This article is the second in a two-part series identifying potential benefits and drawbacks to consider when deciding whether to use a cease and desist (C&D) letter in an overall trademark enforcement strategy. In the first installment, we introduced C&D letters and their potential benefits.
Here, we discuss the potential drawbacks of using trademark C&D letters, as well as common responses a trademark owner can expect to receive after sending a C&D letter.
What Are the Potential Drawbacks of Sending a C&D Letter?
The decision to send a C&D letter can have significant legal ramifications. First, a notable risk that disfavors the use of C&D letters is providing the other party a chance to file a lawsuit first, and in its preferred court. The C&D letter notifies the other party of the dispute. As a result, the other party may file a lawsuit seeking a declaratory judgment that there’s no trademark infringement. If there are reasons to believe litigating in a certain court is more favorable to one party, the choice of forum may be important, and the party who files first chooses the forum. If the alleged infringing party files before the trademark owner, the trademark owner loses the choice of forum.
Second, a C&D letter could be used as evidence of acquiescence, waiver, or laches. A trademark owner is obligated to enforce its trademark rights. After becoming aware of infringement, a trademark owner should not wait too long to enforce rights because it could be considered an unreasonable delay. In addition, if any follow up to a C&D letter is required by a trademark owner, it should be done in a timely manner. Otherwise, the alleged infringing party may assert untimely enforcement of trademark rights in court as a defense to infringement.
Third, C&D letters can result in negative publicity. Trademark C&D letters can and do go viral. Some trademark owners have been branded “trademark bullies” as a result of inappropriate C&D letters. (However, other trademark owners have been applauded for respectful C&D letters that effectively resolved disputes.) The proper tone is key to minimizing fallout from a C&D letter that may find itself at the center of media attention. A courteous C&D letter preempts negative publicity while addressing the infringement’s level of severity.
What Are Some Responses a Trademark Owner Might Expect After Sending a C&D Letter?
While responses to a C&D letter can be entirely unpredictable, there are some common responses.
First, the other party may be willing to communicate to resolve the dispute, and negotiations may follow. The other party might also immediately agree to comply with the C&D letter. The trademark owner should continue to monitor the party for future issues.
Second, the other party may request more information on why the mark is believed to be infringing in order to evaluate the claim. The other party may also request more time to investigate the claim. While this may be for cost considerations, it’s important to note that the party might also be stalling in order to file a lawsuit first in their choice of forum. The trademark owner should follow up to determine when a substantive response to the C&D letter is expected.
Third, the other party may respond by denying the alleged infringement. The other party may not respond directly to the C&D letter and instead file a lawsuit seeking a declaratory judgment. Or the other party may never respond to the C&D letter at all. In every case, the trademark owner should follow up promptly to enforce trademark rights.
This concludes our two-part series. As you can see, a C&D letter can be a cost-effective way to resolve disputes, but the benefits should be weighed against the drawbacks. An experienced trademark attorney can help evaluate your options and minimize risk.
Armin Ghiam is a partner in Hunton Andrews Kurth’s Intellectual Property group in the firm’s New York office. Jeremy Boczkois a partner in the firm’s Intellectual Property group in its New York office. Sarah Spellmanis an associate in the firm’s Corporate and Securities Litigation group in its New York office.
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