German Bundesrat confirms Law to Strengthen Fair Competition
On 9 October 2020, the German Bundesrat approved the law to strengthen fair competition, which the Bundestag had already passed on 10 September 2020. The declared aim of the law is to prevent the abuse of cease and desist letters and preliminary injunctions and to protect in particular self-employed persons and small and medium-sized enterprises from the consequences of mass warnings which are harmful to competition. The draft law has been the subject of critical and controversial debate in IP practice.
Apart from e.g. increased requirements for the right to sue and reduced financial incentives for the cease and desist letters, the law will in particular abolish the so-called "flying jurisdiction" (free choice of local jurisdiction) for infringements of the Unfair Competition Act (UWG) on the Internet, in electronic commerce and in tele media.
The consequences can be considerable: in future, a plaintiff/applicant will be referred to the local court where the defendant has its general place of jurisdiction. It may then no longer be possible to pursue competition infringements before the courts which have developed over the years into centres of competence, such as Hamburg, Munich, Düsseldorf, Cologne, Frankfurt am Main and Stuttgart, but before courts with no specific experience in the field of unfair competition. This will have an impact on the quality and uniformity of court orders/judgements.
In practice, this will also lead to the fact that in the event of a possible violation of the UWG by a third party, the client and his lawyer will have to react even faster than before, since an urgency period of only four weeks (instead of up to two months, e.g. at the Düsseldorf District Court) must be assumed for urgent matters before the final examination of the factual and legal situation.
The law was forwarded to the Federal Government of Germany, which is now submitting it to the Federal President for signature. It will then be promulgated in the Federal Law Gazette. It is to enter into force (in large part) on the day after.