IP cease-and-desist letters: between avoiding litigation and the practice of issuing cease-and-desist letters – what the new Section 7a of the UWG contributes to this

Warning letters generally serve a useful purpose in intellectual property and competition law: they make it possible to put an end to infringements quickly, cost-effectively and without the need for court proceedings. However, where warning letters are used primarily as a source of income, a means of exerting pressure or a business model, the aim of avoiding litigation turns into ‘abuse of warning letters’.
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From 27 September 2026, the new Section 7a of the Unfair Competition Act (UWG) is intended to draw a line here: anyone who issues an abusive warning letter may be required to cease such conduct and, where at fault, may also be liable for damages. Furthermore, the right to reimbursement of the costs of the warning letter will no longer apply.

However, the legal requirements are remarkably narrow. According to the wording, an abuse of rights only exists if (i) a large number of warning letters with very similar content are issued, (ii) if an amicable settlement is rejected, no legal proceedings – or only a few in relation to the number of warning letters – follow, and (iii) the warning letters serve primarily to generate financial gain, without any specific intention to combat the alleged infringements. Thus, Section 7a of the Unfair Competition Act (UWG) does not merely cover an abusive warning letter. Rather, it requires the existence of an entire warning system, the internal workings of which the recipient would have to prove. This is difficult in practice: how is an individual recipient supposed to know that?!

Does this mean that all other warning letters are permitted?

Section 7a of the Unfair Competition Act (UWG) describes a specific form of abuse of warning letters, which is now expressly regulated. However, no reverse conclusion should be drawn from this to the effect that any warning letter would be permissible as soon as just one of the three criteria is not met. A warning letter may still be unlawful on other grounds, for example because it (a) contains untrue or defamatory factual allegations, (b) presents an infringement that does not in fact exist as having been proven, (c) misleads as to the validity or scope of a property right, (d) exerts disproportionate pressure, (e) combines payment demands that are not objectively justified with a short deadline, or (f) constitutes an unfair commercial practice in its own right.

In the case of unjustified warnings regarding intellectual property rights, Section 7 of the Unfair Competition Act (UWG) is particularly relevant where false, reputation-damaging facts about a company are disseminated to third parties.

A new deterrent with its own risk of misuse

A real-life case also illustrates the other side of the coin: a company based far from Vienna received a warning letter from a competitor in Vienna regarding an alleged online infringement. In response, the new Section 7a of the Unfair Competition Act (UWG) was invoked, and suspicions were raised that this was part of a wider series of warning letters. No specific information was available regarding the total number of similar letters, the proportion of cases that subsequently led to legal action, or the financial motivation of the party issuing the warning. The Viennese party found the situation too risky and dropped the claims.

This illustrates that Section 7a of the Unfair Competition Act (UWG) can serve as a means of defence, but may also be used prematurely as an argument in a counter-warning – which is surely not its intended purpose!

As a result, Section 7a of the Unfair Competition Act (UWG) could even inadvertently contribute to a situation where those receiving legitimate warnings fail to comply with them, but instead accuse the issuers of ‘abuse of warning letters’ or use this as a defence.