Why send a cease-and-desist letter?
On its surface, a cease-and-desist letter seems like a less expensive way to enforce intellectual property rights. Are competitors copying your products? Perhaps you might want to send them a C&D letter to get them to respect your patents. Are Amazon sellers using a similar brand or product name? Would it make sense to send them a trademark infringement letter.
Underneath the obvious intentions of stopping infringement, a C&D letter might serve further strategic purposes. Let’s uncover apparent and ulterior purposes behind infringement notices so that you can make better decisions in dealing with such letters.
Need to enforce your patent and trademark rights, or reply to a cease-and-desist letter? Call patent and trademark attorney Vic Lin at (949) 223-9623 or email vlin@icaplaw.com to explore how we can help protect your IP rights.
Should you send a C&D letter?
You undertake a certain risk anytime you send a letter accusing the recipient of infringement. The recipient may file a lawsuit against you in their home court. How can an accused infringer sue the IP owner? It’s called a declaratory judgment lawsuit, or simply DJ action.
In declaratory judgment litigation, the positions are reversed. Normally the defendant, the accused infringer is now the plaintiff seeking a judgment declaring that they do not infringe your patent or trademark. Accordingly, the patent owner or trademark owner becomes the defendant in a DJ action. As a result, the IP owner becomes entangled in an expensive lawsuit that they were hoping to avoid by sending the letter in the first place. Even worse, the venue may be in a different state. Now you have to hire local counsel in addition to your local patent attorney.
What circumstances would increase the risk of a DJ action? Risks are higher when the little guy sends a C&D letter to the bigger guy. A larger company with more financial resources can use the high cost of litigation as a weapon to get what they want. That should not surprise anyone. So think it through before you have your attorney send an infringement letter.
That being said, sending a trademark cease-and-desist letter may give the trademark owner certain advantages. In particular, you can file a petition to speed up your trademark application and submit a copy of the C&D letter to the USPTO.
How to Reply to a Cease-and-Desist Letter
There may be situations where you can handle a reply yourself. You’ll need to count the cost. Could saving attorney’s fees upfront lead to a subsequent disaster that will cost you more money and stress? Whatever route you choose, don’t do nothing. The lack of a response can make you like a willful infringer. As a result, you may end up paying their attorney’s fees and increased money damages if they prevail in a lawsuit against you.
Let’s look at a few questions to gauge an adequate reply to an infringement letter.
Question 1: What IP rights are mentioned in the letter?
Start with a quick glance to determine what IP rights are mentioned. Does the letter mention a copyright, trademark or patent? Did they provide a registration number? Are they asserting more than one IP asset?
Generally, trademarks and copyrights are less technical in nature. That does not necessarily mean that the legal issue will be simple. Patents are typically more complicated, and utility patent claims will require more sophistication than design patent infringement assertions.
Question 2: Do they just want you to stop, or are they also asking for money or accounting?
Assuming that all they want is for you to stop selling certain products, that is an easier decision to make. But what if they are asking for an accounting of your sales or some monetary payment? This is where it gets more complicated.
Question 3: Can you argue noninfringement or invalidity, or both?
In most infringement cases involving a patent or trademark, the two primary defenses are noninfringement and invalidity.
Noninfringement means you do not infringe their IP. The noninfringement argument focuses on differences between your allegedly infringing activity and their IP rights. For example, you might argue that certain features are missing in response to a patent infringement letter, or that your mark is different in reply to a trademark infringement letter.
Invalidity means that their alleged IP rights are not valid, regardless of whether or not you infringe. For patents, invalidity often refers to prior art showing that what they patented was already publicly known before they filed. For trademarks, invalidity may involve a problem with their prior trademark application or their registration. An experienced patent and trademark attorney can spot these vulnerabilities that would be less apparent to laypersons.
In most legal proceedings, the burden of proving infringement falls on the IP owner while the burden of proving invalidity falls on the accused infringer. If you have reasons to argue that their patent or trademark is invalid, then consider going on the offensive by attacking their registration.
Should you defend a C&D letter by attacking their patent or trademark registration?
Perhaps a good offense may be the best way to defend against an infringement letter. To challenge patents, you can file a request for examination with the USPTO. To challenge registered trademarks, you can file a nonuse attack or a trademark cancellation with the TTAB.
Need an effective strategy for responding to cease-and-desist letter?
A C&D letter is a serious matter. You need to have a smart game plan for a response. Call Vic at (949) 223-9623 or email vlin@icaplaw.com to explore how we can help you defend against patent or trademark infringement claims.
