The German Federal Supreme Court decided on the 29th September 2016, published on the 10th January 2017, to the surprise of many that a cease and desist order regarding the distribution and promotion of infringing products in principle includes the obligation to recall the products that are already on the market. It is to be expected that this judgment will have enormous influence on the practice, in particular with regard to IP infringement cases.
The court had to deal with the question whether the recipient of a cease and desist order which prohibits the distribution and promotion of certain products violated that order by not recalling products that the infringer had already sold to retailers but were still available on the market. The wording of the court order in this case did not contain any specific obligation to recall. Nor did the reasons of the court order show such obligation to recall. The claimant had also never shown in the reasoning of his cease and desist claims that he was seeking an order to recall products. It was only when the claimant saw that the retailers were still selling the products of the manufacturer that he complained that the cease and desist court order would have been violated.
Quite surprisingly, the court shared this view and stated furthermore that its interpretation shall apply to cease-and-desist orders in general.
The Federal Supreme Court clarified that the recipient of a legal order prohibiting the distribution or promotion of certain products has to make sure that products which have been sold and distributed already may not be distributed any longer. This shall apply despite the fact that the infringer no longer has these products. To comply with the cease and desist order the infringer has to request the recall from his retail business partners. The Supreme Court emphasized that there is no need for an explicit mention of the recall obligation within the wording of the cease-and-desist order at all.
The matter in dispute has been highly controversial in discussions amongst the Higher Regional Courts in Germany for many years. Just recently the Higher Regional Court of Frankfurt a. M. took a different view although the Federal Supreme Court mirrored its interpretation already in a prior case in late 2015 (case “Hot Sox“). With the present new judgement the controversial question seems now to be answered for good: a cease and desist order generally also obliges the infringer to recall its products.
We discussed the above mentioned decisions of the Higher Regional Court of Frankfurt a. M. and the German Federal Supreme Court from 2015 recently within our IP-Enforcement series on LimeGreen IP News. You can find the video here (Link). A second video regarding this most recent decision by the German Federal Supreme Court will follow.