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Home Competition law

Federal Constitutional Court on procedural equality of arms in competition law

7. November 2022
in Competition law
Reading Time: 4 mins read
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Tobias Hilfrich

Tobias Hilfrich

Key Facts
  • The 2nd Chamber of the Federal Constitutional Court has not accepted a constitutional complaint for decision.
  • Procedural equality of arms is also required in unfair competition law for preliminary injunctions.
  • The other party must be involved in summary proceedings, even if warnings have been issued.
  • A judicial reference without informing the complainant constitutes a breach of procedure.
  • Differences between the request for injunctive relief and the court application may be minor and not serious.
  • A serious disadvantage to the complainant was not demonstrated in the preliminary injunction proceedings.
  • The prompt scheduling of the hearing ensures that the proceedings are conducted swiftly.

In its decision, the 2nd Chamber of the First Senate of the Federal Constitutional Court did not accept for decision a constitutional complaint and a simultaneous application for a temporary injunction against a court injunction in unfair competition proceedings.
The Chamber thus confirms the constitutional requirements for procedural equality of arms that apply in summary proceedings under press and commentary law (see decisions of the 3rd Chamber of the First Senate of September 30, 2018 – 1 BvR 1783/17 -, – 1 BvR 2421/17 -) also for preliminary injunction proceedings in the area of unfair competition law. It clarifies that it is necessary to include the other party in the summary proceedings even if an out-of-court warning and a reply to the warning have been issued and are available to the court, but there is no identity between the request for injunctive relief from the pre-litigation warning and the subsequently filed application for an injunction. In addition, a court order to the applicant to improve its application without informing the defendant also constitutes a procedural violation.
Nevertheless, there is no sufficiently weighty interest in establishing pure procedural violations in preliminary injunction proceedings if the discrepancies between the injunctive relief sought out of court and the relief sought in court are minor, there is no showing of serious prejudice, and an oral hearing is held promptly.

Facts

The constitutional complaint and the application for a temporary injunction filed at the same time are directed against a court-ordered temporary injunction that was issued without the participation of the complainant.
The complainant offers services in the dental field and in particular sends to its customers products that allow them to take an impression and photos of their dentition at home in order to create customized splints for straightening their teeth. The applicant in the main proceedings carried out a test purchase of such an impression set from the complainant, issued a warning to the complainant, inter alia, for allegedly failing to mark it with the “CE” mark and claimed an injunction against it.
The opponent in the main proceedings then applied to the Regional Court for an injunction. The court advised the petitioner in writing of concerns regarding petition drafting and prima facie evidence. The applicant then supplemented its application and obtained the issuance of the challenged preliminary injunction. The complainant was not involved in the judicial proceedings before the challenged decision was issued. The complainant filed an objection to the preliminary injunction and applied for protection against enforcement. The Regional Court dismissed the application for temporary suspension of execution.

Main considerations of the Board

It is true that there are procedural errors here. Thus, a violation of the principle of procedural equality of arms is to be seen in the fact that the request to cease and desist from the warning and the subsequently filed application for an injunction are not identical. Only in the case of identical wording is it ensured that the defendant also had sufficient opportunity to comment on the submissions made before the court to the extent required. The hearing of the complainant would therefore have been necessary before the issuance of the preliminary injunction. Secondly, a violation of the principle of procedural equality of arms lies in the issuance of a judicial notice to the applicant’s side without informing the complainant thereof. It is constitutionally required to put the respective opponent in the same state of knowledge as the applicant before issuing a decision. Therefore, judicial notices must also be communicated to him in a timely manner. This applies in particular if the purpose of legal information in the form of information is to improve an application or to provide an assessment of the prospects of success.
However, the infringements identified do not justify a sufficiently weighty interest in a declaratory judgment. The differences between the out-of-court cease-and-desist request and the originally filed application for an injunction as well as the amended version of the application are minor and not serious. According to the “core theory” developed in unfair competition law, the protection of a cease-and-desist order covers not only infringements that are identical to the prohibited form, but also equivalent infringements that leave the infringement core untouched. The core theory is constitutionally unobjectionable in principle. It serves the effective enforcement of injunctive relief. It would be considerably more difficult if the cease-and-desist order were deemed to have been violated only in those cases in which the act of violation corresponds exactly to the wording of the order. In principle, it is reasonable for the defendant to also comment on core-similar, non-identical infringements in the reply letter to an out-of-court warning. A boundary must be drawn where the application for an injunction leaves the subject matter of the dispute asserted in the out-of-court warning or introduces further subjects of the dispute. In the present case, however, the complainant had to be aware of the need to respond comprehensively to core violations due to the wording chosen out of court.
Furthermore, there is no demonstration of a serious disadvantage that could not be compensated for by the obligation to pay damages pursuant to Section 945 ZPO. The protection of the defendant in the preliminary injunction proceedings is sufficiently taken into account by the obligation to pay damages pursuant to Section 945 of the German Code of Civil Procedure. If the defendant suffers damage as a result of the enforcement, the claimant shall compensate for such damage regardless of fault. No irreparable damage to the complainant is apparent.

Moreover, the scheduling of the hearing on the opposition to the preliminary injunction still appears to be sufficiently timely to ensure that the proceedings are conducted expeditiously and to allow the appellant to make a comprehensive statement on the merits of the case.

Tags: Competition lawDamagesFederal constitutional courtserviceTestWarning

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