Cease & Desist Letter Received

Discussion in 'Legal' started by Mister B, Mar 15, 2019.

  1. Mister B

    Mister B UKBF Ace Free Member

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    We've just had the misfortune to receive a cease and desist letter from a firm of lawyers based in Germany.

    The claim is that their client manufactures luggage and sports accessories, and the mark that they use, which is a series of chevrons running across the product, is registered under both EU and German law. Having looked into this, I don't dispute their registration but would appreciate some guidance as to how to proceed. They've instructed us to:

    1. Immediately cease and desist from using the mark.
    2. Destroy all goods that feature the mark.
    3. Recall all goods in free circulation.
    4. Provide information as to the supply chain and distribution of the product.
    5. Undertake to compensate them for any damage that they may have received through the course of our actions.

    The product in question is widely available from other suppliers and we sell very few of them-in fact the product has been discontinued. So athough I have no problem in removing this from sale, are they just fishing or should I reply formally through solicitor? Or reply informally stating that we're happy to remove the product from sale, but do so without admitting liability?


    Mister B
    Posted: Mar 15, 2019 By: Mister B Member since: Aug 31, 2007
  2. Chris Ashdown

    Chris Ashdown UKBF Legend Free Member

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    You need to employ a solicitor with commercial expertise to write the answer for you as potential for damages far outway the cost of a solicitor

    Not sure if Registered is the same as trademark, maybe BYRE another poster and expert on germany can advise
    Posted: Mar 15, 2019 By: Chris Ashdown Member since: Dec 7, 2003
  3. Inva

    Inva UKBF Regular Free Member

    277 42
    Tell them you voted leave on Brexit
    Posted: Mar 15, 2019 By: Inva Member since: Aug 10, 2018
  4. Mister B

    Mister B UKBF Ace Free Member

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    Thanks Chris. I've spoken with my solicitor in the UK but as it's a court case in Germany, he's recommended an associate in Germany. As the removal of the stock won't affect me too much, I'm happy not to contest it. Just have to get my thoughts written in legal speak.

    Mister B
    Posted: Mar 16, 2019 at 2:30 PM By: Mister B Member since: Aug 31, 2007
  5. Mister B

    Mister B UKBF Ace Free Member

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    The ironic thing is that I did, and would gladly do so again!

    Mister B
    Posted: Mar 16, 2019 at 2:30 PM By: Mister B Member since: Aug 31, 2007
  6. kulture

    kulture UKBF Legend Staff Member

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    Check with your solicitor, but I believe that it is important to highlight that you did not manufacture these and you bought them from a legitimate supplier. That you no longer stock the item and that it was a low volume item anyway.
    Posted: Mar 16, 2019 at 3:26 PM By: kulture Member since: Aug 11, 2007
  7. Mister B

    Mister B UKBF Ace Free Member

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    That's my plan. To highlight the fact that sales volume is negligible, we bought them from a legitimate supplier and that we're prepared to withdraw them from stock. In addition to this though we'll get the solicitor to phrase in legal speak that we do not accept liability for further costs and action.

    Not overly concerned about this, but just need to put it to bed in an efficient manner. I'll let you know what the solicitor says tomorrow.

    Mister B
    Posted: Mar 17, 2019 at 11:14 AM By: Mister B Member since: Aug 31, 2007
  8. cjd

    cjd UKBF Legend Full Member - Verified Business

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    Personally I wouldn't bother with a solicitor at this stage, I 'd just write back, tell them you're just a small online retailer that's sold no more than 3 of these things, that you have none in stock and stopped selling them months ago. You don't make them and you had no idea it was anyone else's brand.

    Just make yourself look too insignificant to bother with. They have costs too and won't want to waste time and money on someone that doesn't have any to give them.

    You could consider grassing up your supplier, they're probably more interested in him than you.
    Posted: Mar 17, 2019 at 11:39 AM By: cjd Member since: Nov 23, 2005

    JEREMY HAWKE UKBF Legend Full Member

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    There may be a bigger carrot at the end for the German side
    10 years ago an import consignment of tracksuits were sized at a warehouse in Taunton there were only 8 boxes .
    The authorities were keen to find who was on the UK side as this took them to the main EU distributor

    This maybe one of the roads to getting at your supplier who they may already know about
    Posted: Mar 18, 2019 at 6:49 AM By: JEREMY HAWKE Member since: Mar 4, 2008
  10. fisicx

    fisicx It's Major Clanger! Staff Member

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    Except for their #5. That’s the one that may bite you on the bum. Even if they are happy with items 1 to 4, you will still be getting a bill for #5.
    Posted: Mar 18, 2019 at 8:00 AM By: fisicx Member since: Sep 12, 2006
  11. Mister B

    Mister B UKBF Ace Free Member

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    That's the way I'm heading at the moment. The figures involved are pitifully small so in a way, I'm hoping that it's a warning shot that may go away. Taking it seriously though.

    Mister B
    Posted: Mar 18, 2019 at 1:24 PM By: Mister B Member since: Aug 31, 2007
  12. Mister B

    Mister B UKBF Ace Free Member

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    Hadn't though of that perspective. There are many other retailers selling similar products so no doubt the brand will be knocking on their doors in the newr future as well.

    Mister B
    Posted: Mar 18, 2019 at 1:25 PM By: Mister B Member since: Aug 31, 2007
  13. Mister B

    Mister B UKBF Ace Free Member

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    And that's one of my biggest concerns. My intention is to reply, agree to withdraw the products from sale, but without admitting liability.

    Mister B
    Posted: Mar 18, 2019 at 1:26 PM By: Mister B Member since: Aug 31, 2007
  14. The Byre

    The Byre UKBF Ace Free Member

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    The potential plaintiff has to jump through many, many hoops before he/she/they/it can get any kind of court order enforced in the UK. In other words, they are probably whistling Dixie!

    I have a paper on this subject and will dig it out, but I am being dragged away on business right now, so my full reply has to come later.
    Posted: Mar 18, 2019 at 2:02 PM By: The Byre Member since: Aug 13, 2013
  15. Mister B

    Mister B UKBF Ace Free Member

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    Thanks a million, that would be most helpful.

    Mister B
    Posted: Mar 18, 2019 at 2:45 PM By: Mister B Member since: Aug 31, 2007
  16. The Byre

    The Byre UKBF Ace Free Member

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    OK - here goes -

    What is totally unclear from your OP is what the hell it is that you are selling. IF you are selling perfectly legitimate and original products made by this manufacturer, then you can tell them to go to hell. They are trying it on!

    (It may be that they have exclusive main dealers for every area and they seek to protect these areas and your selling of their stuff has come to the attention of their local UK dealer and now they want to put the fear of God into you. As I do not know what it is that you are selling, this remains just a guess!)

    What they are after is counterfeit goods and if that is what you are selling, you may (if they go the whole hog) be for the high jump. That is a criminal offence! German companies are extremely litigious - they take people to court just for fun and/or to prove a point!

    Without having seen this letter (obviously!) I cannot give you a definitive answer, but it sounds like an initial out-of-court last reminder. If you do not respond to an out-of-court reminder (similar to the English 'Letter Before Action') the potential plaintiff can apply to the responsible court for an official reminder pursuant to paragraph 692 of the German civil code. The court does not (at this stage) examine the case, but merely sends the reminder.

    The German courts ONLY send via the Bundespost (federal post office) and the franking stamp and registered delivery have legal status, in that you would be required to act within a certain time after the date. This would be a so-called 'Yellow Letter' because it once was printed on yellow paper. It will be sent to the official address of your company.

    If you receive such a letter, you should object immediately if the claim is unfounded, because your opposition forces the court to examine whether the claim exists at all.

    Most claims fall at this hurdle because (if the defendant objects to the claim) the plaintiff has to pay all initial court costs in advance.

    If you reply to the letter, objecting to the claim, the plaintiff has to stump up court costs to pursue the matter. If you do nothing, the next thing will be a judgement by default.

    You can nip this nonsense in the bud by simply replying that you object to the claim, as it is speculative, vexatious and totally without substance or merit and any injury to their trademark (or whatever it is that they are claiming damages for) should have been filed with the English courts as it falls outside of the jurisdiction of the German legal system.

    You must point out that you have not traded in Germany at any time and the plaintiff has suffered no genuine loss i.e. the plaintiff has to go to the defendant and cannot just file a case in his home town.

    If the plaintiff decides to pursue the claim, here's an outline of what the plaintiff must do to gain title in the UK (this is for the benefit of those of you playing 'The Home Game' and for the Beagles amongst us who like to count the numbers of angels on the head of a legal pin!)

    Firstly, they must gain title in their local jurisdiction, i.e. win the case and thereby obtain an enforceable court order.

    English law implemented EU Directive 74 (enforcement of judgements in different jurisdictions) on 10 January 2015. In general, the changes have simplified the enforcement procedure and the procedures are less time-consuming and cost-intensive. The reality, however, is that it continues to take a long time for the judgements to be registered and for a corresponding instrument to be issued.

    Unlike judgements issued before January 2015, where various documents have to be obtained, the creditor must now 'only' obtain a certificate from the court of origin in the standard form set out in Annex 1 to the Brussels Directive, which proves that judgement is final.

    Information about the judgement as well as details of interest and costs must also be included. The plaintiff must submit to the executing authority for enforcement a certified copy of the judgement and the deed of the court of origin. The said authority will require a certified translation of the instrument or judgement, completed by a registered court translator. Nearly always the certified translation of the entire judgement is required. In complex contentious litigation, this can easily be more than 30 or 40 pages of text, which means significant translation costs.

    The creditor must submit the instrument and the judgement to the person liable for enforcement, together with a translation before the judgement can be enforced. The enforcement order under the recast Brussels Directive is assigned to the Queen's Bench Division.

    After registration, the executing creditor is entitled to enforce the German judgement like an English judgement and all the procedural steps of the English legal system can be used.

    All the above only applies if the case falls legitimately under German law. The German legal system requires the plaintiff to go to the courts of the defendant and cannot use his/her local courts unless it has been agreed by both parties that the area of jurisdiction (Gerichtsstand) is elsewhere.

    In your case, I strongly suspect that the 'Gerichtsstand' may easily be England or Scotland and not the local German courts. N.B. Germany has 16 federal states and each one is a separate jurisdiction - similar to the US.
    Posted: Mar 18, 2019 at 4:28 PM By: The Byre Member since: Aug 13, 2013
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  17. Mister B

    Mister B UKBF Ace Free Member

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    Wow, thank you for the most informative reply. Allow me to clarify a couple of your queries:

    1. The product that we sell is manufactured under our own brand, and to our own design. Although the design could be construed as being generic. (It's quite straight forward.)
    2. We have sold two of these units, on Amazon.de which is where the plaintiff discovered our product and although the plaintiff is Danish, the case is being brought before the German court.
    3. The goods are most certainly not counterfeit, nor could they be seen to be passing off the brand in question. The issue that the plaintiff has is that our design,(a reflective backpack cover,) uses a series of reflective chevrons which actively relfect so increasing nighttime visibility. The brand are of the opinion that as they use chevrons within their trademark, there is a very high probability that members of the public may confuse our design, as one of their products.
    4. The letter is yet to be received, we simply recieved a PDF copy by email, in advance of the original being sent by registered post. We have been given seven days to respond, failing to respond will result in the matter being escalated.
    5. The cease and desist (which they have asked us to sign,) specifically states that:

    a. We agree not to product anymore goods with chevrons on.
    b. That we agree to pay a sum of compensation as set by the plaintiff.
    c. We should destroy all existing stock.
    d. We should furnish them with all cost and sellign prices since the product was conceived along with the volumes sold. We should also let them have all supplier information.
    e. We undertake to compensate them for any losses incurred both past, present and future, including al llegal costs.
    f. That we should pay them all of their out of court costs, totalling 1973.90 euros.
    g. That the court of jurisdiction is in Hamburg.

    Now there's no way that we will sign and agree to the above, I'm of the opinion that an agreement to follow a and c above, without admitting liability is all I need do at the moment.

    Your thoughts would be appreciated.
    Posted: Mar 18, 2019 at 4:54 PM By: Mister B Member since: Aug 31, 2007
  18. The Byre

    The Byre UKBF Ace Free Member

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    You'll get my thoughts tomorrow!
    Posted: Mar 18, 2019 at 4:57 PM By: The Byre Member since: Aug 13, 2013
  19. Mister B

    Mister B UKBF Ace Free Member

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    You're a star. Have a good evening.
    Posted: Mar 18, 2019 at 4:59 PM By: Mister B Member since: Aug 31, 2007
  20. The Byre

    The Byre UKBF Ace Free Member

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    OK, busy day today, so I'll keep it short!

    1. This is at best (assuming that what you say is "the truth, the whole truth and nothing but the truth!") just a trademark infringement. They are obviously trying to dress their case up as something it is not, in order to establish jurisdiction in Germany.

    2. The demands made by the Danish manufacturers are standard OTT demands that seem to crop up again and again in such cases when German lawyers are doing their thing. The object is to frighten the other side into making admissions and agreeing to conditions that otherwise they would not contemplate. It is BTW a tactic that very often works!

    3. A plaintiff can only bring a case against a defendant outside the natural jurisdiction (i.e. that of the defendant - in your case either England or Scotland) if damage or injury or the potential for such damage or injury occurred in another jurisdiction. In plain English, they can only sue for damages in Germany if you (and not a third party!) sold or tried to sell goods using their trademark IN GERMANY. Big question - did you advertise or sell your goods in Germany?

    4. As this is in all probability a trademark case, any justification of injury to their trademark is down to the details. Assuming German jurisdiction applies, a German judge would have to look at the two trademarks and decide just how similar they really are. If you want to, you can either post here (or PM links to them to me) images of both marks - but I am very far from being any species of expert on German and EU trademark law.

    5. Under Article 5(3) of the EU (unfair competition) Regulation, where a defendant is domiciled in a member state other than where the court is situated, proceeding for damages can be brought on the basis of an act that took place in that other member state where damage occurred in the court’s jurisdiction. The benchmark ECJ case that clarified this issue is Coty Germany GmbH v First Note Perfumes NV C-360/12 - if you want to dig it up and do some background reading!

    In that case, the Belgian company, First Note, sold bottles of perfume to a German wholesaler which collected them from FN’s Belgian premises and exported them to Germany, before selling them in Germany. Coty brought proceedings for trademark infringement and unfair competition against FN in Germany. The German courts dismissed the proceedings for lack of jurisdiction, on the basis that FN had only acted within Belgium. The ECJ backed their decision and issued a series of outlines and ground rules for what does and does not establish jurisdiction in matters of tort.

    My 30 cents worth to you - right now, do nothing, admit and/or agree to nothing and just gather the facts.

    My 30 cents worth to the Danish manufacturer - you've spent 60€ on a lawyer's letter and no doubt put the frighteners on this bloke, but going any further and getting a judgement in Germany and then enforcing that judgement in England at the Queen's Bench Division will cost you thousands. By all means, get the German court to send out a 'Yellow Letter' and see if they allow you to win the case by default. But if they contest the case - drop it! Success is very far from certain!
    Last edited: Mar 19, 2019 at 11:03 AM
    Posted: Mar 19, 2019 at 10:56 AM By: The Byre Member since: Aug 13, 2013