What is a cease and desist letter?
A cease and desist letter is a written notice demanding that the recipient immediately stop an illegal or allegedly illegal activity. It may be an order or injunction issued by a court or government agency or a letter from an attorney.
The purpose of the letter is to:
Notify the defaulting party of their infringing conduct;
Require the defaulting party to cease and desist their infringing conduct or activity; and
Warn the defaulting party of further legal action in case of non-compliance with the requirement.
Cease and desist letters can be used in a variety of situations to protect the legal rights of one's business. Common reasons to use a desist and cease letter include disputes regarding trademark infringement. Someone who duplicates work that is under trademark protection is likely to receive a cease and desist letter or order. Trademark registration acts as a deterrent for copycats and communicates a strong signal that the company is willing to protect its own intellectual property. The right to issue cease and desist letters is one of the many advantages of having a registered trademark, as it offers a practical way to discourage any further infringement attempts.
In general, the letter should include as many details about the violation as possible.
Every letter should include:
Name and contact information of the sender
The name and contact information of the recipient
A clear statement regarding the actions that the recipient should cease
A warning about further legal action
A time limit to comply (with average time being 10–15 days to respond)
Examples of trademark cease and desist cases
Austria soft drink company Red Bull issued a cease-and-desist letter to a small English gin business, Bullards, in 2021, claiming that they were infringing on their trademark by selling similar products with the word "bull" in their name. Red Bull stated that it was willing to resolve the dispute if the gin firm removed a series of goods and services – including energy drinks, non-alcoholic beverages, and events – from its trademark application and registration. Removing these products meant lost profit to the owners on top of the legal fees they had to pay for the court procedures. Read more about the case.
Jack Daniel's, a renowned brand of Tennessee whiskey, sent Phoenix-based dog toys company VIP a cease-and-desist letter over a parody product of Jack Daniel's whiskey bottle. Tennessee whiskey distillery claimed that VIP Products LLC markets and sells dog toys that trade on the brand recognition of famous companies such as petitioner Jack Daniel's Properties, Inc. In response, VIP stated that their product was a creative work with a "humorous message" that was entitled to First Amendment protections. Read more about the case.
What to do if you receive a cease and desist letter?
Receipt of a cease and desist letter, whether threatening legal action or requesting payment of a sum of money for settlement of the dispute, does not mean you are bound to choose among the options presented therein. It is possible the sender’s legal position is weak, there may be room for negotiation and settlement, and you may even have concurrent rights in the intellectual property you are alleged to have infringed. Therefore, If you receive a cease and desist letter, it is important that you carefully analyse the legitimacy of the claim and allegations.
The responses you can take will depend on the circumstances of your particular case:
If the sender has strong grounds to take legal action against you and if the request in the letter does not disrupt you or your business, the easiest way to deal with it is to comply with the demands.
You can serve the sender with a defence denying the allegations, if you are sure you have not done anything wrong, or try to negotiate an agreement to settle the allegations. This is your chance to make your own demand if you have grounds to do so.
If you are unsure about the matters alleged in the demand, you can write to the sender making a request for clarification and further particulars.
If you believe the demand is a false claim, you can ignore it. Although you are not legally obliged to respond to a cease and desist letter, ignoring it is not recommended considering you may be served with an originating process. For that reason, it is highly advisable to contact a professional legal attorney that can help you choose the best course of action.
In addition to consulting a lawyer, you may also want to discuss the situation with any business partners or other individuals affected by the course of action you choose to take. Consider how complying with the listed demands may affect your revenues, profits, brand and reputation; also consider the cost and likelihood of a potential lawsuit and conduct a cost versus benefit analysis to determine which route may be less costly and damaging to your future prospects. If you require any help with the preparation of cease & desist letters and further legal actions, don’t hesitate to schedule a free consultation with a trademark professional today.
FAQs - How to use cease and desist letters to protect your trademark rights
1. How can a cease and desist letter impact a business financially?
A cease and desist letter can lead to significant financial consequences if you decide to comply. This may include legal fees and potential costs associated with changing branding or business practices. It’s important to weigh these costs against the risk of legal action if you choose to ignore the letter.
2. What are potential risks of ignoring a cease and desist letter?
Ignoring a cease and desist letter can escalate the situation, potentially leading to a lawsuit. This could result in court-ordered penalties, damages, and additional legal costs. It’s often better to address the issue proactively to avoid further legal complications.
3. Can a cease and desist letter be used for issues other than trademark disputes?
Yes, cease and desist letters can address various legal issues beyond trademark disputes, including copyright violations, patent infringements, and contract breaches. The key purpose is to formally request that someone stop actions that violate your legal rights.
