It’s a Friday afternoon and you’ve finished your workday. As you begin to close your laptop, you see one last email pop up with the headline: ‘Cease-and-Desist Letter.’ You open the attachment to the email and it’s a demand from a lawyer requesting that you stop selling your product immediately. Naturally this type of communication causes many questions to arise, not the least of which is: “What do I do now?”
What is a Cease-and-Desist Letter?
A Cease-and-Desist letter is a written request to immediately stop doing, saying, or using something, typically on an emergency basis. This substantially affects your business because you are being ordered to halt the marketing, sales, and progress of a new product or service; not because of an inherent flaw or other internal reason, but because of the name of the product.
In a typical Cease-and-Desist letter, the sender will claim a right to request that you stop using your trademark because they have superior rights in that mark. The basis for the letter is that the sender believes that the continued use of both their mark and your mark is likely to cause confusion in the marketplace. In other words, people will be confused over who is the true source of the product – you or the letter sender who is claiming the mark. The letter typically identifies the mark and the specific conduct they wish to cease. And it typically includes a threat of damages and an injunction – or court order – requiring you to stop selling your product. A Cease-and-Desist letter usually gives you a short timeframe to respond, usually about 10-14 days.
Time to Call in Your Counsel
If you were the unfortunate recipient of such a letter, don’t ignore it or throw it away. Instead, immediately forward it to experienced legal counsel as soon as possible. Your selected counsel will evaluate the strength of the claim and assess your risks. Don’t assume the other side has superior rights just because they sent you a letter. You may have courses of defense, such as:
- Are the trademark rights that the sender is asserting truly valid or enforceable?
- Do you have priority of use in the name so that you may continue using it?
- What is the real likelihood of confusion and is it present in this case?
Experienced counsel can go through the multi-factor test that the courts use to determine whether a likelihood of confusion exists. Look at the objective of the letter and think about what your own future plans are for the use of your own mark. Is it a fundamental mark to your business, or is it a new brand that you haven’t built up significant goodwill in, and could pivot away from without too much expense?
How Should You Protect Yourself from a Cease-and-Desist Letter?
You should respond to the claim with a phone call or, preferably, in a strongly worded and detailed letter of your own. Depending on your counsel’s analysis and feedback, your response could dispute the claim in its entirety or you could propose alternatives, such as entering a disclaimer of association to help dispel any likelihood of confusion. You could also consider licensing the use of the mark from the sender.
If the sender’s claim is legitimate and you have been advised by counsel to stop using the mark, you can negotiate a wind-down and transition period, so that you have time to sell off the product that’s currently on shelves and transition to a new brand as seamlessly as possible. If you believe you have the lawful right to the mark, still another option is to file a declaratory judgment lawsuit with the court asking for a judge to determine that you have superior rights in the name or that there is no likelihood of confusion.
Know Your Rights
In sum, if you become the unfortunate recipient of a Cease-and-Desist letter, don’t ignore or throw it away. But don’t assume you have to comply either. Share the letter immediately with experienced trademark counsel, who can give you advice about your rights and the proper response for your particular situation. Richards Rodriguez & Skeith’s team of expert trademark law attorneys can help you protect your brand and your marks, while helping you chart the correct path forward. Contact us today to see how we can help you!