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Help, I’ve Just Received A Cease And Desist Letter!

June 3, 2020, By

As intellectual property experts, we spend much of our time either sending or responding to cease and desist letters. These letters are the first step in intellectual property (IP) claims. They set out the rights of the aggrieved party along with the various “remedies” they seek.

SO, WHAT IS A CEASE AND DESIST LETTER?

Typically, the scenario is as follows: Party A owns some intellectual property, such as a trade mark, a design, a patent or a copyrighted work. Party A places a high value on its intellectual property and has spent a lot of time creating it. Party B then comes along and appears to be infringing the intellectual property of Party A. Party A issues a cease and desist letter to stop this infringement and as a pre-cursor to court proceedings.

The letter should set out 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, these would be 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.

Do I need TO RESPOND TO A CEASE AND DESIST LETTER?

Assuming the cease and desist letter covers the above, there is a case to answer, and you should respond. A defence to an intellectual property infringement claim can involve two parts, although only one needs to be successful:

  1. Questioning the validity of the intellectual property: If the rights are not valid, an infringement cannot occur; and
  2. Questioning the allegation of infringement: Each IP right has a test for infringement. For example, copyright infringement requires the infringer to copy the whole or a substantial part of an original work. However, it is not unlawful to take inspiration from a copyright work or concept and create something independent of it.

So, 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 being 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. Fortunately, if you’re reading this, then you’re in the right place. Our solicitors are on hand to fight your corner. All you need to do is get in touch.

WHAT ARE THE STEPS TO DEFENDING A CLAIM?

1. Validate the allegations

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 it comes to defending IP actions, it’s vital to view the claimant’s intellectual property rights with a critical eye. For example, in respect of a registered trade mark, it 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, it is open for attack. When it comes to unregistered rights like copyright, it’s crucial to ensure that the person/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.

2. Assess the infringement

If the rights in question are valid, then 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).

3. Consider your defence strategy

After dealing with this, we would 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 and what are the potential PR impacts of a dispute? Also, what is the claimant asking for? Damages, costs or just a removal of certain goods from sale?

4. Respond in time

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.

What if I want to send a cease and desist?

1. Establish the infringement

If you think that 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 intellectual property rights, each with different tests for infringement. A cease and desist letter needs to explain which rights are relied on and how they have been infringed.

2. Address your remedies

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 honestly, 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. 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.

Summary

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:

Can I write my own cease and desist letter?

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.

How much does a cease and desist letter cost?

The cost of a cease and desist letter will vary between law firms, but the price is typically between £500 to £1,000. Some firms charge per hour whilst others, like ourselves, offer fixed fee quotes.

Written by Will Miles, Solicitor

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