Cease-and-Desist Declaration Subject to a Penalty.

A cease-and-desist declaration backed by a contractual penalty is typically submitted in response to an extrajudicial warning letter and serves to avert a claim for injunctive relief.

Indeed, where a claim for injunctive relief exists, it is generally not satisfied merely by refraining from a specific action, nor solely by a simple declaration that one will not commit such legal infringements in the future. Any potential claim for injunctive relief can only be satisfied through the submission of a formal cease-and-desist declaration. Only in this way is the risk of an initial infringement (where there are indications of an impending violation) or the risk of repetition (where a violation has already occurred) effectively eliminated; furthermore, if a risk of repetition exists, the cease-and-desist declaration must be backed by a contractual penalty.

A cease-and-desist declaration is considered "backed by a contractual penalty" if the declarant not only undertakes therein to refrain from specific conduct in the future but simultaneously commits to paying a specific monetary sum – a contractual penalty – in the event of a violation. A cease-and-desist declaration is legally effective only if it includes such a promise of a contractual penalty, as only then can it be presumed that te declarant is truly serious about their undertaking.

The submission of such a cease-and-desist declaration backed by a contractual penalty constitutes an offer to conclude a cease-and-desist agreement, which must be formally accepted by the recipient. Such a cease-and-desist agreement is subject to the statutory requirement of written form pursuant to Sections 780 and 126 of the German Civil Code (BGB); this means that the agreement may not be validly concluded merely through the transmission of the declaration via fax or email – rather, the transmission of the original document may be required.

If you have received a warning letter yourself, it is crucial to react quickly. Please send your warning letter to our firm via email, without obligation, and we will review whether the claims are justified and defend you against any unfounded demands. It is even possible that we are already familiar with your opponent.

We strongly advise against drafting a modified cease-and-desist declaration yourself, or using a template found on the internet. Doing so runs the risk of inadvertently admitting liability and, furthermore, committing yourself to obligations far beyond what is actually required. Please also bear in mind that a cease-and-desist declaration can constitute a binding contract; any subsequent violation could potentially cost you several thousand euros. Therefore, it is essential to carefully assess whether a cease-and-desist declaration needs to be submitted at all, and if so, in what specific form. Alternatively, in cases of doubt, the filing of a protective brief may be considered.

Attorney at law Andreas Erlenhardt, LL.M.

Bar-certified specialist attorney for intellectual property

We do business all over Germany. Our Düsseldorf office is located within the district of the Higher Regional Court (Oberlandesgericht) of Düsseldorf, to which the following communities belong: Hilden, Langenfeld, Meerbusch, Neuss, Krefeld, Kaarst, Ratingen, Mönchengladbach, Viersen, Kempen, Wuppertal, Erkrath, Haan, Remscheid, Mettmann, Solingen, Velbert, Oberhausen, Duisburg, Mülheim, Dinslaken and Kleve – we do not have offices in these cities but only in Düsseldorf. We have advised clients who are located in Berlin, Dortmund, Bremen, Köln, Dresden, Bochum, Bonn, Gelsenkirchen, Chemnitz, Kiel, Augsburg, Koblenz, Lübeck, Leverkusen, Oldenburg, Stuttgart, Osnabrück, Paderborn, Würzburg, Ulm, Offenbach, Bottrop, Hannover, Münster, Recklinghausen, Trier, Erlangen, Jena, Reutlingen, Nürnberg, Pforzheim, Göttingen, Heilbronn, Regensburg, Ingolstadt, Darmstadt, Heidelberg, Potsdam, Leipzig, Hamm, Kassel, Saarbrücken, Mainz, Freiburg, Aachen, Braunschweig, Wiesbaden, Karlsruhe, Mannheim, Bielefeld, Essen, Frankfurt and München.