Unfair Competition Law* of June 7, 1909
(as last amended by the Law of June 22, 1998)**
1. Any person who, in the course of trade and for the purposes of competition, commits acts contrary to honest practice may be enjoined from such acts and held liable for damages.
2. For the purposes of this Law, goods shall also include agricultural produce, and commercial services and interests shall also include agricultural services and interests.
3. Any person who, in the course of trade and for the purposes of competition, makes misleading statements concerning business circumstances, in particular the nature, the origin, the manner of manufacture or the pricing of individual goods or commercial services or of the offer as a whole, price lists, the manner or the source of acquisition of goods, the possession of awards, the occasion or purpose of the sale or the size of the available stock, may be enjoined from making such statements.
4.-(1) Any person who, with the intention of giving the impression of a particularly advantageous offer, makes statements which he knows to be false and liable to mislead in public announcements or communications intended for a large number of persons, concerning business circumstances, in particular the nature, the origin, the manner of manufacture or the pricing of goods or commercial services, the manner or source of acquisition of goods, the possession of awards, the occasion or purpose of the sale or the size of the available stock, shall be liable to imprisonment of up to two years or a fine.
(2) If the false statements referred to in subsection (1) are made in a business undertaking by an employee or agent, the proprietor or director of the enterprise shall be liable to punishment, together with the employee or agent, if the act occurred with his knowledge.
[Amended by Law of March 7, 1990]
5. For the purposes of Sections 3 and 4, pictorial representations and other devices intended and suited to replace such statements shall be considered equivalent to such statements.
[Amended by Law of October 25, 1994]
6.-(1) If public announcements or communications intended for a large number of persons advertise the sale of goods originating from an insolvent estate, but the goods no longer belong to such estate, any reference to the fact that the goods originated from an insolvent estate shall be prohibited.
(2) Any reference made intentionally or negligently to the fact that advertised goods originate from an insolvent estate in violation of subsection (1) shall constitute an offense. Any person committing such offense shall be liable to a fine of up to DEM 10,000.
[Amended by Law of October 5, 1994]
6a.-(1) Any person who, in the course of trade with the final consumer, makes reference in connection with the sale of goods to his capacity as manufacturer may be enjoined from so doing, unless he
1. sells exclusively to the final consumer; or
2. sells to the final consumer at the prices accorded to his resellers or commercial users; or
3. unmistakably refers to the fact that the prices for sales to the final consumer are higher than those for sales to resellers or commercial users, or that this is in some way obvious to the final consumer.
(2) Any person who in the course of trade with the final consumer makes reference in connection with the sale of goods to his capacity as wholesaler may be enjoined from so doing, unless he predominantly supplies resellers or commercial users and complies with the requirements of items 2 or 3 of subsection (1).
6b. Any person who, in the course of trade and for the purposes of competition, issues to final consumers entitlement cards, membership cards or other vouchers for the acquisition of goods or who sells goods on production of such vouchers, may be enjoined from so doing, unless the vouchers give entitlement for one single purchase only and are individually issued for each purchase.
6c. Any person who in the course of trade endeavors himself or through other persons to induce persons not being dealers to purchase goods, commercial services or rights by means of the promise of particular advantages for themselves if they induce others to conclude such transactions and who in turn are to be afforded such advantages of this type of promotion in return for a corresponding recruitment of further purchasers, shall be liable to imprisonment of up to two years or a fine.
[Added by Law of May 15, 1986 and amended by Law of June 22, 1998]
7.-(1) Any person who advertises or conducts sales events in the retail trade which take place outside the framework of regular trade, which serve to accelerate the sale of goods and which create the impression that particular advantages are afforded to purchasers (special events) may be enjoined from so doing.
(2) A special event within the meaning of subsection (1) shall not be deemed to exist if individual goods indicated by quality or price are offered for sale and if such offers are compatible with the normal trade of the undertaking (special offers).
(3) Subsection (1) shall not apply to special events for a duration of 12 working days
1. which begin on the last Monday of January and on the last Monday of July and in which textiles, clothing, footwear, leather goods or sports goods are offered for sale (winter and summer sales);
2. to celebrate the existence of an undertaking in the same branch of trade at the end of each 25 years (jubilee sales).
[Amended by Laws of July 25, 1986 and July 25, 1994]
7a. [Repealed by Law of July 25, 1986]
7b. [Repealed by Law of July 25, 1986]
7c. [Repealed by Law of July 25, 1986]
7d. [Repealed by Law of July 25, 1986]
8.-(1) If the clearance of an existing stock of goods becomes unavoidable due to circumstances (forced clearance)
1. due to damage caused by fire, water, storm or similar occurrence beyond the control of the organizer; or
2. prior to the execution of a rebuilding project subject to declaration or authorization under building regulations,
it shall be permissible, where necessary to conduct the forced clearance, to hold clearance sales outside the periods referred to in Section 7(3) for a maximum duration of 12 working days. The reason for clearing the stock of goods shall be stated in the announcement of a clearance sale in accordance with the first sentence.
(2) Clearance sales for the purpose of closing down the entire business may also be held outside the periods referred to in Section 7(3) for a maximum duration of 24 working days if the organizer has not held a clearance sale due to the closing down of a business of the same kind for at least three years, unless special circumstances apply which justify a clearance sale within a shorter period. The second sentence of subsection (1) shall apply mutatis mutandis.
(3) Clearance sales under item 1 of the first sentence of subsection (1) shall be declared to the appropriate official professional representative body for trade, craft and industry at least one week before they are first advertised and clearance sales under item 2 of the first sentence of subsection (1) and under subsection (2) at least two weeks before they are first advertised. The declaration shall contain
1. the reason for the clearance sale;
2. the beginning, end and place of the clearance sale;
3. the type, quality and quantity of goods to be cleared;
4. in the event of a clearance sale under item 2 of subsection (1), the designation of the sales area concerned by the building project;
5. in the event of a clearance sale under subsection (2), the duration of conduct of the business undertaking.
Documentary evidence of the facts constituting the reasons for the clearance sale shall accompany the declaration together with, in the case of a clearance sale under item 2 of subsection (1), a confirmation from the building authority as to the admissibility of the building project.
(4) The official professional representative bodies for trade, craft and industry and the agents appointed by them shall be authorized to verify the information. To that end, they may enter the business premises of the organizer during his hours of business. Each of them shall be entitled to inspect the files and to make duplicates or photocopies.
(5) Any person may be enjoined from advertising or conducting the entire clearance sale if he
1. fails to comply with subsections (1) to (4);
2. places on sale goods that have been acquired solely for the clearance sale (goods specially acquired or replenished).
(6) Any person may further be enjoined therefrom if he
1. has abusively engineered the grounds for the clearance sale or has in some other way made abusive use of the possibilities for a clearance sale;
2. indirectly or directly continues the business undertaking of which the closure was announced or, as the organizer of the clearance sale, begins dealing with goods of the type concerned within a period of two years in the same locality or in neighboring localities, unless there exist special circumstances to justify continuation or assumption of business;
3. in the case of a clearance sale under item 2 of subsection (1), continues trading on the sales area concerned before the declared building project has been completely terminated.
[Amended by Law of July 25, 1986]
9. [Repealed by Law of July 25, 1986]
9a. [Repealed by Law of July 25, 1986]
10. [Repealed by Law of July 25, 1986]
11. [Repealed by Law of July 25, 1986]
12. [Deleted by Law of August 13, 1997]
13.-(1) Any person who acts in violation of Sections 4, 6 or 6c may be enjoined from so doing.
(2) In the cases under Sections 1, 3, 4, 6 to 6c, 7 and 8, the injunction may be applied for
1. by traders who deal in goods or commercial services of the same or related type on the same market where the claim concerns an act that is liable to significantly impair competition on that market;
2. by associations for the promotion of commercial interests having legal personality where their members comprise a significant number of traders who deal in goods or commercial services of the same or related type on the same market, and where they are in a position with regard to their staff, technical and financial facilities, to assume in practice their statutory tasks for the promotion of commercial interests and to the extent that the claim concerns an act that is liable to significantly impair competition on that market;
3. by associations having legal personality and whose statutory tasks include the defense of the interests of consumers through information and advice. In the case under Section 1, such associations may only apply for an injunction if their claim concerns an act that affects the significant interests of consumers;
4. by Chambers of Industry and Trade or by Craft Chambers.
(3) [Deleted by Law of August 13, 1997]
(4) If the cases of violation referred to in subsection (2) are committed in a business undertaking by an employee or an agent, the application for injunction shall also apply against the proprietor of the business.
(5) An injunction may not be applied for if, with respect to the full circumstances, its assertion is abusive, particularly if its predominant aim is to generate a claim to compensation for expenses or costs of legal procedure against the person who has committed the violation.
(6) Compensation shall be awarded for damages incurred as a result of the violations against
1. any person, in the case under Section 3, who knew or should have known that the statements made by him were misleading. A claim for damages may only be asserted against journalists, publishers, printers or distributors of periodical printed matter, if they knew that the statements made by them were misleading;
2. any person who intentionally or negligently violates Sections 6 to 6c, 7 or 8.
[Amended by Laws of July 25, 1986, July 25, 1994 and August 13, 1997]
13a.-(1) A purchaser who has been induced to make a purchase by untrue advertising statements, that are misleading within the meaning of Section 4 for those persons towards whom the advertising is directed and are significant with respect to the conclusion of contracts, shall be entitled to withdraw from the contract. Where the advertising containing such statement originates from a third party, the purchaser shall be entitled to withdraw only if the other contracting party knew or should have known that the statement was untrue and that it was liable to mislead or has itself adopted the advertising containing that statement in its own actions.
(2) Withdrawal shall be declared without delay to the other contracting party once the purchaser has obtained knowledge of the circumstances that justify his right of withdrawal. The right of withdrawal shall lapse if withdrawal is not declared within six months of the conclusion of the contract. This right may not be waived in advance.
(3) The consequences of withdrawal shall be governed, in the case of movables, by Section 3(1), (3) and (4) and by Section 5(3), first sentence, of the Law on Withdrawal from Doorstep Sales and Similar Transactions [Gesetz über den Widerruf von Haustürgeschäften und ähnlichen Geschäften]. The assertion of any further prejudice shall not be excluded. Where the advertising originates from a third party, that party alone shall be liable for any prejudice arising from the withdrawal of the purchaser in the relationship between the other contracting party and the third party, unless the other contracting party knew of the violation.
[Added by Law of July 25, 1986 and amended by Law of December 17, 1990]
14.-(1) Any person who for the purposes of competition makes or spreads assertions concerning the gainful business of another person, concerning the person of the proprietor or director of the business, concerning the goods or commercial services of another person, that are liable to damage the operation of the business or the credit of its proprietor, shall be liable, if the facts are not proven to be true, to compensate the injured party for the prejudice thus caused. The injured party may also apply for an injunction against the making or spreading of such assertions.
(2) In the case of confidential communications, where the person making or the person receiving the communication has a justified interest therein, an application for an injunction shall only be admissible if the facts asserted or spread are untrue. A claim to damages may only be asserted if the person making the communication knew or should have known that the facts were incorrect.
(3) The provision in Section 13(4) shall apply mutatis mutandis.
[Amended by Law of July 25, 1986]
15.-(1) Any person who against his better knowledge makes or spreads assertions concerning the gainful business of another person, concerning the person of the proprietor or director of the business, concerning the goods or commercial performances of another person that are untrue and that are liable to damage the operation of the business shall be liable to imprisonment of up to one year or a fine.
(2) If the facts referred to in subsection (1) are asserted or spread in a business undertaking by an employee or agent, the proprietor of the business shall be liable, in addition to his employee or agent, if the act occurred with his knowledge.
16. [Repealed by Law of October 25, 1994]
17.-(1) Any employee, workman or apprentice of a business undertaking who, during the duration of his employment relationship, communicates a trade or industrial secret that has been entrusted to him or has become accessible to him by reason of his employment relationship, without authorization to any person for the purposes of competition, for personal gain, for the benefit of any third party or with the intention of causing prejudice to the proprietor of the business undertaking, shall be liable to imprisonment of up to three years or to a fine.
(2) Likewise, any person who for the purposes of competition, for personal gain, for the benefit of a third party or with the intention of causing a prejudice to the proprietor of the business undertaking
1. obtains or secures without authorization through
(a) the use of technical means;
(b) the manufacture of an embodied reproduction of the secret; or
(c) the removal of an object in which the secret is embodied; or
2. exploits or communicates to another person, without authorization, a business or industrial secret that he has acquired or in some other way, without authorization, obtained or secured through a communication as referred to in subsection (1) or through his own or another's act under item 1,
shall be liable to the same penalty.
(3) The attempt to commit such act shall be punishable.
(4) In particularly serious cases, the penalty shall be imprisonment of up to five years or a fine. A particularly serious case shall normally be a case in which the person committing the act knows when making the communication that the secret is to be exploited abroad or if he himself exploits it abroad.
[Amended by Law of May 15, 1986]
18. Any person who, for the purposes of competition or for personal gain, exploits without authorization or communicates to another person documents or instructions of a technical nature, particularly drawings, models, patterns, sections or methods that have been entrusted to him in the course of business shall be liable to imprisonment of up to two years or a fine.
[Amended by Law of May 15, 1986]
19. Any person who acts in violation of the provisions of Sections 17 and 18 shall also be liable for compensation of the damage caused. Where there is more than one person liable, they shall be jointly and severally liable.
20.-(1) Any person who for the purposes of competition or for personal gain seeks to induce another person to commit an offense under Section 17 or 18 or who accepts the proposal of another person to commit such offense shall be liable to imprisonment of up to two years or a fine.
(2) Likewise, any person who for the purposes of competition or for personal gain proposes himself for the committing of an offense under Section 17 or 18 or declares his willingness to commit such offense at the instigation of another person shall be liable to the same punishment.
(3) Section 31 of the Criminal Code [Strafgesetzbuch] shall apply mutatis mutandis.
[Amended by Law of May 15, 1986]
20a. In the case of offenses under Sections 17, 18 and 20, Section 5, item 7 of the Criminal Code shall apply mutatis mutandis.
21.-(1) The claims subsisting under this Law for injunction or damages shall be prescribed six months after the time at which the person entitled to claim has obtained knowledge of the act and of the person liable or three years after the committing of the act irrespective of knowledge thereof.
(2) The prescription period for claims to damages shall not begin prior to the time at which the damage occurs.
22.-(1) With the exception of the cases referred to in Sections 4 and 6c, proceedings shall be instituted upon complaint only. This shall not apply in the cases under Sections 17, 18 and 20 if the criminal prosecuting authority considers that ex officio prosecution is called for in view of a particular public interest in prosecution.
(2) In addition to the injured party (Section 374(1) item 7 of the Code of Criminal Procedure [Strafprozessordnung]), any of the traders, associations or chambers referred to in Section 13(2), items 1, 2 and 4, shall have the right to lodge a private complaint in respect of an offense under Sections 4 and 6c.
[Amended by Laws of May 15, 1986, October 22, 1987 and August 13, 1997]
23.-(1) Where the sentence in cases under Section 15 imposes punishment, the injured party may request that publication of the judgment be ordered.
(2) If action for an injunction is instituted on the basis of one of the provisions of this Law, the successful party may be granted authorization in the judgment to publish the enacting part of the judgment within a certain period of time at the expense of the losing party.
(3) The nature of the publication shall be determined in the judgment.
23a. The value in dispute in actions for cesssation of acts in violation of Sections 1, 3, 4, 6, 6a to 6c, 7 and 8 may be assessed at a lower level if the matter is simple with regard to its nature and scope or if the financial situation and income of one of the parties makes it unreasonable for that party to bear the cost of proceedings in accordance with the full value in dispute.
[Added by Law of July 25, 1986 and amended by Law of July 25, 1994]
23b.-(1) If a party to a civil dispute in which a complaint was filed under this Law is able to show convincingly that the burden of the costs of the proceedings in the full value in dispute would seriously jeopardize his economic situation, the court may order, on request, that such party be required to pay court costs determined on that part of the value in dispute that is commensurate with such party's economic situation. The court may subject its order to the condition that such party also show convincingly that the costs of the dispute to be borne by that party will be borne neither directly nor indirectly by a third person. The effect of such order shall also be that the party awarded a reduction shall also be required to pay the fees of its lawyer only with respect to that part of the value in dispute. Where the legal costs are imposed on that party or if that party assumes those costs, it shall only be required to reimburse the court fees paid by the opponent and the fees of that party's lawyer in accordance with that part of the value in dispute. If the out-of-court costs are imposed on the opponent or are assumed by that party, the lawyer for the party awarded the reduction may recover his fees from the opponent on the basis of the value in dispute applicable to the opponent.
(2) A petition under subsection (1) may be declared to the registry of the court for recording. It shall be filed prior to the trial on merits. It shall only be admissible subsequently if the value in dispute that has been accepted or determined is subsequently increased by the court. The opponent shall be heard before a decision is taken on the petition.
[Amended by Law of July 25, 1986]
24.-(1) For actions brought under this Law, jurisdiction shall belong to the court in whose district the defendant has his business establishment or, lacking such establishment, his place of residence. For persons who have neither a commercial establishment nor a place of residence in Germany, jurisdiction shall belong to the court of the place of stay in Germany.
(2) For actions brought under this Law, jurisdiction shall further lie exclusively with the court in the district of which the act has been carried out. The first sentence shall apply to actions instituted by the traders, associations or chambers referred to in Section 13(2), items 1 to 4, in those cases only where the defendant has no place of residence in Germany.
[Amended by Law of July 25, 1994]
25. In order to preserve rights to an injunction under this Law, preliminary injunctions may be issued even where the requirements set out in Sections 935 and 940 of the Code of Civil Procedure [Zivilprozessordnung] do not obtain.
26. [Repealed]
27.-(1) Civil disputes in which a claim under this Law is asserted shall be heard, where the Provincial Courts have jurisdiction in the first instance, by the commercial litigation chambers; this shall not apply to disputes in which a final consumer asserts a claim under Section 13a not arising from a mutual commercial transaction under Section 95(1), item 1, of the Judiciary Law [Gerichtsverfassungsgesetz].
(2) The Governments of the Länder shall have power to allot by statutory order competition litigation for the areas of several Provincial Courts to one such Court where this is expedient with regard to procedure in competition disputes, particularly to ensure uniform jurisprudence. The Governments of the Länder may delegate these powers to the Provincial Judicial Administrations.
(3) The parties may also be represented in court in competition litigation by attorneys-at-law admitted to practice in the court before which the action would have been heard in the absence of the ruling under subsection (2). The same shall apply to representation before the Court of Appeal.1
(4) Any additional costs incurred by a party due to representation under subsection (3) by an attorney-at-law not admitted to practice in the court hearing the case shall not be refunded.
[Amended by Law of July 25, 1986]
27a.-(1) The Governments of the Länder shall set up Mediation Boards at the Chambers of Industry and Trade for settling civil disputes in which claims are asserted on the basis of this Law (Mediation Boards).
(2) The Mediation Boards shall comprise, when petitioned by a final consumer or by one of the consumer associations referred to in Section 13(2), item 3, a legal member, qualified for the office of judge under the German Law on Judges [Deutsches Richtergesetz], as Chairman and an equal number of traders and consumers as assessors, and shall comprise in all other cases a Chairman and at least two expert traders as assessors. The Chairman shall be experienced in the field of competition law. The assessors shall be appointed by the Chairman for each dispute from a list to be drawn up yearly for each calendar year. The appointments shall be made in agreement with the parties. Sections 41 to 43 and 44(2) to (4) of the Code of Civil Procedure shall apply mutatis mutandis to the exclusion or rejection of members of a Mediation Board. Petitions for rejection shall be decided by the Provincial Court with jurisdiction for the seat of the Mediation Board (commercial litigation chamber or, failing that, the civil chamber).
(3) Any party to a civil dispute under Sections 13 and 13a may apply to the Mediation Boards to conduct an exchange of views on the dispute with the opponent where the acts of competition concern business dealings with the final consumer. In other civil disputes under Sections 13 and 13a, the Mediation Boards may be applied to if the opponent consents.
(4) Section 24 shall apply mutatis mutandis to the competence of the Mediation Boards.
(5) The Chairman of the Mediation Board may order the parties to appear in person. The Mediation Board may impose a fine on any party not appearing without having been excused. Immediate appeal under the provisions of the Code of Civil Procedure against the order to appear in person and against the determination of the fine shall lie to the Provincial Court (commercial litigation chamber or, failing that, the civil chamber) with jurisdiction for the seat of the Mediation Board.
(6) The Mediation Board shall endeavor to reach an amicable agreement. It may make a written, justified settlement proposal to the parties. The settlement proposal and its grounds may only be published with the consent of the parties.
(7) If a settlement is reached, it shall be required to be recorded in a separate document and, under the date on which it was reached, be signed by the members of the Mediation Board who took part in the proceedings and by the parties. A settlement reached before the Mediation Board shall be subject to compulsory enforcement; Section 797a of the Code of Civil Procedure shall apply mutatis mutandis.
(8) The Mediation Board may refuse to initiate settlement discussions if it considers the claim that has been asserted to be unfounded from the onset or if it holds that it does not have jurisdiction.
(9) Application to the Mediation Board shall interrupt prescription in the same manner as the institution of proceedings. The interruption shall continue until completion of proceedings before the Mediation Board. If no settlement is reached, the time at which proceedings are ended shall be laid down by the Mediation Board. That time shall be communicated by the Chairman to the parties. If the application to the Mediation Board is withdrawn, the interruption of prescription shall be deemed not to have occurred.
(10) If proceedings have been instituted in a legal dispute of the type referred to in the first sentence of subsection (3) without the dispute having been brought to the Mediation Board beforehand, the court may, at the request of the parties, set a new date for the hearing and instruct the parties to bring the matter prior to that date before the Mediation Board in order to seek an amicable settlement. In proceedings for the issue of a preliminary injunction, such order shall be permissible only with the consent of the opponent. Subsection (8) shall not be applied. If proceedings have been brought before the Mediation Board, no petition by the opponent for a declaratory statement that the claim that has been asserted is not valid shall be admissible if made after the matter has been brought before the Mediation Board.
(11) The Governments of the Länder shall be authorized to issue the necessary regulations for the implementation of the above provisions and for regulating the procedure before the Mediation Boards, in particular with regard to supervision of the Mediation Boards, concerning their composition, with appropriate participation by traders not belonging to the Chambers of Industry and Commerce (Section 2(2) to (6) of the Law to Provisionally Regulate the Law of Chambers of Industry and Commerce [Gesetz zur vorläufigen Regelung des Rechts der Industrie- und Handelskannern] of December 18, 1956, Bundesgesetzblatt I, page 920) and concerning the enforcement of fines and provisions on the charging of costs by the Mediation Board. The composition of the Mediation Boards shall take into account the proposals made to determine the consumers referred to in the first sentence of subsection (2) made by the consumer centers established for each Federal Land with public funding.
[Amended by Law of July 25, 1986]
28. [Repealed by Law of October 25, 1994]
29. [Repealed by Law of July 25, 1986]
30.-(1) This Law shall enter into force on October 1, 1909.
(2) At the same time, the Act on the Repression of Unfair Competition dated May 27, 1896 (Official Journal, p. 145) shall cease to be in force.
* German title: Gesetz gegen den unlauteren Wettbewerb.
** Consolidated text of April 1, 1975 as amended by Laws of May 15, 1986, July 25, 1986, October 22, 1987, March 7, 1990, December 17, 1990, July 25, 1994, September 2, 1994, October 5, 1994, October 25, 1994, August 13, 1997 and June 22, 1998.
Entry into force (of last amending Law): July 1, 1998.
Source: Communication from the German authorities.
Note: English translation furnished by the national authorities and edited by the International Bureau of WIPO.
1 This subsection, as amended by the Law of September 2, 1994, will read as follows:
"(3) Where an appeal is lodged against the decision of the court acting in competition litigation, the parties may also be represented before the Court of Appeal by attorneys-at-law admitted to practice in the Provincial High Court before which the appeal would have been heard in the absence of a ruling under subsection (2).
[Amended by Law of September 2, 1994]"
It will enter into force on January 1, 2000, for the following Länder of Germany: Baden-Württemberg, Bavaria, Berlin, Bremen, Hamburg, Hesse, Lower Saxony, North Rhine-Westphalia, Rhineland-Palatinate, Saarland and Schleswig-Holstein; it will enter into force on January 1, 2005, for the other Länder (Editor's note).