Private cease-and-desist orders

In Germany, private cease-and-desist orders have become a booming business for certain lawyers and cover almost ridiculous infractions. The trend has spread to the internet. Many internet users are confronted with cease-and-desist orders sent by attorneys who claim that links to registered trade names violate the law. Recently, some users got tired of this abuse and decided to take action.

Here is an example of German cease-and-desist order practices: A company becomes aware of an improper advertising campaign run by one of their competitors. They instruct a lawyer to review the matter. The attorney confirms that there has been an infraction of the law and sends a letter on behalf of the party claiming the infraction and asserting a claim for damages. To enforce the cease-and-desist order by terminating the violative act, the claimant forces addressee to sign a contract admitting the act, accepting a monetary penalty and immediately pay attorney fees. If violations were to continue, the addressee would have to pay the penalty for breaching the contract and risk a suit filed by the claimant.

Independent of an acknowledgement of fault the addressee is responsible for the costs of a proper cease-and-desist order, as the German Supreme Court has repeatedly confirmed. It ruled that both from the perspectives of compensation and the principle of providing a service to another on his behalf and beneficial to him, § 677 BGB (German Civil Code), a cease-and-desist order is less expensive for the addressee than legal proceedings. Costs include attorney fees which depend upon the amount in dispute and are computed under the fee statute for attorneys (BRAGO). For a value of 75.000 DM, the fees would range from $ 190 to $ 950 (§§ 118, 120 BRAGO) plus expenses and possibly value added tax. To prevent abuse, serial cease-and-desist orders issued in a business fashion have been outlawed (Landgericht München - District Court Munich -, AZ 9HKO 14840/99, December 8, 1999). These private cease-and-desist orders should be distinguished from emergency measures by courts which are available in Germany under rules similar to those in the United States.

Stefan Münz, the German author of the well-known online manual "SELFHTML" recently filed a suit after receiving a cease-and-desist order for an alleged violation of the registered trade name "EXPLORER". "SELFHTML" contained, among other things, a link to FTP-EXPLORER. The trade name "EXPLORER" had been patented in Germany for the Ratinger Symicron GmbH- company. Attorney Freiherr von Gravenreuth served cease-and-desist orders on behalf of Ratinger to: 1. Stefan Münz as the author of the "SELFHTML"-document with the original link to FTP-EXPLORER and 2. all other users of a copied online manual who, for example, own homepages with a linked link to FTP-EXPLORER. Freiherr von Gravenreuth demanded the deletion of the controversial link from the documents and charged Stefan Münz and the users attorney fees. Münz hopes for vindication in court and argues that specifically with respect to links, the world-wide medium internet should help keep users informed of the latest information through links to relevant details on other websites and not being abused by attorneys who turn links into cash cows.

In a similar private cease-and-desist matter, Symicron GmbH countered by filing a criminal complaint against the issuer, alleging fraud, improper claims for value added tax and serial activities for commercial gain.

Editor's note: For more information on the business of cease and desist orders, go to www.advograf.de.