What should you do if you receive a cease and desist letter?

It’s a stressful time. You are busy running your business and out of the blue you have received a letter from someone alleging you are infringing their intellectual property rights. The letter demands a quick response and various remedies.

So, why have you received the letter? Often these letters are referred to as “cease and desist” letters, but they can also be called a “letter of claim” or a “letter before action”. Regardless of the name, the purpose of the letter is for a party to set out why they believe you have infringed their intellectual property rights and the remedies they are seeking. One of the remedies usually sought is for the party to cease and desist the infringement (i.e. to stop the current alleged infringement and agree not to infringe again in the future). You will usually be requested to sign formal undertakings setting out what has been agreed.

If a party commences court proceedings without sending a cease-and-desist letter in the first instance they will usually be heavily criticised by the court (especially from a costs perspective). Fortunately this is relatively uncommon.

Practical tips for your business

We appreciate you will be juggling lots of competing priorities within your business. Generally speaking however any letter you receive containing legal allegations should be put to the top of your list. Here are few things to help guide you:-

1. Obtain independent legal advice:- Cease and desist letters often contain complex allegations around various intellectual property rights (i.e. copyright, trade marks, passing off, design rights and patents). You do not have to obtain legal advice of course, but in our experience the sooner someone contacts a lawyer the better.
2. Act quickly: – Typically the cease and desist letter will require a substantive response within 14 days, failing which they put you on notice they may commence court proceedings against you. In some circumstances it may be appropriate to request an extension of time to provide your response.
3. Gather facts:- Where appropriate, speak with your team to ascertain if any of the allegations have foundation. Sometimes it can just be a case of mistaken identity.
4. Check your insurance policies:- Sometimes insurance policies will help cover some of your legal fees in defending a claim against your business.

At Briffa we regularly help businesses respond to cease and desist letters. Please feel free to contact us for a free initial consultation so we can outline how we can help. Hopefully you can then focus more of your time on running your business.

Written by Daniel Crate – Solicitor