Written by William Miles | June 3, 2020
As intellectual property experts, we spend much of our time sending or responding to cease and desist letters. These letters are the first step in intellectual property (IP) claims. They set out the aggrieved party’s rights along with the various “remedies” they seek.
If you’re the recipient of a cease and desist letter and you’re wondering how to respond, or if you want to issue a letter, this post is for you. Read on to discover everything you need to consider.
A cease and desist letter is a document sent from one party to another. In the document, the sender requests that the recipient stops a particular activity, usually because it infringes upon their rights. Cease and desist letters serve as a warning that the sender intends to launch further legal proceedings if the activity does not stop.
Typically, in the context of intellectual property, the scenario is as follows:
A legal, pre-action conduct Protocol provides specific guidance on what the court expects a cease and desist letter to include. The letter should state the exact rights that Party A claims to own along with sufficient evidence of those rights. Registered intellectual property rights like trade marks and patents are easy to prove. They come with certificates that anyone can check on public registries. However, unregistered rights like copyright or unregistered designs require more work. Party A should explain who authored the work, the current owner (if different from the author), and why the IP rights subsist.
The letter should also set out the remedies that Party A is seeking. Usually, there is a demand to stop infringing activities (the main aim), destroy any remaining stock or infringing materials, provide written undertakings preventing any future infringement, pay financial damages, and pay legal costs.
Quick tip: Cease and desist letters may also be referred to as a ‘letter of claim’ or ‘letter before action’.
Yes, you will most likely need to respond to a cease and desist letter. Assuming the letter covers the above, there is a case to answer. In fact, the same Protocol which defines what a letter should include also notes that the recipient should respond in a reasonable time.
The response must confirm which parts of the claim are accepted or denied. Then, the disputing parties can work to narrow the issues and get a resolution underway (in one shape or another). The Protocol also details that parties can be subject to sanctions from the court for a failure to comply, so you must not ignore the letter.
But if you are unlucky enough to receive a cease and desist letter, don’t panic. Businesses and individuals send letters like this every day. Just because one party thinks their rights are infringed doesn’t necessarily mean they’re correct.
There may well be scope to defend the claim, so you should seek expert legal advice before responding. A defence to an intellectual property infringement claim can involve two parts, although only one needs to be successful:
In the section below, we’ll take a deeper look at the steps involved in the defence process.
The first step is to work out precisely what the allegations are. More specifically, which intellectual property rights are in issue and how they are being infringed.
When defending IP actions, it’s vital to view the claimant’s rights with a critical eye. For example, a registered trade mark could be cancelled if it has been registered for more than five years and is not in use. Or in respect of a registered design, if the design isn’t novel, then it is open for attack.
And when it comes to unregistered rights like copyright, it’s crucial to ensure that the person or entity who instructed the letter owns the rights in the first place. Frequently the author of a particular work is not the party claiming infringement, and sometimes parties fail to put in place correct legal assignments to transfer the rights.
If the rights in question are valid, the next issue to assess is the infringement itself. Intellectual property rights each have tests for infringement, and the correct test must be applied appropriately. For example, the infringement of unregistered designs requires an act of copying, whereas the infringement of a registered design doesn’t. Also, trade marks can prevent confusingly similar marks in similar classes of goods (this is quite a broad right). In contrast, copyright can only stop the reproduction of the whole or a substantial part of a work (it’s a narrow right).
Once you know how much weight the allegations against you carry and the extent of any infringing activities, it is then time to talk strategy.
Strategy plays a big part in intellectual property infringement issues and can make or break resolutions. The next step is to consider any specific defences, such as prior use for patent infringement or fair dealing for copyright infringement.
And, of course, there are broader considerations beyond the law. For example, what is the commercial reality of the infringement? Have large numbers of goods been sold or is this a small product line? How much stock remains? Who is currently selling it? What are the potential PR impacts of a dispute? And what is the claimant asking for, damages, costs or just a removal of certain goods from sale?
Finally, consideration toward settlement should be given. It could be that there is a simple fix that doesn’t need the court’s time to adjudicate or that a party is willing to concede parts of their position to resolve the issue.
All of this should form your defence strategy, which will determine how you respond and the next steps.
Last but not least, we need to consider timing. Cease and desist claims often have short response deadlines. It’s essential to ensure that your legal advisors have enough time to take your instructions and prepare a robust response. So, act swiftly if you receive a letter – failing to reply could lead to court proceedings and, potentially, an adverse judgment.
The response should be clear and concise. It needs to capture your position and should be designed to nip the issue in the bud.
If you think you need to send a cease and desist letter to protect your intellectual property, then the first thing to do is establish what unlawful acts have taken place.
Intellectual property consists of several different rights, so it’s important to clarify which the defendant is infringing. For example, someone copying a company’s logo may infringe on a trademark (if it’s registered) and copyright work. Therefore, the logo itself could be under the protection of two different IP rights, each with different tests for infringement. A copyright, design right, or trademark cease and desist letter must explain which rights are relied on and how they have been infringed.
Once an unlawful act has been established, the letter then needs to address the remedies. In short, what do you want?
The main priority is to end the sale or supply of the infirming items and remove any relevant listings. But although this is important, it doesn’t fully address the issue. Instead, you should address the damage caused. The sales may have been going on for some time, so you should ask for disclosure from the infringer about their activities. The infringer should provide this disclosure along with supporting evidence. It’s a good idea to have the disclosure set out as part of a witness statement, signed with a statement of truth. It would be naïve to suggest that this guarantees complete honesty, but it’s a good place to start.
Once the extent of the damage is known, you can assess the size of your financial compensation either by damages (i.e. the impact on, or devaluation of, your reputation) or an account of profits (i.e. a sum equivalent to the profits made by the infringer).
It’s also common to ask the infringer to pay your legal costs and sign a set of “undertakings” preventing them from infringing your rights in the future.
So there you go, a whistle-stop tour through the primary considerations of a cease and desist letter. However, the take-home point is that, should you receive a letter, seek legal advice. Investing in the right advice from the outset can often shorten the length of any dispute and significantly reduce your exposure. We aim to always find the most cost-effective solution for you without damaging your business or sacrificing what you’ve built.
Our team is on hand to help you through this process, so please get in touch to arrange a free consultation if you’ve received a cease and desist letter.
As a bonus, here are a couple of questions we’ve received in response to this post:
Whilst anyone can write a cease and desist letter if they wish, given the legal complexity and importance of presenting your case well, it’s vital to engage the services of a solicitor. Although simple enough in principle, it still requires careful legal drafting. At the very least, you should first seek legal advice to understand if another party is infringing your rights and if you have grounds for a complaint.
The cost of a cease and desist letter varies between law firms, but the price is typically between £500 and £1,000. Some firms charge per hour whilst others, like ourselves, offer fixed fee quotes.
We’ll start with a no obligation chat where we’ll get to know you and understand your current challenges.
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