Cease-and-desist letters: Choosing the right first move

When a brand owner or business identifies unauthorised use of its intellectual property by a third-party, the instinct is often to send a firmly worded cease-and-desist letter demanding that they stop the infringing activity immediately.

Sometimes this can be exactly the right approach. But a well-written letter can do more than simply putting the infringer “on notice” of your rights. It can strengthen your position, allow for a commercial and amicable resolution and can even help avoid litigation altogether.

The question is not simply whether to send a cease-and-desist letter but often what you are trying to achieve by sending a letter. 

What is a cease-and-desist letter? #

A cease-and-desist letter is a formal correspondence highlighting your intellectual property rights, asserting that a third-party’s unauthorised activities may be infringing those rights and asking them to stop the activities and/or comply with certain demands to resolve the matter.

Your “rights” may refer to several registered or unregistered rights including trade marks, patents, designs, copyrights or other IP rights. 

A letter will usually include:

• The relevant IP rights;
• The “unauthorised” activity that is allegedly infringing those IP rights and statements on why the rights holder is concerned by such activity;
• Proposed next steps that may include providing undertakings, ceasing the activity or any other appropriate action to rectify the issue; and
• A time frame for responding/taking the proposed action.

As cease-and-desist letters lay down the foundation for litigation and are subject to pre-action protocols, it is crucial to carefully consider the wording used. 

Define your objective before sending a cease-and-desist letter #

A cease-and-desist letter is usually the first step in a broader litigation strategy, so it is important to think about the objective you are trying to achieve. For example, consider whether the objective is to:

• Stop use of a trade mark or other IP right;
• Remove infringing material from a website or other online platform;
• Transfer rights of an infringing domain name;
• Prevent launch of an infringing product;
• Obtain undertakings against future infringement;
• Resolve the matter amicably; or 
• Formally notify the other side before commencing proceedings.

Depending on the objective, the approach can vary significantly. 

Choosing the right tone: why a softer approach can be more effective #

You do not need to escalate a dispute prematurely to assert your rights properly. There is no “one size fits all” approach, and in most cases, the “best” letter is rarely the most aggressive.

A friendly approach may help resolve the matter without escalation. A recipient who has been given a route to resolve matters amicably may be more willing to engage than one who receives an extensive list of demands and threat of imminent proceedings.

Before sending a formal cease-and-desist letter, it is worth considering whether a more toned-down letter may help achieve a quicker and more commercially sensible result.

For example, if your objective is to resolve the matter quickly and explore amicable resolution, a “without prejudice” letter may be more suitable. In some cases, this can be more effective than a formal cease-and-desist letter, particularly where parties already have an existing commercial relationship or the other side is genuinely acting in good faith and was not aware of your rights.

As litigation is expensive and time-consuming, a less confrontational approach can be appealing to both parties involved. If the recipient agrees to amend branding or limit/stop its allegedly “infringing” activity, the matter can be resolved without incurring the substantial costs of formal proceedings.

But this does not mean that this approach should be taken in all cases. If for instance, you are dealing with a bad faith actor a formal cease-and-desist letter may be more well-suited. Ultimately the tone and structure of your first letter to the recipient depends on the outcome you are trying to achieve.

An experienced IP professional can help you understand the strengths and weaknesses of your case and advise whether the matter requires immediate escalation, or whether a “without prejudice” correspondence is the best course of action. 

What remedies can a cease-and-desist letter ask for? #

The remedy or corrective action claimed in a cease-and-desist letter will depend on the rights involved and the nature of infringing activity.

Potential “demands” may include:

• Stopping the “infringing” activity: This could involve removing all unauthorised references to a trade mark including removing material from a website/product or stopping sale of a particular product bearing the trade mark.
• Transferring domain name or any other asset: The right holder could seek a transfer of a domain or any other product/asset bearing the trade mark or any other IP right.
• Providing undertakings: In most cases, the rights holder will seek written undertakings that the “infringer” will not repeat similar unauthorised conduct in the future.
• Compensation: Depending on the extent of “infringement”, rights holder may consider a claim for damages, account of profits or recovery of legal costs. A rights holder may also seek that the “infringer” provides detailed accounts about the extent of use and sales.
• Infringing goods: Depending on the product involved, the rights holder may also seek delivery up or destruction of “infringing” product bearing the trade mark.

The list of remedy claimed in the letter will again depend on the objective. The list of remedies referred to above is not exhaustive. 

What should you consider before sending a cease-and-desist letter? #

Before putting the alleged “infringer” on notice, it is important to understand the strength and scope of the rights being asserted.

From a trade marks perspective, this could include an assessment of:

• Registered trade mark rights being relied upon;
• Whether the registrations are vulnerable to a challenge;
• The nature and extent of unauthorised use;
• The similarity between the marks and goods/services;
• The likelihood of confusion in the marketplace;
• Whether there are any other actions available such as “passing off”;
• Whether there are any earlier rights or other defences available to the “infringer”.

If formal proceedings are being considered, it is sensible to collate evidence early. There is a risk that the other side may change or remove the “infringing” material after receiving the letter, so it is important to preserve screenshots of infringing websites, advertisements, product packaging or any other relevant material before sending the letter.

“Unjustified threat”: Wording a cease-and-desist letter safely #

A formal cease-and-desist letter is a pre-action correspondence and can be particularly important if the matter then proceeds to litigation. It is important to be very precise and accurate about the wording used.

The rights holder should avoid overstating their case or making claims that may be difficult to establish. The letter should carefully refer to what is established (for instance, a reference to registered rights versus what is alleged for instance, the “infringing” conduct) and the letter should maintain a measured tone and avoid unnecessarily inflammatory language.

An overly aggressive letter threatening infringement proceedings may expose the sender to a claim of “unjustified threat”. Specific provisions of the Trade Marks and Patents Act and Intellectual Property (Unjustified Threats) Act 2017 allow “person aggrieved” to claim certain remedies like declaration or damages where a threat is unjustified.

Similar provisions also apply in other territories like Germany. This is another reason why sending a boilerplate template letter without considering the merits of the case is not recommended. 

What should I do if I have received a cease-and-desist letter? #

Receiving a cease-and-desist letter does not automatically mean that infringement has already been established. It does however “start the clock” as the rights holder is now aware of your presence and may monitor your conduct and consider escalating the matter.

It is strongly advisable to consult an IP specialist before responding substantively. The response does not need to be an admission or denial of allegations. The most appropriate strategy will depend on the exposure to risks. 

It may be worth responding firmly where you have available defence or there is no arguable “infringement”. On the other hand, if the cost of rebranding is minimal compared to potential cost of defending an infringement action, a coexistence agreement or undertakings may be commercially sound.

An experienced IP specialist can assess the strength and weaknesses of your case and advise on the best approach for the response. 

Murgitroyd: in your corner for rights disputes #

Have you received a cease and desist letter? Or are you considering their use to defend your IP? You should seek legal advice at the earliest possible opportunity.

Timely advice from an IP professional can help you to put a clear strategy in place.

Our trade marks, patents, designs and copyright experts have significant experience helping clients to navigate pre-litigation disputes, quickly and cost effectively.

Talk to us today.