In 2013, the Higher Regional Court of Munich, in main proceedings, ordered a supplier of Bach flower products to refrain from advertising and/or selling products labelled as spirits under the name “Rescue Drops” and/or “Rescue Night Spray” in the ordinary course of business. The demand, which was also made before the court of first instance, that the defendant should – within two weeks after service of the judgment – retract the allegation that its “Original Bach Flowers” are marketable in Germany without being approved as pharmaceutical products and/or registered, was no longer part of the appeal proceedings Since the supplier’s products continued to be available in pharmacies, the creditors petitioned the Court to impose an administrative fine. The Regional Court denied the motion for the imposition of an administrative penalty. However, the appellate court found that the restraining order had been violated: The supplier had not recalled products that had already been delivered – as is required.
The German Federal Court of Justice sustained the decision of the appellate court. The court that conducts enforcement proceedings must determine what practices are covered by the restraining order through interpretation of the writ of execution. The obligation to refrain from an act that constitutes a continuing violation is generally interpreted to include taking all possible and reasonable actions to eliminate the violation , if this is the only way to enforce compliance with the restraining order . It is irrelevant which substantive legal claims the creditor has . It is also not objectionable that the question whether the particular measure to eliminate the violation was proportionate was first examined in enforcement proceedings if the debtor did not address this in the regular proceedings.
The German Federal Court of Justice further found that the obligation to eliminate the viola-tion also encompasses the conduct of third parties. To be sure, the party against whom the injunction is directed is generally not responsible for the independent actions of third parties. However, it is required to exert influence on third parties whose actions are of economic benefit to him, if he/she can seriously expect violations on their part and has the legal and actual ability to influence the conduct of such third parties. In this case, the German Federal Court of Justice affirmed the debtor’s obligation to recall products already delivered to pharmacies, since the risk that the products in question would again be placed on the market continues as long as the products delivered by the debtor are available in pharmacies.
However, it is problematical that preliminary injunctions are frequently issued as court order – without the participation of the respondent. In these cases, it is not possible to assert grounds that may make interpretation of the right to injunctive relief as including a recall obligation seem unreasonable or disproportionate before the preliminary injunction is issued. For this reason, there is no examination of the proportionality of the remedy, which the German Federal Court of Justice considers necessary.
In addition, a recall always has the nature of a sanction and damage-mitigation measure . However, claims for damages and recall claims are generally dismissed if they are expressly asserted in preliminary injunction proceedings, since the main issue may not be anticipated in proceedings for provisional legal protection.
Moreover, a recall has special economic effects in the pharmaceutical industry. For example, our general experience has been that the initial market-entry phase for a pharmaceutical decisively determines its economic success. Losses in this phase are generally not made up thereafter and cannot be adequately compensated under a claim for damages pursuant to § 945 ZPO [German Code of Civil Procedure]. It is also common experience that once phar-maceuticals are no longer prescribed by physicians due to a stop-sale order or recall, they will not be prescribed by them in the further course of their practice. The punitive nature of such a restraining order is evident as is the fact that the main issue is anticipated in preliminary in-junction proceedings , contrary to § 938 ZPO.
Nevertheless: For the time being, it is necessary to adjust to the broadening interpretation of the right to injunctive relief to include recalls. This will result in an increase in submissions of protective briefs, since this is the only way to ensure a hearing before a court – before the issuance of a preliminary injunction – on the reasons why a recall of delivered products is disproportionate. This decision of the German Federal Court of Justice will also result in an increase in the assertion of damages claims under § 945 ZPO, since, when unjustified prelim-inary injunctions are issued, companies will use this regulation to attempt to recover the losses they have incurred (at least in part).
