A cease and desist letter is a letter which sets out an individual’s or company’s intellectual property rights and instructs you to cease and desist from using those rights while threatening legal action.
“Cease and desist” means to stop doing something and not resume doing it in the future.
The letter might include a list of additional demands (for example, that you change your brand name, destroy any offending products or pay damages), along with a deadline for compliance with those demands. It will often ask you to sign a set of undertakings confirming that you agree to comply with the demands.
So, you’ve received a cease and desist letter. IP associate Bryony Gold explains what to do next.
- Stay calm
It is important not to panic. Keep in mind that not all claims in cease and desist letters are well founded or justified. Additionally, whilst they are often the first step in bringing an IP claim, receiving one doesn’t necessarily mean things will end up in court – often senders want their issue to be resolved out of court and may be reluctant to take things further. Do not act in haste by replying to the letter before legal advice has been obtained. Professional advice is always required to determine your best options.
- Don’t bury your head in the sand
It is rarely advisable to ignore a cease and desist letter. Doing so may result in costly litigation. If you need more time to seek professional advice in order to consider the issues, it can be a good idea to state this in a short holding email or letter (whilst remembering not to respond to any of the sender’s points at this stage). Always be polite and courteous, and avoid any emotional reactions, no matter how intimidated or aggrieved you may feel.
- Contact an IP lawyer for help
These types of letters and responses are often written using legal terminology that can be misinterpreted if you do not have specialist IP legal training, so it is important to seek advice from an IP lawyer at the earliest possible opportunity. Your IP lawyer will help to evaluate the letter to determine:
- who the sender is;
- whether they actually do have the intellectual property rights they claim to have;
- the validity of those rights and the strength of their allegations;
- whether you have any reasonable defences to the allegations;
- how likely any claim based on those allegations would be to succeed if it went to court; and
- the financial and commercial consequences of this to you.
- Assess your options
In order to properly assess your options, you should first decide how you feel about the sender’s requests. It may be that the sender is asking you to do something that you are happy to do, or that would cause limited risk to your business.For example, it may be that changing a product’s branding will not significantly impact on your business if you have not heavily invested in that branding, or that you can easily switch to using alternative technology which is not covered by the sender’s IP rights.If you are happy to agree to the sender’s requests, you can do so (being careful to ensure you do not admit liability). If possible, it is advisable to record this in a formal settlement agreement.An alternative option is to respond to dismiss their allegations and set out any defence. However, there is then a risk that the sender will then simply push ahead with court action (as is the case if you were to ignore the letter).
Another option is to respond with a counterproposal – perhaps agreeing to some but not all of the sender’s requests.
Your IP lawyer will assist you in determining the best option in light of your commercial aims, ensuring that any response is appropriately drafted and does not prejudice your position. They can also help to formalise any settlement that may result.
Where the letter relates to technology or materials which you have obtained from a supplier, your IP lawyer can also help you to understand the scope of any IP infringement indemnities in your supply agreement and what you need to do to benefit from them.