Cease and desist declaration: 8 facts you should know!

The cease-and-desist declaration is the linchpin of a warning. In it, the warning letter sets out certain requirements.

Even if it seems tempting for those who have been warned off to quickly settle the matter in this way:

By your signature, a cease and desist contract is concluded in which you acknowledge all claims.

For example, if necessary, they undertake to pay the specified contractual penalty - often amounting to several thousand euros.

Therefore, never sign without prior verification by a lawyer specialising in competition law!

In this article you will learn what is important.

Content

1. What is a cease and desist declaration?
2. Why should one never sign a cease and desist declaration without legal advice?
3. How can I help you as a specialist lawyer?
4. Why should I not use a template from the Internet?
5. The dunned party faces the risk of costs in case of improper changes
6. What are the consequences of a breath of the cease and desist agreement
Summary: 8 facts at a glance

1. What is a cease and desist declaration?

Warnings have long proved their worth for the extrajudicial settlement of competition disputes.

The "heart" of every warning notice is the pre-formulated cease and desist declaration attached by the warning officer.
If the dunned person signs it, he thereby gives a legally binding assurance that he will refrain from the contested act in future.

This results in a cease and desist agreement between the warned party and the warning officer - and it is quite a challenge.

2. Why should one never sign a cease and desist declaration without legal advice?

The first thing to know is: By signing the cease and desist declaration, a so-called cease and desist contract is concluded between the person being warned and the person being warned. This cease-and-desist agreement is valid for at least 30 years!

The person being warned should therefore be clear about what he is signing in terms of content and what exactly he is contractually committed to.
Now, making a declaration not to repeat the act complained of is not in itself detrimental. It has no further (negative) consequences for the person making the declaration. The warning officer therefore ensures that the person being warned must take the declaration seriously.

2.1 Penalty-based declaration of discontinuance has far-reaching consequences

In order for the person being warned to stick to his declaration, the person being warned must therefore "help" a little. For this purpose he designs his cease and desist declaration "punishable by law". What does this mean?

In the cease and desist declaration, the cautioner inserts a passage according to which the cautioned party undertakes to pay a contractual penalty in the event of repeated infringement. Warners are not squeamish about the amount, they often demand a contractual penalty of 5001 Euros - even from private individuals.

2.2 Injunctions are usually too broad

Remember: The (alleged) rights holder naturally formulates the injunction in his own favour!
The demands in the declaration are therefore often written much too broadly or too generally - the person being warned should be prepared to do much more than he actually has to.

However, a person who has been warned is not forced to accept the declaration without objection. As a specialist lawyer for industrial property rights I will help you to limit your obligations to an adequate level.

3. How can I help you as your specialist lawyer?

Have a specialist lawyer for industrial property rights assess the cease and desist declaration before you sign it. There are many crucial points that can be influenced to make it appropriate.

The most important thing is of course the legal assessment. I therefore first check whether the accusation is justified at all!

Modified cease and desist declaration preserves your rights
If the accusation cannot be dismissed, I adapt the statement in the sense of the person who has been warned, I modify it. Hence the term modified cease and desist declaration. It is intended to interfere as little as possible with the rights of the defendant.

Among others, the following changes may be necessary:

•  Downward adjustment of the amount of the contractual penalty
• Limitation of the contractual penalty to culpable conduct
• Cancellation of the warning costs
• Waiver of compensation
• Downward revision of the claim for damages
• Limitation of the scope of the right of injunction to a specific work
• Limitation of the scope of the right to an injunction to a specific act
• Formation of a legally permitted suspensive condition
• Agreement of the so-called new Hamburg custom for the contractual penalty (the amount of which is first placed in the so-called equitable discretion of the party issuing the warning. The person being warned is given the opportunity to have the amount reviewed by a court if necessary)

For the person who wishes to make a cease and desist declaration, I am considering the opposite options, such as

• Extension of the scope of the right of injunction, e.g. to all protected works
• upward adjustment of the amount of the contractual penalty

4. Why should I not use a template from the Internet?

As you can see, there are very many starting points for improving a cease and desist declaration in his favour.

A pre-formulated pattern cannot do justice to this, because every case - your case - is different from all others. The explanation must therefore urgently be adapted individually.

One might think so, given the amount of the contractual penalty. However, other contents are clearly of a legal nature and require legal assessment, for example, when it comes to the scope of the injunction.

5. the dunned party is exposed to a cost risk in case of improper changes

Please note: If you go too far with your changes or use a pre-formulated pattern that does not "fit" the content of your warning, you expose yourself to a considerable cost risk:

The warden does not have to accept your change. Instead, he can apply for an injunction in court. The court costs incurred as a result must then be borne by the person being warned in addition to the warning costs.

6. what are the consequences of a breach of the cease-and-desist agreement?

If the person being warned repeats the conduct complained about, the contractual penalty shall be due.

In addition, he must expect a further warning, which of course includes a new cease-and-desist declaration.

By this renewed violation, the warned person has made it clear that the previous contractual penalty did not deter him. In order to finally take the wind out of his sails, the cautioned person usually increases the contractual penalty significantly at the second caution.

Summary: 8 facts at a glance

1. Do not accept a (punishable) declaration of discontinuance without legal examination
2. The cease and desist agreement resulting from the acceptance of the declaration is valid for at least 30 years!
3. Contractual penalty claims of 5001€ are not unusual
4. A cease-and-desist declaration is usually too broadly formulated
5. It can be adapted in the sense of the dunned (so-called modified declaration of discontinuance)
6. Do not use internet templates for a modified cease and desist declaration! These do not meet the legal requirements of the respective individual case.
7. Only the declaration modified by a lawyer sufficiently safeguards the rights of the person against whom the order has been issued.
8. The cease and desist declaration can be modified in many respects, e.g:

• Downward adjustment of the amount of the contractual penalty
• Limitation of the contractual penalty to culpable conduct
• Limitation of the scope of the right of injunction to a specific work.

Picture Source: Picture 1: Dan Race, Picture 2: andyller – fotolia.com