A discussion of key considerations for determining whether to commence a trademark infringement action.
Your client has identified an apparent infringement of one of its trademarks. Should it sue? While commencing a federal trademark action under the Lanham Act is a fairly straightforward process, whether to litigate infringement, dilution, or related claims should never be a quick decision. The trademark owner's counsel should take time to weigh all of the issues that may impact the client's case before filing suit. Some of the key considerations are discussed below.
Before the client decides whether to sue, it should be informed of the likely time and expense involved in litigating the case, including the estimated:
Costs of any pre-suit investigations.
Costs of any pre-suit consumer survey.
Costs of any pre-suit trademark searches.
Costs of any pre-suit cease and desist letter.
Costs of seeking immediate relief.
Initial pleading costs.
Discovery costs.
Trial costs.
Costs related to the alleged infringer's likely counterclaims.
Soft and collateral litigation costs, for example, time spent by business personnel gathering documents.
Since most trademark actions are resolved before a full trial on the merits, counsel should consider providing the client with cost estimates in stages. Counsel can formulate more accurate estimates of future stages of the lawsuit as they consider information obtained in the earlier stages.
Consider Whether to Send a Cease and Desist Letter
Before filing suit, counsel should discuss with the client whether to send a cease and desist letter to the alleged infringer. In making this determination, the client should consider:
The potential benefits of a cease and desist letter, including the possibility that it will resolve the matter without the need for litigation.
The potential risks of a cease and desist letter, including the possibility that the alleged infringer will file a declaratory judgment action in response to the letter, seeking a declaration of non-infringement or invalidity of the client's mark.
Counsel should also carefully evaluate the tone of any cease and desist letter. While an aggressive tone may be appropriate in cases where the alleged infringer's activities are clearly willful and causing or about to cause significant harm to the client, in other cases a more restrained approach may be more likely to yield the desired results. For example, if the alleged infringer is a small company that it is not acting with willful intent, a letter that is more educational than threatening may be advisable. An overzealous trademark owner risks negative publicity and being labeled a "trademark bully".