Trade Fair Injunctions In Germany: Interim Weapon Against Product Plagiarism
The opening of the 2007 International Motor Show in Frankfurt, Germany was clouded by intense discussions on product plagiarism. Before the fair, a Chinese car manufacturer had announced that it would display two models that show striking similarities to BMW's X5 and DaimlerChrysler's Smart cars. They only refrained from exhibiting after the threat of legal action by the German car manufacturers and massive public pressure.
Plagiarism is increasingly a problem faced by manufacturers of high quality goods who normally protect their products by means of registered design and trade marks. For the avoidance of further damage to the brand, it is advisable for the right owners to stop their competitors' activities as quickly as possible. Under German law, interim injunctions are a very effective tool for dealing with the problem.
Obtaining Interim Relief: Pre-requisites and Practical Implications
If a company notices that a competitor is offering infringing products during a fair (i.e., by offering product clones or look-alikes), the company may file a motion seeking an interim injunction with the competent District Court. The most remarkable advantage of interim relief under German law is that injunctions are often granted ex parte, sometimes within hours if necessary. Once served, the interim injunction is immediately enforceable.
A motion for interim relief is generally directed to prevent the infringer from offering and distributing the infringing products. Beyond that, motions for interim relief during a trade fair should also direct seizure by a bailiff of the infringing goods and any catalogues showing the infringing products. This is advisable in order to stop further infringements immediately. Otherwise, the infringer might continue to offer the infringing products in breach of the interim injunction. Although the court may impose an administrative fine upon the defendant or even imprison defendant's managing directors for up to six months in the event of a violation of the interim injunction, such measures imposed against a foreign infringer could be too late due to the short duration of trade fairs.
The first pre-requisite for obtaining interim relief is that a motion must be filed quickly. Practice varies from court to court, but, in general, motions have to be made with the competent District Court within one month after the applicant acquires knowledge of the infringement. This must be taken into account if the applicant already has knowledge of the infringing product before the fair starts.
Second, all facts proving the infringement of the IP rights must be presented immediately to the Court with suitable means of proof. That means that the motion for injunctive relief must be accompanied by printouts of IP databases proving that the relevant IP rights are held, a license declaration (if needed), affidavits witnessing the infringing products, pictures of the infringing product taken during the fair, a catalogue showing the infringing products, own product samples, etc.
Once granted, the interim injunction has to be served within one month to become effective. For service, the applicant instructs a bailiff, who will also seize the infringing products. Irrespective of the importance of seizing the infringing products, in certain cases it is crucial to serve the interim injunction during the fair at the infringer's booth. With a foreign infringer, service of the injunction might otherwise be practically impossible. Even the service of an interim injunction to a company from another EU Member State—though provided for by Council Regulation (EC) No 1348/2000—is often fraught with various practical problems. Thus, at a fair, it is advisable to instruct a bailiff as quickly as possible after receipt of the interim injunction.
To be sure that the interim injunction is actually served and the infringing products are seized, the applicant's lawyer should accompany the bailiff to the infringer's booth at the fair. Often, the applicant's lawyer is asked to explain to foreign infringers in English or French the general content of the interim injunction, including the infringer's obligation to hand over all infringing products. Since the bailiff can call for the support of the police in the case of resistance, infringers normally do not refuse to hand over the infringing products.
Proceedings after Service: Remedies and Settlement
Interim proceedings initiated during fairs often end at the injunction stage. However, there are different ways proceedings may come to end.
If the interim injunction was granted ex parte, the defendant may file a motion against the decision with the District Court. An oral hearing then takes place and the Court will either affirm or set aside the injunction. This judgment can be appealed by both parties at the Higher Regional Court. If the interim injunction was not granted ex parte, the defendant can directly appeal the interim injunction.
As often happens, if the defendant does not initiate any legal steps, the following situation arises. On one hand, the interim injunction has to be obeyed and is immediately enforceable; on the other hand, it is only a provisional ruling on the matter in dispute. It is therefore advisable that, within one month of service, the applicant requests that the defendant sign a final and binding declaration, if the defendant has not already rendered such a declaration voluntarily. By signing the declaration, the applicant accepts the interim injunction as a final and binding settlement between the parties and agrees not to challenge the injunction by waiving all suitable remedies. This is an efficient and inexpensive way to avoid substantive proceedings. However, if the defendant does not sign the final and binding declaration, then substantive proceedings have to be initiated by filing a statement of claim, in order to receive a final decision on the matter in dispute.
The defendant may also accept the ex parte injunction and limit his opposition with respect to costs, which the defendant has to bear under the injunction. In this case, the defendant would argue that interim proceedings were unnecessary, because the defendant would have accepted the applicant's claims if he had received a cease and desist letter prior to the motion. While, for this reason, it might be worth considering sending a cease and desist letter to the defendant prior to filing a motion, there are situations under which it is not advisable to warn the defendant beforehand. If the motion encompasses seizure of the infringing products, such a seizure is put at risk if the defendant has prior knowledge of the legal steps initiated against him. Various German courts have decided that a prior cease and desist letter is not necessary under these circumstances.
Due to the limited duration of a trade fair, good teamwork between the client and its lawyer is essential and will substantially influence the success of interim proceedings. If well prepared, interim injunctions during fairs in Germany are a speedy and very effective way to combat product plagiarism successfully.
Konstantin Krienke is an associate in the Munich office of Howrey LLP.
Björn Hajek is an associate in the Munich office of Howrey LLP.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.