November 2007

In one of its recent decisions, the Austrian Supreme Court clarified certain aspects of the legitimacy of addressing warning letters to employees. In the case to be decided, an interim injunction was granted to the defendant against the "Sales Manager Austria" of the claimant. As the claimant had no place of business in Austria, but continued to sell infringing coffee machines via its Austrian distributors, the defendant felt impelled to warn the employees of the claimant who were actively participating in the distribution of the infringing coffee machines in Austria that also a complice or assistant is liable for patent infringement.

In view of the claimant the warning letter was wrong, degrading and based on an unfair business practice. It was especially argued that also criminal liability for the employees was threatened although this is excluded according to Sec. 159 (4) Austrian Patent Act. According to this exemption clause, employees are not liable if it could not have been expected from them to refuse the commitment of the infringing act because of their economic dependency on their employer.

The Austrian Supreme Court found that a violation of § 1 of the Law against Unfair Competition may be provided if a competitior causes employees of another company to act based on unjustified threats, i.e. if there was no legal basis for the threats against the employer. However, in the present case, there existed an enforceable interim injunction against the employer. Accordingly, the Supreme Court found that it is not an unfair practice if a competitor - who is in hold of an enforceable title - threats employees in leading or managing positions of another undertaking with legal proceedings as long as the claims asserted are not bared from the outset. With regard to the exemption clause for criminal liability of employees, the Supreme Court found that in the warning letter criminal sanctions were only explained with respect to the "Sales Manager Austria" but no threats were directed against the addressees of the warning letter. Thus, the Supreme Court did not answer under what specific circumstances an employee may refuse the commitment of the infringing acts due to is economic dependency on its employer.

Dr. Rainer Beetz, LL.M.