Cease and desist!

If you've ever received a cease and desist letter alleging that you have infringed someone’s intellectual property (IP) rights, you know that it can be a daunting experience.?

Such letters are formal legal notices sent by the owner of the IP, demanding that you immediately stop the alleged infringing activity.?

They can be intimidating, demanding, and distracting - taking you away from developing your business and its big ideas.

If (or when) you’ve received one, it’s crucial not to panic, but be prepared to respond promptly and carefully to avoid further legal complications.?

Your next steps are crucial.

Step 1. Do not ignore the letter

While you may be tempted to disregard the letter (or reply to it in a knee-jerk manner), ignoring it can lead to more serious consequences.?

A cease and desist letter is often the first step in a legal process, and failing to respond could result in formal litigation.?

By ignoring the letter, you may also be seen as acting in bad faith, which can negatively impact the outcome if the matter progresses to court.

So, what do you do?

Step 2. Review the allegations carefully

Before taking any action, thoroughly read the letter and understand the claims being made.

A cease and desist letter should clearly state the following:

• Which specific intellectual property rights are being infringed (e.g. reference to trade mark, copyright, patent, design).
• How your actions are allegedly infringing those rights (e.g. using a similar trade mark, copying copyrighted work with evidence of the alleged infringement).
• What the IP owner demands (e.g. stop using the disputed IP, cease selling infringing goods, or remove certain content).

Take your time to assess whether you believe the claims are valid.

Try not to be biased. It's typical for an alleged infringer to underestimate any infringement they’re being accused of.?

Only an IP specialist will really be able to ascertain the extent infringement has occurred when presented with the facts.

It’s important to understand exactly what the other party is alleging before coming to any conclusions, or taking any definitive action.

Step 3. Consult with an IP lawyer

At this point, if you haven't already, it's highly recommended to seek legal advice from a qualified IP lawyer.?

(Yes, I know that's what you'd expect me to say! But it really can become a dog's dinner if you're not careful at this stage - we're there for you either way).

An experienced solicitor can help you evaluate the validity of the claims, explain the options available to you, and assist in crafting an appropriate response.?

In some cases, the allegations may be baseless, and you may have a valid defence.

In other instances, your lawyer may be able to mitigate the impact of a claim by negotiating with the other side - settling the issue before a formal legal dispute is brought.

A lawyer can also help you avoid making any admissions or mistakes that could harm your position later.

Step 4. Determine if the allegations are valid

Once you have consulted a lawyer, you’ll then assess whether the claims made in the cease and desist letter are legitimate and defensible from a legal point of view.?

Some potential defences against IP infringement include:

• Fair use or fair dealing: For copyright infringement, if your use of the work falls within the scope of fair use (or fair dealing in the UK), you may not be infringing. This could apply, for example, to commentary, criticism, or parody.
• Non-infringement: You may have a valid reason to believe that your actions do not infringe on the IP owner’s rights. This could be the case if the alleged IP is not valid, or if your use does not meet the criteria for infringement.
• No likelihood of confusion: For trade mark infringement, if the mark you’re using is sufficiently distinct and unlikely to confuse with the IP owner’s mark, you may not be in violation.
• Reverse engineering or prior use: In patent and design law, you may have the right to reverse engineer a product or use a design that predates the registration of the contested IP.

Again beware of your own biases in these kinds of situations.

Objectivity, experience, and critical distance from your legal advisor are highly valuable here. Once a response is sent, you cannot "unsend" it. So it's important that you do it right.

If your lawyer determines that the allegations are unfounded or that you have a valid defence, they can help you draft a response to dispute the claims and potentially avoid further action.

Step 5. Consider negotiating a settlement

If you acknowledge infringement or believe that it might be a misunderstanding, you and your advisor may want to explore settling the matter amicably.?

Negotiation or alternative dispute resolution (ADR), such as mediation, can be a cost-effective way to resolve IP disputes without going to court.?

A settlement might involve:

• Ceasing the infringing activity: You may agree to stop using the IP or remove the infringing content.
• Licensing: If you want to continue using the IP, you could negotiate a licensing agreement with the IP owner.
• Monetary compensation: In some cases, a settlement might involve paying the IP holder for past use of their IP.
• Undertaking a rebranding exercise: In the case of trade mark infringement, you may agree to create and deploy a new brand that does not infringe on the mark that’s been enforced.

If you are willing to settle, be sure that any agreement is formalised in writing and includes clear terms that protect your interests, and limit your exposure.?

Again, there are pitfalls here to not being legally represented, as it is not uncommon for agreements to be signed that limit you and your business disproportionately.

Step 6. Respond to the cease and desist letter

If you agree with the claims, your response should confirm that you will comply with the demands, specifying actions you will take to stop the infringement.?

You should also outline a timeline for compliance.?

On the other hand, if you dispute the allegations, your response should explain why you believe the IP holder’s claims are invalid, citing any evidence or legal defences.

Here are some potential responses, depending on your advisor's advice and assessment of the likelihood of success:

• Agreeing to cease the infringing activity: If you acknowledge the infringement and are willing to stop, outline the steps you will take (e.g. withdrawing products from sale, removing content, etc.).
• Disputing the claim: If you believe the allegations are unfounded, your response should include a clear rebuttal. It may be necessary to present evidence that supports your position, such as proof that the IP is invalid, or that you have permission to use the IP in question.
• Requesting further clarification: If the letter is vague or lacks specifics, you can ask the IP holder to clarify their claims, including providing evidence of the infringement or a formal registration of their IP.

A measured, professional response can sometimes resolve the matter without escalating it to litigation. Crucially, the composition of this initial response can be the difference between nipping an issue in the bud and an escalation that causes serious issues.

7. Prepare for possible litigation

If the dispute cannot be resolved through negotiation or settlement, the IP holder may choose to pursue legal action.?

If this happens, you’ll need to be prepared for the next steps in the litigation process.?

Your lawyer will guide you through the relevant legal procedures, which may include filing a defence or counterclaim, gathering evidence, and appearing in court.

In cases where the IP holder has a strong case, you may want to consider the cost and risks of going to court versus negotiating a settlement.?

It’s essential to be prepared for the possibility of further legal proceedings, particularly if the IP holder is unwilling to compromise.

Final thoughts

Receiving a cease and desist letter for IP infringement doesn’t necessarily mean you're in the wrong, but it’s important to handle the situation carefully.?

By consulting an IP lawyer, reviewing the claims, and considering your options, you can determine the best course of action.?

Whether you decide to settle, negotiate, or dispute the allegations, responding in a timely and professional manner can help you protect your interests and avoid costly litigation.

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