Germany: Amended rules to Unfair Competition Law

10 January 2021

Substantial amendments of the “Gesetz gegen den unlauteren Wettbewerb” (short “UWG”) – the German codification of the laws of unfair competition – entered into force in December 2020. The modifications are meant to strengthen fair competition and to prevent so-called abusive warning letters.

The changes relate in particular to the locus standi, the requirements for legitimate warning letters and a reimbursement of costs and the competent court for litigious matters:

1. Locus standi

The locus standi of competitors has been restricted. Not every competitor has the right to sue but it is required that the competitor sells or demands goods or services to a considerable extent and not only occasionally. However, the requirement will not be understood to be too stringent in terms of scope and duration of distribution, but some proof has to be provided.

2. The locus standi of associations

The locus standi of associations with legal capacity has also been specified. Only associations with legal capacity for the promotion of commercial or independent professional interests are now eligible. This requires that an association has been entered into the list of qualified economic associations. Only associations are eligible which can refer to a significant number of members and the infringement has to affect the interests of their members. The association must have at least 75 members to fulfil the according legal requirement.

3. Requirements for warning letters

The new law stresses the need to send a warning letter (“Abmahnung”) before legal proceedings are commenced. It also provides specific requirements for the content of warning letters. The following information must be provided in the letter in a clear and comprehensible manner:

  • name or company name of the party which raises the claim
  • the provision of law used as legal basis for the claim
  • the claim for reimbursement of cost has to be specified
  • details on the infringement have to be provided

The new rules also contain provisions that request competitors not to claim a reimbursement of their expenses, namely for warning letters in the event of violations of statutory information and labelling obligations committed in electronic business transactions or in tele media.

4. “Flying place of jurisdiction”

Finally, the so-called “flying place of jurisdiction” has been restricted. It often provides claimants with a rather wide selection of courts for filing an infringement action as it allows to choose a court with specific expertise for the matter in question. This has been changed for legal disputes arising from online infringements despite prior huge criticism from the legal profession. Only the court in whose district the defendant has its general place of jurisdiction shall remain competent. The same applies for legal disputes asserted by associations, qualified institutions, chambers of industry and commerce and comparable organizations. However, the restrictions only apply to claims based on unfair competition law and not for trademark, design or copyright matters.