You’ve Received a Cease and Desist Letter: Now What?

When foreign and overseas companies and individual’s doing business in the United States fail to do due diligence on their intellectual property assets before introducing them into U.S. markets, they run the risk of legal action from U.S.-based companies who believe their intellectual property rights have been infringed.

Often, the first inkling of such legal action comes in the form of a cease and desist letter from the owner of intellectual property rights in the United States.

What is Intellectual Property?

Intellectual property comes in many shapes and forms—namely copyright, trademarks, patents, and trade secrets.

Copyright

Copyright equals some form of creative expression that’s fixed in a tangible medium, such as non-open source software code, art, text, books, photos, videos, movies, songs, recordings, drawings, etc. While there is no such thing as 100 percent international copyright protection, the United States and most other countries offer protection according to international copyright treaties and conventions. Some 148 countries currently participate, offering certain base levels of protection.

Trademarks

A trademark is a symbol, word, phrase, sound, color, or other unique identifier of specific goods or services from a specific source.

Patents

Patents give an owner the legal right to exclude others from making, using, selling, and importing an invention for a limited period of time, usually in years. They are only applicable in the country in which the patent application was filed and granted, so inventors/companies need to consider applying for patents in other countries where the invention may be sold or manufactured.

Trade Secrets

A trade secret is any confidential, non-public formula, practice, design, method, compilation, device, or other information that has economic value and is used in business.

The Patent Cooperation Treaty (PCT) offers a level of patent protection for inventions in more than 150 nations using just one international application. Of course, to ensure maximum protection, countries doing business in the United States who are concerned about their intellectual property should file with the USPTO.

If You Receive a Cease and Desist Letter

If you get a cease and desist letter, be it in the mail, email, or overnight or hand delivery, do NOT ignore it. The ramifications of such legal actions are real, consequential, and can be long-lasting. Immediately CONTACT A LAWYER!

First consider whether the allegations have merit:

• Does the plaintiff accurately describe a product/service offered by your company?
• Are the asserted intellectual property rights valid?
• Did you do due diligence to ensure your trademark, patent, or copyright claim did not infringe on the intellectual property rights of an individual or company in the United States?
• Are the demands, remedies, or damages requested reasonable?
• Did you purchase insurance to cover such an occurrence?
• Can you actually comply with the demand or potential negotiation of a settlement realistically? If such action feasible or desirable?
• If you were to comply or settle, what does that mean for your business, your customers, your business partners and investors?

Depending on your situation, you may need to weigh whether engaging in further litigation is the only viable option for you versus some form of settlement.

• If litigation is in the cards, what would the goal of litigation be?
• What would it cost?
• What are the risks?
• What are the benefits?

Rather than submit to litigation on the other side’s terms, consider whether it would be appropriate to respond with a declaratory relief action (a lawsuit filed by you, wherein you ask a court to determine the rights of parties without ordering anything be done or awarding damages):

• In that scenario, what would the plaintiff’s counterstrike be?
• Are the plaintiff’s intellectual property rights even vulnerable to collateral attack?

Where to Next?

If you’re feeling overwhelmed by the sheer enormity of questions and possible considerations, you are not alone. Engaging in business in foreign markets is tough work. So is navigating the minefield of intellectual property law. In many cases, infringements occur inadvertently or through simple misunderstandings and omission. Whatever the reason, you don’t have to go it alone.

Protect Your Product. Your Business. Your Dreams.

Contact Eric Ludwig today for a free, one-hour consultation to discuss how you might challenge a cease-and-desist letter, jurisdiction claims relating to intellectual property, and the substance of a plaintiff’s claims.  (619) 929-0873 | [email protected]