease-and-desist declaration must be requested. However, some sector-specific laws impose requirements for effectiveness. If a warning letter in the area of copyright law, for example, does not meet the legal requirements, it is ineffective and the party issuing the warning letter must reimburse the costs of the legal defense (in particular the lawyer's fees).
Risks of the warning letter
Sometimes it is not entirely clear whether the opponent has actually committed the alleged infringement. Example: A warning letter is issued because the opponent is using a trademark for its goods in the course of trade that is very similar to your own figurative mark. Whether the third-party trademark actually infringes your own figurative trademark is ultimately decided by a court, possibly in several instances. There are numerous criteria for assessing a trademark infringement, on the basis of which the infringement is to be assessed. Nevertheless, there is a risk that a court will ultimately not follow your own opinion and recognize a certain similarity between the third-party trademark and your own figurative trademark, but no likelihood of confusion leading to an infringement.
If it turns out that your own warning was ultimately unjustified, the question arises as to whether the costs of legal defense (e.g. the costs of hiring your own lawyer) are to be reimbursed to the person receiving the warning. Whether such a reimbursement of costs is owed with regard to the warning essentially depends on the subject matter of the warning. If the subject matter of the warning is an intellectual property right (e.g. a trademark, copyright, design or patent), a claim for reimbursement of costs is possible according to case law, whereby a certain degree of fault is required. Liability then arises due to a so-called unjustified property right warning.
However, if the ultimately unjustified warning relates to other areas, e.g. general competition law, case law generally rejects the warning party's obligation to reimburse costs.
Before issuing a warning letter, it is therefore advisable to clarify the facts of the case as precisely as possible and to examine the legal situation as carefully as possible in order to avoid the risks associated with issuing a warning letter.
Steps after the warning letter
If the opponent issues a cease-and-desist declaration with a penalty clause, this should be checked to see whether all infringements of the law are sufficiently covered and whether it contains an effective contractual penalty clause. If this is the case, the matter is closed with regard to the injunction. Furthermore, it must be ensured that the opponent provides sufficient information and - if desired - pays damages.
If the opponent refuses to issue a cease-and-desist declaration, legal steps must be considered, including an application for an interim injunction (i.e. the initiation of summary proceedings). Such an application can only be made within a very short period of time after becoming aware of the facts of the case, which means that it is often necessary to act very quickly. As it often takes some time after the first knowledge is obtained before a warning is issued, there are sometimes only a few days left to file an application for an interim injunction. The exact deadline depends on the individual case and the respective court. As a rule, a period of one month from receipt of knowledge should not be exceeded. It should be noted that it is the knowledge of the facts (not the legal situation) that is important and the knowledge of a clerk in the company is sufficient. The next steps should therefore already be considered when setting the deadline in the warning letter.