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Responding to a Trademark Cease and Desist Letter: Key Considerations
Practical Law Legal Update 9-535-3983 (Approx. 5 pages)
Responding to a Trademark Cease and Desist Letter: Key Considerations
by Practical Law Intellectual Property & Technology
| Published on 03 Sep 2013 • USA (National/Federal) |
A discussion of key considerations for responding to a trademark cease and desist (demand) letter. This Legal Update includes links to relevant resources discussing the considerations in more detail.
In many cases, a trademark owner sends a cease and desist (demand) letter to an alleged infringer before initiating formal legal action. Often, a well-researched and well-crafted response to a cease and desist letter can cause the objecting party to significantly compromise its position or drop its claims entirely. In contrast, a poorly crafted response may embolden the challenger to pursue its claims in litigation or other formal legal action. If the alleged infringer does not respond to a cease and desist letter, the objecting party may seek to use the non-response as evidence of willful infringement.
Key steps that counsel should take before responding to a trademark cease and desist letter include:
- Evaluating the objecting party and its counsel (see Evaluating the Objecting Party and its Counsel).
- Gathering the relevant facts (see Gathering Relevant Facts).
- Assessing the strength of the objecting party's claims and the client's defenses and counterclaims (see Assessing the Strength of the Objecting Party's Claims and the Clients Defenses).
- Determining the substance of the response (see Determining the Substance of the Response).
For more tips and practical guidance on these and other steps counsel should take, see Practice Note, Responding to a Trademark Cease and Desist Letter and Responding to a Trademark Cease and Desist Letter Checklist.
For a sample trademark cease and desist letter, see Standard Document, Cease and Desist Letter: Trademark Infringement.
Evaluating the Objecting Party and its Counsel
Evaluating the objecting party and its counsel is an often overlooked but critical component of analyzing the risk presented by a cease and desist letter and advising the client on an appropriate response.
Key considerations for evaluating the objecting party include assessing the party's:
- Size.
- Financial resources.
- Type and scope of operations.
- History of trademark enforcement and defense for the asserted mark and the objecting party's other marks.
Key considerations for evaluating the objecting party's attorney include assessing the attorney's:
- Trademark expertise.
- Particular approach in handling trademark matters for the objecting party.
Gathering Relevant Facts
Counsel should gather the relevant facts for performing a complete risk assessment and preparing a substantive response for the client. This includes:
- Identifying any insurance policies that might provide defense coverage.
- Identifying and reviewing potentially relevant agreements, for example, a trademark license between the parties.
- Investigating use of the parties' marks.
- Assessing the harm the client would sustain by stopping use of the mark.
- Gathering any evidence of actual confusion.
- Evaluating any evidence of the client's intent.
- Identifying any trademark applications or registrations owned by the client for its mark.
- Obtaining relevant USPTO records for the objecting party's mark.
For more information, see Practice Note, Responding to a Trademark Cease and Desist Letter: Gather the Relevant Facts.
Assessing the Strength of the Objecting Party's Claims and the Client's Defenses
After counsel has gathered the relevant background information, it should assess the strength of the objecting party's claims and the client's defenses and counterclaims in light of that information. Depending on the asserted claims, this may include assessing:
- The ownership and validity of the objecting party's mark.
- The commercial strength and scope of protection of the objecting party's mark.
- Likelihood of confusion.
- Likelihood of dilution.
- The objecting party's potential relief.
For more information on assessing the strength of the objecting party's claims and the client's defenses, see Practice Note, Responding to a Trademark Cease and Desist Letter: Assess the Strength of the Objecting Party's Claims and the Clients Defenses and Counterclaims. For more on trademark infringement and dilution claims and defenses generally, see Practice Note, Trademark Infringement and Dilution Claims, Remedies and Defenses.
Determining the Substance of the Response
After evaluating the available evidence and the client's legal position, counsel should confer with the client and agree on the substance of the response. The substance can vary significantly from case to case depending on a variety of facts, including:
- The relative strengths and weaknesses of the objecting party's claims and the client's defenses and counterclaims.
- Each party's relative resources.
- The investment that each party has made in its mark.
- The potential harm to the objecting party from the client's activities.
- The hardship to the client from stopping use and adopting a new mark or modifying use of the current mark.
If the client is considering a settlement, counsel should evaluate potential options, including:
- Stopping use of the mark.
- Agreeing to modify the mark or its use.
- Seeking a license to use the mark.
- Purchasing the objecting party's rights.
- Voluntarily abandoning any trademark applications and cancelling any trademark registrations for the disputed mark.
For more information on preparing the response, see Practice Note, Responding to a Trademark Cease and Desist Letter: Determine the Substance of the Response.