When tech startups, entrepreneurs, and other brand owners start to use a trademark, brand name, logo, or slogan in connection with the marketing and branding, there is a chance the business owner or trademark owner may receive trademark cease and desist letter from another company or individual. A trademark cease and desist letter may be received irrespective of whether the trademark owner has filed a federal trademark application in the United States Patent and Trademark Office (USPTO), as they are often triggered by the brand owners trademark monitoring practices and other eventual discovery of the (potentially) infringing trademark.
Cease and Desist Letters Explained
The United States Patent and Trademark Office (USPTO) defines a trademark cease and desist as a correspondence by letter or email that states use of a word, logo, or phrase potentially infringes the trademark of another individual or company, and demands that the use be stopped immediately. Most legal experts recommend to treat any such letter or email seriously. Below is a discussion of the most common legal options trademark owners have after receiving a cease a desist letter. Before proceeding with any option, brand owners should consult with an experienced federal trademark attorney.
Option 1: Respond To The Letter
First, the recipients of a cease and desist letter may respond to the letter/email and deny infringement or request more specific evidence as to why the trademark owner believes its trademark rights are being infringed upon. Such additional information may include specifics about dates of first use, whether the mark is federally registered, and the geographic areas where the mark has been used, among other details.
Option 2: Ignore the Letter and Do Nothing (Not Recommended)
Another option after receiving a trademark cease and desist letter is fail to respond, or otherwise do nothing. The decision not not to respond to a trademark cease and desist letter may be strategic and should be considered carefully, preferably with the consultation of an expert trademark attorney.
In some cases, a cease and desist letters/emails is sent in the hope that some recipients will be misled or intimidated into stopping or paying for use even though there is no legal requirement, or leverage, to induce payment, royalties, or any other kind of licensing fees. However, the decision not to respond should not be made lightly because doing nothing carries some risk. If a trademark infringement lawsuit is brought and the defendant is later found liable for infringement, the court may determine that failing to respond to a cease and desist letter was reckless and this could subject the defendant to additional monetary damages, including possible attorneys’ fees. .
Option 3: Negotiate A Deal After Receiving a Cease and Desist Letter
Negotiation of a deal after a cease and desist letter is received is a common and prudent, particularly with the consultation of an experienced trademark lawyer and intellectual property litigation expert. The negotiations may result in an amicable resolution that may or may not include the right to continued use of the trademark, logo, or slogan in question, depending on the terms negotiation. In some cases, other terms such a sell off period, territory permitted use, type of use, and settlement amount may be negotiated. In most brand disputes, trademark oppositions, or legal conflict of various types in business, negotiation is the preferred resolution strategy, provided the parties are reasonable and motivated to make a deal.
Option 4: Respond with Court Action and File A Lawsuit
Another option in responding to a trademark cease and desist letter is to file a lawsuit in federal or state court in a declaratory judgment action stating that the trademark does not in fact infringe with the brand names, logos, or slogans cited in the trademark cease and desist letter. A declaratory judgement a binding judgment from a court defining the legal relationship between parties and their rights in a matter before the court. Under Article III of the U.S. Constitution, a federal court may only issue a declaratory judgment when there is an actual controversy, and this may be triggered by the receipt of the cease and desist letter. Consideration of filing a declaratory judgment after receiving a cease and desist letter should be made carefully with the consultation of an expert federal trademark attorney as it is likely to involve nuanced intellectual property issues pertaining to trademark priority, likelihood of confusion, trademark damages, punitive damages, and attorney’s fees.