The ex parte measure as a revenue model under German law

What is happening?

Particularly in the fashion industry, but also beyond, businesses are increasingly receiving cease-and-desist letters from (often German) trade mark holders claiming that their trade mark rights are being infringed. So far, nothing unusual: trade mark enforcement is a legitimate instrument, and the trade mark holders in question do generally hold valid trade mark rights in Germany and/or the European Union.

What complicates matters, however, are the follow-up steps that appear to be developing into a revenue model under German law.

In the Netherlands, it is common legal practice to respond in writing to a cease-and-desist letter regarding the alleged infringement of intellectual property rights. This is typically done through an intellectual property (IP) lawyer. This results in an exchange of legal arguments between the trade mark holder and the alleged infringer, and in most cases the parties may reach an amicable settlement. If not, the dispute may be submitted to the court.

In manifest IP infringement cases causing clear damage, the IP right holder will not want to wait for what may be a lengthy back-and-forth exchange of correspondence. For such situations, the IP right holder has an additional tool at its disposal: the ex parte measure.

The ex parte measure: a procedure without hearing the alleged infringer

What is an ex parte measure? The ex parte measure is a swift, unilateral judicial measure (often an injunction) imposed without the alleged infringer being heard by the court in advance. The rationale behind this instrument is reasonable: in events of acute and irreversible damage caused by IP infringement, rapid intervention must be possible. Consider, for example, a counterfeit beverage that is sold in supermarkets. That involves not only a trade mark infringement but also a potential public health risk. The trade mark holder naturally wants the counterfeit product removed as quickly as possible, before its brand becomes associated with the counterfeit goods.

The ex parte measure derives from the European Enforcement Directive of 2004 (“Directive”). Article 9(1) of the Directive provides for both the ex parte injunction and ex parte seizure. In the Netherlands, these ex parte measures have been implemented in Title 15 of the Code of Civil Procedure, specifically Articles 1019e Rv (injunction), 1019b and 1019c Rv (provisional seizure).

To obtain an ex parte injunction in the Netherlands, the trade mark holder must adequately substantiate both urgency and irreparable harm. This is, after all, a measure that runs counter to the fundamental right to a fair trial — a right of which the opportunity to be heard forms an indispensable element. As a result, Dutch courts do not generally grant ex parte measures lightly. How different this situation appears to be in Germany…

In Germany, the ex parte measure appears to be (structurally) deployed as a kind of revenue model, rather than as an emergency enforcement tool. I will illustrate this through a practical case study in which the brand names are fictitious.

What happened in this German case study?

A Dutch fashion company (referred to here as “PI Boutique”) designs, produces and sells clothing under the name “PI”. PI Boutique operates two physical stores in the heart of Amsterdam and an online shop, and focuses exclusively, or at least primarily, on the Dutch market. Each season, PI Boutique releases, among other things, knitwear bearing words or phrases that also contain the letters “PI”, such as PICNIQUE, PIKET, PIJL, or PIT.

One day, PI Boutique receives a cease-and-desist letter in German from a German lawyer acting on behalf of a German company that claims to be the holder of the word mark PIT, registered inter alia in Germany for clothing. PI Boutique is demanded to immediately cease use of the sweater bearing the word ‘PIT’ and to discontinue offering the garments for sale.

PI Boutique, through its lawyer, rejects the claim and sets out substantiated grounds for why there is no infringement. The word in question is a common, weakly distinctive term with limited inherent distinctiveness and a narrow scope of protection. Furthermore, use of the sign on the sweater is purely decorative and ornamental, which is not uncommon in the fashion industry. PI Boutique disputes that any likelihood of confusion exists among the public. While the names are admittedly similar, the context of use effectively precludes any trade mark confusion. The relevant public would not perceive the designation as an indication of trade origin.

Communication then ceases. Four weeks later, PI Boutique receives, by registered post, a court order imposing a prohibition on further use of the designation on the sweater in Germany, subject to penalty payments. PI Boutique is also ordered to pay the procedural costs and to compensate the damage suffered.

PI Boutique is then faced with a choice: accept the order and pay, or lodge an objection and pursue substantive proceedings before the German court to have the measure set aside. The latter, however, means: instructing a German lawyer, litigating in a foreign language under German law, with all the uncertainty, time and cost that entails.

For most businesses — and certainly for small and medium-sized enterprises (SMEs) — the latter option is simply not a realistic choice in practice. The costs and uncertainty far outweigh the amount initially awarded (typically between € 3,000–5,000, based on the most common German court orders in 2026). Paying up is, from an economic point of view, the most rational decision — even if it feels like a legal injustice. And that is precisely why this revenue model works.

Abuse of the ex parte measure?

Trade mark law exists to prevent consumer confusion as to the origin of goods and services. In my view, the case study described above reveals the following vulnerabilities:

First, the ex parte measure is designed for exceptional and clear-cut IP infringement situations in which urgency and irreparable harm are defining features. When a court applies this instrument with a relatively low threshold in cases where there is no urgency or irreversible harm, a revenue model is effectively created and perpetuated.

Second, the cross-border barrier. Litigating abroad is a costly undertaking for most businesses. This is compounded by the fact that German procedural law appears to differ significantly from Dutch procedural law — a difference that seems to be deliberately exploited here.

International rules generally allow intellectual property rights to be enforced in the country where infringement occurs or is threatened. A deliberate choice of Germany — even where the defendant has no economic presence there — is therefore possible. It is also common for claimants to explicitly invoke a national German trade mark registration as the basis for the infringement claim.

Third, it may be argued that the word “PIT” is a fairly common word with weak inherent distinctiveness, which is unlikely to be perceived as an indication of origin. As such, I consider the registrability of such a word as a trade mark to be questionable at best. The same applies, in my view, to the scope of protection: even a valid trade mark registration does not automatically mean that every use of the word ‘PIT’ constitutes an infringement. Trade mark infringement requires that there be likelihood of confusion among the public: the consumer must be liable to believe that the goods or services originate from the trade mark holder or an economically linked undertaking. This is a genuine test, not a formality.

After the initial rejection of the cease-and-desist letter, the German counterparty went directly (and with a one-sided story) to the court, rather than engaging in negotiations, which is at least common practice in the Netherlands. The German party did not seek a regular legal procedure in the Netherlands, the defendant’s place of establishment, but instead pursued an ex parte measure in Germany. The result: a prohibition on sales in Germany under penalty payments, together with an order to pay procedural costs despite the fact that the commercial interest at stake is negligible, since PI Boutique does not target the German market at all. This is the economic logic underpinning the model. Paying is more rational than litigating, even when you are – in my view – legally in the right. And the party initiating this knows it full well. Consequently, in my personal view, this constitutes an abuse of procedural instruments designed to protect IP rights holders, and not as a revenue model deployed at the expense of SME’s acting entirely in good faith and within the law.

 

What to do when you receive a German cease-and-desist letter for alleged IP infringement?

Tip 1: Take a received cease-and-desist letter seriously. Failing to respond, or responding too late, is likely to result in further steps being taken, potentially leading to higher costs. Consult a lawyer or legal professional specialised in intellectual property law regarding a response.

Tip 2: Assess the trade mark registration. In which territories does the trade mark holder hold valid rights? For how long has the mark been registered? Although a descriptive or generic mark can in principle be declared invalid, German registrations of inherently ‘weak, descriptive or common’ terms may nonetheless enjoy a relatively broad scope of protection under German trade mark law if they have been registered for a considerable period of time.

Tip 3: Discuss your position with a lawyer or legal professional specialised in intellectual property law. Being legally right does not always mean winning. That feels unjust — and it is — but some legal systems operate from a different starting point or within a different framework. German courts tend to protect trade mark holders as a matter of principle, whereas in my personal experience Dutch courts apply a much more pronounced reasonableness and fairness assessment and are also more critical when it comes to granting ex parte measures.

Conclusion

Trade mark law is a powerful instrument. But power implies responsibility. The systematic use of ex parte proceedings by holders of questionable trade mark registrations — not to protect their legitimate interests, but to exert financial pressure on businesses — is a practice that runs directly counter to the objectives of IP law.

We are monitoring this development closely and are happy to advise businesses confronted with this situation on their options.