Trademark Cease and Desist Letter
This page is in reference to a trademark cease and desist letter. If your cease and desist letter involves some other type of law, please see our cease and desist letter page.
With the number of U.S. trademark applications filed increasing at a healthy pace every year, trademark infringements are also on the rise. In the event of a trademark infringement, there are two likely courses of action. The first is that the infringement is remedied through the process of sending a trademark cease and desist letter. If a cease and desist letter does not work, then the second course of action is to file a trademark infringement lawsuit.
Cease and Desist Letter Trademark Infringement
If someone infringes upon your trademark, you have the right to bring a case against them in federal court. In an effort to avoid litigation, many opt to send a cease and desist letter first. This is a formal notification demanding that an individual or business cease activities that infringe upon trademark rights. It also states that the infringer is not to resume the activities (desist).
Although America is seen as a litigious country, less than three percent of legal disputes actually end up in courtrooms. Research shows that this is due to most issues ending upon the receipt of a cease and desist letter. A cease and desist letter sent by a trademark law firm that regularly litigates trademark disputes lets an infringing party know that you’re serious about protecting your intellectual property rights.
If you’ve received a cease & desist letter, it’s important to recognize that it’s not legally binding. Although the letter will undoubtedly threaten legal action, this is not a promise that such action will take place. Even with this being the case, it’s important that you take the letter seriously since you may be on the cusp of being sued. It will typically provide a timeframe to respond, and you need to make sure that you do so.
Is My Trademark Being Infringed?
Before sending a trademark cease and desist letter, it’s important to know whether your intellectual property rights are actually being infringed upon. Sending such a letter is not something to be taken lightly. An increasing number of courts have begun viewing frivolous cease and desist letters as unfair competition and have even used these notices as proof of “unclean hands” in proceedings.
Anyone who has a legitimate claim of trademark infringement, though, shouldn’t worry about this potentiality. If the trademark cease and desist letter or any related litigation is brought in good faith, you’ll have nothing to worry about. The following instances are examples of infringing activities that you should take seriously.
- Consumers are mistaking another company’s products as your own.
- Even if consumers aren’t yet confused, a likelihood of confusion exists.
- Use of a similar trademark is devaluing your brand.
- Persons or entities are falsely implying relation to your brand.
- American distributors are selling foreign knockoffs of your product.
The main factor to consider when deciding if your trademark is being infringed upon is “likelihood of confusion.” If any actions undertaken by another party may cause consumer confusion, it’s likely they’re violating your trademark rights.
Components of a Common Law Trademark Cease and Desist Letter
A trademark cease and desist letter is very simply a demand that an infringer terminate their actions. If the infringement continues, the letter can serve as evidence that the infringement was willful. This removes an infringers ability to claim ignorance if the matter ends up in court. Components of a typical trademark cease and desist letter include:
- The name and contact information of yourself and the infringer.
- Actions you are demanding a cessation to.
- Circumstances and dates of alleged violations.
- Trademark registration number, or details of common law trademark rights.
- A demand that infringing activity cease upon receipt of letter.
- A specified timeline for recipient to respond to letter.
- A statement alluding to the possibility of further legal action being taken.
The tone and contents of the letter will let the offending party know that you understand your rights and how to assert them. In most cases, getting the trademark cease and desist letter right will quickly end the issue. On the other hand, if the letter is too threatening, not threatening enough, or does not come from a trademark lawyer that litigates, the letter could damage your standing and case.
What if the Cease and Desist Letter is Ignored?
This is a common question that we receive, and our answer is that our letters are almost never ignored. The reason for this is that people understand that if they ignore a letter from our law firm, they will be sued for trademark infringement. However, a letter from the owner of the business itself, or from a friend lawyer that does not litigate trademark cases, may be ignored. In this case the other party may not recognize the seriousness of what they’re doing, or they may try to call your bluff to see if you will actually hire a trademark attorney or threaten litigation.
Regardless of the specific situation, it’s important to back up your actions if there is not full compliance with your cease and desist. If there is not prompt and full compliance with the letter we send, we recommend that our clients have us immediately file a trademark infringement lawsuit in federal court.
If a trademark infringement lawsuit is ignored, we will quickly request that the judge issue a default judgment. Therefore, trademark infringement issues should never be ignored.
Is Filing a Trademark Infringement Lawsuit the Right Way to Go?
Over the past few years, the number of trademark cases brought in federal courts has ranged from 4,000 to 4,800 per year. At times it does make sense to skip the cease and desist letter and instead file a lawsuit. This is true if you know the infringer will not comply with your letter. There are some people that just will not do anything you request until you sue them. At other times the infringer wrongly believes that there is no infringement and thus refuses to stop. Being served with a lawsuit tends to bring clarity in these instances.
The driving force behind most instances of trademark litigation is injunctive relief. When the courts decide that a trademark is being improperly used, the most common result is an injunction stopping the infringing actions. This will ensure that the offending party immediately ceases their actions. If they fail to do so, they could face criminal charges.
In addition to injunctive relief, monetary damages can be awarded in trademark infringement cases. Between 2009 and 2017, over $5 billion was awarded in trademark litigation. Over 86 percent of these damages ($4.6 billion) were granted through default judgments. A default judgment is granted when the defendant fails to even appear to defend their actions.
Even when default judgments aren’t granted, though, you may still receive monetary damages and in exception cases attorneys fees. Courts may award compensation when you can proved that the infringement resulted in lost profits. Additionally, attorneys fees may be granted if it’s proven that the trademark violation was willful.
The Trademark Trial and Appeal Board
Another avenue to attack trademark rights is to file a trademark opposition or trademark cancellation. A notice of opposition is filed before a trademark registers, while a Petition to Cancel is filed after registration. An opposition or cancellation can be filed when a trademark owner will be damaged by a new registration or the continuing registration of an existing trademark registration. Common grounds for these cases is an allegation of consumer confusion or a claim of trademark abandonment. Three years of non-use of a trademark can create a presumption of abandonment.
A Duty to Police Trademark Rights and Trademark Bullies
A trademark owner has a duty to police infringing uses of its trademark. A failure to police the trademark can lead to the loss of rights. Sending a cease and desist and filing a trademark lawsuit are examples of policing your trademark. These actions will curtail future problems by quickly dealing with any current infringement.
Taking your duty to police your trademark too far can result in a claim of being a trademark bully. This occurs when a trademark owner uses their rights to intimidate or harass businesses beyond what’s legally justified. The most common tool at a trademark bully’s disposal is the trademark cease and desist letter. If these entities know that the trademark infringement claim is weak, it is less likely that they will actually follow through on any litigation threats. In many cases, trademark bullies are hoping that minimal financial resources, fear of litigation, or indifference to continued use of the trademark will lead the recipient of the letter to stop use of the trademark.
Deductive research shows that at least 5 percent of trademark cease and desist letters are nothing more than trademark bullying. Because of this reality, you should never panic upon receipt of a cease & deist.
Trademark Cease and Desist Letter Response
If you have received a trademark cease and desist letter, we highly recommend that you have a trademark lawyer that litigates prepare the response. This will show that you are very serious in defending your rights. Even if the sender is mistakenly claiming trademark rights they don’t have, a convincing response could prevent them from filing a misguided lawsuit that can cost you time and money.
Another reason to hire a trademark attorney is that we’ve seen clients make mistakes in a response to a trademark cease and desist letter by doing and saying things that expose them to liability such as committing defamation or intentional interference with business relations. At times these acts can lead to more exposure than the original alleged infringement.
While it may seem tempting to make your reply a mere letter of disagreement, you actually need to provide reasons for the sender to end the contact. The letter should showcase a knowledge of trademark law and point out the flaws in the sender’s claims. It must be made apparent that litigation is an acceptable outcome and you won’t go down easy.
Trademark infringement requires that the claimant have prior rights to a trademark. Evidence of this priority should be provided in the initial cease and desist letter, but in many cases, it simply isn’t. While this could be an oversight, it could also mean that they’re having difficulty proving their use.
If evidence of priority isn’t included in the document, it should be thoroughly investigated. If there is no federal registration then the trademark owner is relying on common law trademark rights. In this case evidence of use becomes much more important to the case.
Determine the Likelihood of Confusion
In addition to priority, trademark infringement requires that a likelihood of confusion exist. Courts around the country consider the Sleekcraft Factors and DuPont Factors to determine the likelihood of confusion. These Factors include:
- Similarity of trademarks in appearance, sound and connotation.
- Similarity of the goods and services being manufactured or sold.
- Whether similar trademarks are used within the industry.
- Trade channels that both parties may have in common.
If the cease & desist response makes valid points as to priority or that there’s no likelihood of consumer confusion, the response letter may immediately end the issue.
What if I’m Infringing a Trademark?
Even if you’re vigilant in doing a trademark search and filing a trademark application, there’s always a chance that you could accidentally commit trademark infringement. If you receive a cease and desist and realize that you are liable, you’ll need to end your infringing activity. Fortunately, this doesn’t necessarily mean you’ll lose money on branded merchandise.
In these cases, we typically negotiate a reasonable phase out period. This will allow you a certain amount of time to sell off the rest of your stock. If you’re allowed to do this, all sales of infringing products must end at the cutoff date. The fact is that most individuals and brands would prefer to avoid trademark litigation. Because of this, they’re often willing to make a deal that works out for everyone.
Because the first offer toward settlement is the most important, we highly advise that you consult with a trademark lawyer prior to any response to a cease and desist.
Trademark Cease and Desist Attorneys
We take our client’s trademark rights very seriously and are highly experienced in achieving the best possible outcome in trademark infringement cases. When we send a trademark cease and desist letter or response, it carries weight. We look forward to assisting you.
If you have a trademark cease and desist issue, please feel free to contact us.