Threat of damages: the double-edged sword of urgent legal protection

One temporary injunction (EV) is the fastest weapon in trademark law or competition law. It often stops an alleged infringer within 24 hours without the infringer being heard beforehand.

This is particularly drastic if the disposal is accompanied by a Sequestrationi.e. the immediate judicial custody and removal of the entire goods.

But what happens if this quick victory later turns out to be a mistake? Business operations are halted, the goods are taken off the market and the reputation is damaged. For the opponent, the damage has already been done.

This is precisely where § Section 945 of the Code of Civil Procedure (ZPO). This paragraph is the financial safety net of the rule of law for the defendant - and at the same time the greatest financial risk for the claimant. This article explains when Section 945 ZPO applies, what damages are eligible for compensation and how the claim is enforced.

What makes Section 945 ZPO so dangerous: strict liability

The decisive feature of Section 945 ZPO is the strict liability. This is also referred to as pure strict liability.

In contrast to normal claims for damages, it does not matter whether the claimant knew or should have knownthat his application was unfounded. It does not matter whether he acted "in good faith".

The mere fact that a preliminary injunction was obtained and enforced, which was Objective proves to be incorrect, triggers liability. The applicant is liable for the "operational risk" that he has set in motion by applying for the urgent measure, not for any fault in the application.

When is a temporary injunction considered "unjustified"?

The claim under Section 945 ZPO presupposes that the interim injunction proves to be "unjustified from the outset". This is the case in several instances:

Case 1: The main proceedings are lost

This is the classic use case. The defendant (the alleged infringer) wins the final proceedings (main proceedings) because the court decides that the trademark has not been infringed at all or the applicant's trademark is even declared invalid.

The main proceedings thus "correct" the erroneous expedited decision.

Case 2: The PA is revoked in the objection proceedings

The defendant lodges an objection to the order. After an oral hearing, the court comes to the conclusion that the injunction should be revoked - for example, because the defendant provides better evidence or the applicant's case was incomplete.

Case 3: Lack of urgency

This case is tricky: the applicant may have had in the matter right, but he waited too long with the application after becoming aware of the violation ("self-refutation of urgency"). Since urgency is a mandatory requirement for the PA, it was inadmissible from the outset and therefore "unjustified".

What damage is eligible for compensation? (The scope of the claim)

The principle is: the defendant is to be placed in the same position by the damages as if the injunction had been granted. never have been issued and implemented.

Damages eligible for compensation include in particular

• Legal fees: The full costs for the defense against the preliminary injunction (protective letter, opposition proceedings, attorney's fees).
• Costs incurred due to sequestration: If sequestration was ordered, the applicant is liable for the bailiff's costs, the removal of the goods, the expensive storage costs with the forwarding agent and often also for the loss of value or damage to the goods during storage.
• Lost profit: The profit that was demonstrably lost due to the sales stop or - in the case of sequestration - due to the total loss of the goods.
• Useless expenses: Direct costs that were wasted as a result of the injunction. Examples include costs for the destruction of goods, product recalls or trade fair stands that have already been paid for but could not be used.
• Reputational damage: This item is the most difficult to quantify, but is conceivable if business partners have demonstrably bailed out due to the injunction (or the bailiff's attention).

The important thing is that the damage must causal through the Execution of the order, not solely by its issuance.

The process: How do you enforce Section 945 ZPO?

Compensation is not automatically determined by the court. The (former) defendant must actively assert their claim in a separate court proceedings - in an independent action for damages.

In this new process, the full burden of proof lies with the injured party: he must not only prove causality, but above all the Height of his damage (e.g. the loss of profit). In practice, this is often the biggest hurdle.

The regular limitation period of three years from knowledge of the claim must also be observed.

Prevention: How applicants minimize the risk of liability

Anyone applying for a temporary injunction should be aware of the risk under Section 945 ZPO and actively manage it:

• Most careful examination: Is the claim "watertight"? Is the evidence (test purchases, expert opinions) clear?
• Maintain urgency: Do not delay after becoming aware of the violation. If you wait for weeks, you run the risk of the injunction being revoked simply because of a lack of urgency.
• Risk assessment: Is the benefit of a quick stop worth the financial risk? In particular, the application for a Sequestration should be extremely well considered, as it massively increases the potential claims for damages. In cases of doubt, a direct action on the merits may be the safer, albeit slower, route.
• Security deposit: Sometimes the court orders the applicant to provide a security (e.g. bank guarantee) on its own initiative. This explicitly serves to secure potential § 945 ZPO claims.

Conclusion

§ Section 945 ZPO is the necessary and fair corrective to the sharp sword of the interim injunction.

It is a serious warning for applicants: a PA is not a "test balloon". An unfounded application, especially with sequestration, can be extremely expensive, even if you have acted "in good faith".

It is an important opportunity for defendants: anyone who has been wrongly stopped by an urgent measure is not without protection and can demand comprehensive compensation for the damage suffered.

FAQ - Frequently asked questions about Section 945 ZPO

What does "strict liability" mean in Section 945 ZPO? It means that the applicant is liable, even if he did not knowthat his application was wrong. The mere fact that the PA was objectively unjustified is sufficient for liability.

Does Section 945 ZPO also apply to the costs of sequestration? Yes, absolutely. The costs incurred as a result of unjustified sequestration (removal, storage, loss of value of the goods) are a major cause of claims for damages under Section 945 ZPO and often drive up the amount of damages considerably.

Do I have to pay the damages immediately according to § 945 ZPO? No. The claim only arises when the PA has been legally revoked. The opponent must then sue you for payment (usually in a separate action) and prove his loss.

Which costs are most common under Section 945 ZPO? The most common costs are the legal fees for defending against the unjustified injunction and - if sequestration has taken place - the storage and transportation costs and the value of the seized goods. Loss of profit is also a very high item for production companies.

Is the claim under Section 945 ZPO time-barred? Yes, the claim is subject to the regular limitation period of 3 years, starting at the end of the year in which the claim arose and the aggrieved party has become aware of this (i.e. usually after the revocation of the PA).

 

Have you been confronted with an injunction yourself or are you considering filing an application? Due to the considerable financial risks involved, professional advice is essential. Contact us for a sound initial assessment of your case.