After winning the recent landmark “Morpheus” case at the German Federal Supreme Court, we have once again been successful before the highest German civil court.
In a judgment passed down on 28 February 2013 (Az. I ZR 237/11) the German Federal Supreme Court decided that receiving preventative declarations to cease and desist does not disrupt business operations. As a result, recipients of these declarations cannot claim for reimbursement of their legal costs for accepting them.
Individuals who receive warning letters for having allegedly infringed copyright through the use of file sharing websites are often required to submit a declaration to cease and desist. In anticipation, the law firms representing copyright holders will often send a pre-formulated declaration to cease and desist which is valid only for the corresponding copyright holder.
For years WILDE BEUGER SOLMECKE has been sending preventative declarations to cease and desist as part of its defence of clients who have received copyright infringement warning letters. These declarations are addressed not only to the copyright holder in question, but also to all other copyright holders represented by the opposing law firm.
This led the law firm Schutt & Waetke to claim from WIDLE BEUGER SOLMECKE clients nationwide for reimbursement of the legal costs created for having to accept such preventative declarations. The firm’s reasoning was that accepting unsolicited preventative declarations to cease and desist represented a nuisance similar to spam e-mails.
Schutt & Waetke alleged that the extra information contained in preventative declarations has to be processed and filed and that reimbursement of the resulting costs could be claimed. At the very least, the firm argued that preventative declarations to cease and desist represent an infringement of their rights to freely conduct business operations.
Claims for the reimbursement of 750 euros were brought in the county courts of Reinbeck, Hamburg, Düsseldorf, Cologne and Frankfurt am Main. Initially all the courts, except for Cologne which made an error of law and granted the claimants €37.20, denied Schutt & Waetke the reimbursement of their costs. They also lost their appeal to the district courts of Lübeck, Hamburg, Frankfurt am Main and Düsseldorf.
The Cologne Regional Court, however, granted reimbursement of the incurred costs at €335.90 plus interest. The court was of the view that preventative declarations to cease and desist do infringe on Schutt and Waetke’s clients’ rights to freely carry on business. To support its position to court relied on § 823 sub-paragraph 1 and § 249 German Civil Code. It went on to compare the practice of sending preventative declarations to cease and desist to that of sending advertisements by e-mail. The judges argued that preventative declarations to cease and desist require extensive administrative and legal processing which in turn drains resources for the law firm which is forced to accept them. In contrast to an individual who decides to seek legal advice after receiving an unjustified warning letter, a law firm which receives a preventative declaration to cease and desist is forced to expend financial and legal resources to decide whether to accept it. The court went even further, stating that in the case before it, the defendant had wilfully infringed on the rights of the claimant, as he had denied having conducted copyright infringements. In such a situation, the court concluded, there had been no need to submit a declaration to cease and desist.
An appeal against this decision was lodged and was wholly successful. At the hearing the Federal Supreme Court expressed doubt as to whether § 823 BGB could be used to support the argument that a preventative declaration to cease and desist infringes on a company’s right to freely carry on business. Also arguments of direct interference, as well as illegal behaviour were rejected. The Supreme Court’s stated that preventative declarations to cease and desist differ from e-mail advertisements. They contain contractual penalties and are therefore of a serious nature. The court also rejected various other arguments and declared that one individual cannot be held responsible for the sheer number of preventative declarations to cease and desist which are sent in file sharing cases.
The written judgment is expected to be published in a few months’ time.