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German Act against Unfair Competition (amended version): Maintaining the free choice of legal venue (fliegender Gerichtsstand) – Failed attempt of the Düsseldorf Regional Court

As reported here (see post of 15 Sep 2020), probably one of the most discussed changes to the German Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb, UWG), by the Act to Strengthen Fair Competition, is the limitation of the scope of application of the so-called “free choice of legal venue ” (fliegender Gerichtsstand), which took effect on 2 December 2020.

According to the prior legal situation, an infringement of the UWG could be asserted before any court in whose jurisdiction the infringement was committed or in which it had an effect (so-called “free choice of legal venue”). In the case of infringements on the Internet, for example, all regional courts in Germany would thus de facto have jurisdiction. The selecting of a supposedly favourable court location for the respective case, on behalf of the applicant, was readily and extensively practiced by the legal profession.

However, according to Section 14 (2) UWG (amended), in the opinion of the Federal Ministry of Justice and Consumer Protection (BMJV), “legal disputes concerning infringements in electronic commerce” and “in telemedia”, i.e., areas of application that are very relevant in practice, are now excluded from this possibility so as to avoid abuse.

In preliminary injunction proceedings, the Düsseldorf Regional Court (Decision of 15 January 2021, Case No. 38 O 3/12, GRUR-RS 2021, 402) attempted to maintain the previous practice to some extent, concerning various misleading statements on the Internet, by assuming jurisdiction despite the new regulation and the defendant’s registered office being in Rhineland-Palatinate. In justification of its actions, the Regional Court stated that “contrary to its (in this respect misleading) wording”, the exception under § 14 para. 2, p. 3 no. 1 UWG was not relevant. The Court stated that the provision had to be interpreted restrictively to the effect that only those infringements would be excluded which “necessarily require action in electronic business transactions or in telemedia” and which “cannot be realised by using another communication channel”. The Regional Court sees its interpretation as being underpinned by the meaning and purpose of the provision, which, according to the legislative materials, is to prevent abusive warnings in online commerce.

Shortly thereafter, the Appeal Court of Düsseldorf apparently saw itself obliged to clearly oppose the Regional Court’s interpretation (order of 16 February 2021, case no. I-20 W 11/21). In the context of an immediate appeal regarding the aforementioned proceedings, the Appeal Court rejected this as being inadmissible and then, nevertheless, commented on the question of the Regional Court’s jurisdiction under the aspect of the so-called free choice of legal venue stating that there were considerable reservations about the Regional Court’s interpretation of Section 14 (2) UWG (amended).

As a result, the Appeal Court clearly rejects the Regional Court’s teleological restriction of the provision. Referring to the intention of the legislator, the Appeal Court concludes that the Regional Court’s restriction of the scope of application of Sec. 14 (2) UWG (amended) was precisely not what was intended.

It remains to be seen which interpretation of the provision of Section 14 (2) UWG (amended) will be adopted by the other Regional and Appeal Courts and which interpretation will ultimately be confirmed by the Federal Court of Justice.

Our blog contributions shall provide an overview with regard to legal topics, legislation and case law and are supposed to provide some general information rather than constituting any specific advice. Please do not hesitate to contact Maiwald and in particular the authors of the particular contributions if have any questions on the addressed topics or on other legal issues.

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Authors

Dr Christian Meyer

Principal

Attorney-at-Law

Certified Specialist Lawyer for Intellectual Property