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On Trademark Cease and Desist Letters: Strategies & Considerations

January 23, 2017Basic Trademark Matters

Picture of Mailboxes along Route 66 with text reading "The Trademark Cease and Desist Letter - Strategies & Considerations"

Trademark cease and desist letters are a crucial part of a trademark attorney's arsenal. Granted, they seem simple and straightforward. However, when you dig beneath the surface, they are deceivingly complex. When a trademark owner undertakes the task of sending a demand letter without counsel, many important strategic and substantive legal issues are not vetted. The same goes for using an attorney who does not specialize in trademark law to send the cease and desist letter. This post is here to help. Use it as a resource to check off items that you should consider when sending a trademark cease and desist letter.

The First Rule of Trademark Demand Letters: Priority

The first rule of trademark demand letters is: make sure you have priority. The second rule of trademark demand letters is: MAKE SURE you have priority. The third rule of trademark demand letters is: if the recipient yells "stop!," goes limp, or taps out, the fight is over.

priority is so important, I've underlined it

A long time ago in a galaxy far, far away ... I was a first year associate in the trademark practice group at a prestigious intellectual property boutique law firm. Drafting trademark cease and desist letters was among the first legal tasks assigned to me when I started my legal career. I can still distinctly remember my supervising partner giving me his Fight Club-esque speech about the importance of determining priority before sending a cease and desist letter. Every time before we sent a letter, he would ask me if we had confirmed that our client's first use in commerce predated the recipient's first use. To the extent possible, we would confirm that our client had superior, prior rights in the trademark at issue.

I remember the first time one of our clients received a cease and desist letter, despite clearly having prior rights. And it wasn't even close. Our client had been using its mark for 10+ years longer than the party who sent the letter had been using its mark. Even a little cursory research on the Internet or on the USPTO's website would have clued the other party into this fact. My supervising partner was giddy, smiling ear to ear like the Cheshire Cat. Guess what we did? Yep, we immediately initiated legal action against the party who sent the letter.

Everything else I discuss in this post is important. But it all takes a back seat to confirming that you have prior, superior rights before you fire off that cease and desist letter.

Who's Afraid of the Big, Bad DJ?

When you're sending a cease and desist letter to an infringer, you need to be aware of the very real risk that, upon receipt of your letter, the infringer may choose to file a lawsuit seeking a declaration judgment of non-infringement. The Declaratory Judgment Act provides that

In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.

28 U.S.C. § 2201(a). Assuming the requirement of an "actual controversy" is met, the recipient of a trademark cease and desist letter can file complaint in federal court for a declaration that it is not infringing. Because the purpose of this blog post is to outline issues that should be considered when sending a cease and desist letter, I am not going to dive into when a cease and desist letter creates an actual controversy or supports a claim for declaratory relief. The concern with a declaratory judgment action is twofold: (1) you may be sued in a court that you do not want to litigate in (maybe out-of-state or across the country), and (2) you may be forced into litigation when before you had decided that you were willing to litigate. Obviously, this concern is mitigated if the defendant is located in the same federal district as the trademark owner and/or if the trademark owner is prepared to litigate.

Get to the Back of the Line, You Infringing Scum

One way to combat the risk of being DJ'ed in a venue that you don't want to litigate in is to file your trademark infringement complaint in the venue you want before you send your cease and desist letter. You can file your complaint but hold off on serving it. You can then either let the other side know that you've done this in your initial letter (which would discourage the recipient from running off and filing a DJ complaint), wait until the second follow-up letter, or serve it if the initial or follow-up letter doesn't work. If you're taking this approach, do a little legal research to confirm that the first-to-file rule will carry the day in the district courts likely to be involved (it usually does).

Don't Be a Paper Tiger

a paper tiger does not roar

Before you send a cease and desist letter, know what your client is willing to do if the recipient does not comply and continues to infringe. This requires an honest dialogue with your client about its options if the letter is ignored by the other side. Less sophisticated clients might not realize that the only real recourse to force an infringer to stop using an infringing mark is to file a federal trademark infringement lawsuit. If a TTAB opposition or cancellation is in play, that may lead to the same result voluntarily or through settlement, but the TTAB won't issue an order enjoining use of an infringing mark. To gauge if the client is willing to go down the road of enforcement, a frank discussion of the significant costs associated with these options has to occur (some clients have no real idea of just how expensive it can be). If your client is serious about enforcing its trademark rights and is willing to file a federal trademark infringement lawsuit or TTAB proceeding if the recipient does not comply, then proceed with the first salvo.

On the other hand, if your client wants to be a paper tiger, there are additional issues that should be discussed and considered. If your client wants to send a cease and desist letter without committing to enforcement, there are some potential consequences that can affect its rights down the road. The considerations may even be significant enough to sway the client to not send a letter at all.

Waiving Goodbye to a Preliminary Injunction

In order to obtain a preliminary injunction in federal court, a moving party must demonstrate that it will suffer irreparable harm if a preliminary injunction is not issued before a decision on the merits can be rendered. Irreparable harm can no longer be presumed in trademark cases. But if the moving party has delayed in seeking a preliminary injunction, the delay undercuts the urgency that accompanies a motion for preliminary relief and suggests that there is no irreparable harm.

In this regard, a comprehensive study of federal trademark cases reveals motions for preliminary injunctions are denied for lack of irreparable harm when the moving party has delayed six months or more before filing the motion. Between 1990 and 2009, Sandra Edelman and Robert Raskopf authored four publications for The Trademark Reporter in a series that addresses the effect of delay in preliminary injunction motions in trademark cases. Sandra Edelman & Robert Raskopf, Delay in Filing Preliminary Injunction Motions, 80 TMR 36 (1990); 85 TMR 1 (1995); 92 TMR 647 (2002); 99 TMR 1074 (2009). In their articles, Raskopf and Edelman’s study of trademark cases concluded that while a three month delay is generally acceptable, a delay of six months runs a significant risk of denial of a motion for preliminary injunction, and most cases deny a motion for preliminary injunction if a year or more has passed. Their articles and studies have been cited with approval by both courts and the leading trademark practice guide McCarthy on Trademarks. CLT Logistics v. River West Brands, 777 F. Supp. 2d 1052, 1072 (E.D. Mich. 2011) (citing and referencing Edelman’s article); J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition, §§ 31:31 (2012).

The delay is generally measured from the time the trademark owner first learned of the defendant's infringement. If a cease and desist letter was sent by the trademark owner, then that establishes a date from which the court can calculate the delay in seeking preliminary relief. Accordingly, if your client is not willing to promptly enforce its trademark rights when a recipient of a cease and desist letter does not comply, it may be relinquishing its right to obtain a preliminary injunction in federal court. And to be safe, the trademark owner would want to move for preliminary relief within three months of sending a cease and desist letter. That's not a lot of time. That means a strategy for enforcement needs to be in place before the letter is ever sent (assuming preliminary relief is an important remedy for the client).

Don't Let Laches Run Away From You

Laches is an affirmative defense, rooted in equity, that prevents a party from asserting a trademark infringement claim after too long of an unexcused delay. It is a very fact-specific defense. But it is measured from the time that a plaintiff knew or should have known that it had a claim for trademark infringement.

Therefore, once you send a trademark cease and desist letter, you start the clock running for purposes of a laches defense. So, if you are going to be a paper tiger and not actually follow through on your threats, you'll be providing the recipient with a laches defense. How long it takes before laches kicks in varies case by case. It could be as little as three to five years or as long as seven to ten years. The rule of thumb though is seven years, but courts have sustained laches defenses based on much, much shorter delays than seven years.

Other Litigation Considerations

In addition to how a cease and desist letter can impact declaratory judgments, preliminary injunctions, and laches as discussed in the preceding sections, an attorney should consider how the cease and desist letter will play as evidence in a trademark infringement lawsuit. In doing so, an attorney should review and analyze the content of the letter with an eye towards using that letter as an exhibit attached to motions, an exhibit attached to discovery requests, an exhibit used to question deponents, an exhibit used with witnesses at trial, and an exhibit that will be seen by a jury.

Proposing Settlements or Including Settlement Language

Some cease and desist letters include proposed settlement options, suggest non-infringing alternative trademarks that the recipient could adopt instead, or even directly reference Rule 408 of the Federal Rules of Evidence ("FRE"). One of the reasons that I prefer not to include any settlement references in the cease and desist letter is because I want to use the cease and desist letter as an exhibit moving forward and I don't want the recipient to argue that the letter is not admissible under FRE 408. In this regard, FRE 408 provides as follows:

(a) Prohibited Uses. Evidence of the following is not admissible — on behalf of any party — either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:

(1) furnishing, promising, or offering — or accepting, promising to accept, or offering to accept — a valuable consideration in compromising or attempting to compromise the claim; and

(2) conduct or a statement made during compromise negotiations about the claim — except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory, investigative, or enforcement authority.

(b) Exceptions. The court may admit this evidence for another purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

Admittedly, this concern is more in the nature of paranoia than reality. I've never had a cease and desist letter excluded under FRE 408. And honestly, I haven't researched whether there are any cases in which a cease and desist letter has been excluded under FRE 408. And if I was introducing a cease and desist letter as an evidence, I would not be using it to prove the validity of a disputed claim. I'd likely be using it to show knowledge and prove willfulness, which should be allowed under FRE 408(b). But I don't want to even give the other side any basis to make a FRE 408 argument. So I prefer leaving that language out. If I want to make a settlement offer, I can always do that in a separate letter properly designated as such.

Don't Undercut Willfulness

As a trademark attorney, I've seen many cease and desist letters in my career. In many of those letters, I will see some reference to the recipient's infringement as unintentional, accidental, or some other similar verbiage. While I understand the desire to include this language to soften the impact of the letter so as to not put the recipient on the defensive, I don't like including that language because, if I need to pursue a willfulness argument down the road, I don't want the recipient throwing that language back in my face.

First off, when I'm sending a cease and desist letter, I almost always don't really know whether the recipient's infringement is intentional and willful or whether it's just an innocent mistake due to the ignorance of my client's rights or of trademark law generally. Therefore, why should I make any assumption at all, especially an assumption that favors the opposing party rather than my client?

And second, let's say the recipient does not comply with the demands in the cease and desist letter, your client files suit, you prevail, and now seek enhanced damages and attorneys' fees based on willfulness. A defendant may try to point to the language in your cease and desist letter as evidence that even you and your client did not think the defendant's action were willful. Now, of course, there are a lot of holes in that argument, including the fact that the recipient continued to infringe after receiving the cease and desist letter. But why even give them that argument to begin with? There's no good reason. So just delete all language that implies that the recipient was acting in good faith, unintentionally, or innocently.

Striking the Wrong Tone

With cease and desist letters (and responses to cease and desist letters) being published on the Internet and gaining public attention, there's been a trend among some attorneys to try to make their letters amusing (usually they try a little too hard) and sometimes downright snarky. I don't know if they are hoping their letters go viral within the legal community (and some do) or if they think being funny or snarky is a winning strategy. But almost none of the attorneys who take this approach are litigators.

Conversely, some attorneys write cease and desist letters that contain over-the-top threats and are heavy on the condescension. This is the more old school approach of making the cease and desist letter as scary as possible. While a cease and desist letter should definitely put the recipient on notice that he is infringing your client's trademark rights and violating trademark law, these points can be more effectively communicated when conveyed in a matter-of-fact manner.

If you have to go down the road of litigating a trademark infringement lawsuit, the tone of that letter is going to be important. You don't want it to appear that your client does not take its trademark rights seriously or have your client come off as a bully or buffoon. Keep the tone of your cease and desist letter professional, polite, and firm.

For Every Cease & Desist Letter, There Is a Time to Wait, a Time to Send

Just because you can send a cease and desist letter doesn't mean you should. Or maybe you shouldn't sent it yet. Prematurely sending a cease and desist letter is a common mistake that trademark owners make. Ultimately, a trademark owner wants to strengthen and enforce its trademark rights. Sometimes this requires a bit of patience. Here are some considerations that may warrant delaying the sending of a trademark cease and desist letter.

Where is Your Trademark Application in the Prosecution Process?

If you have a pending trademark application at the U.S. Patent and Trademark Office ("USPTO"), consider where the application is in the prosecution process before sending a cease and desist letter. If your trademark application has not yet passed the opposition period, you may want to wait until the 30 day opposition period has expired. Otherwise, there is a very real chance that recipient of the cease and desist letter will oppose your trademark application (assuming it has grounds to do so). If the opposition period will expire relatively soon, why not wait until after it expires? You'll end up with a trademark registration, statutory presumptions, and the availability of additional remedies provided to registered marks.

Likewise, if your application is still being examined by an examining attorney at the USPTO, it is possible that the recipient of a cease and desist letter could file a letter of protest (assuming it has grounds to do so). This could bring additional issues to the attention of the examining attorney that may prevent the trademark application from ever even reaching the stage of being approved for publication. Therefore, consider whether the recipient has any bases for filing a letter of protest against your application before sending a cease and desist letter.

Is Your Trademark Registration Close to Incontestability?

If you have a trademark that is registered on the Principal Register at the USPTO, calculate when you can file your § 15 Affidavit of Incontestability. It can be filed as soon as the fifth year after the date of registration. 15 U.S.C. § 1065. Once your registration becomes incontestable, it can only be cancelled upon certain grounds. 15 U.S.C. § 1064.  Notable grounds that can no longer be asserted for cancellation include descriptiveness and likelihood of confusion.

Therefore, if the date on which you can file a § 15 Affidavit is relatively soon, you may want to wait until you file the § 15 Affidavit before sending a cease and desist letter. In fact, I have received cease and desist letters (or more accurately, my clients have) from the owners of arguable descriptive trademarks and junior trademark users who could have filed § 15 Affidavits within the next year, six months, or even sooner. Guess what I advise my clients? That's right — petition to cancel the mark (whether at the TTAB or through a federal lawsuit) because soon that opportunity will be gone. You don't want to be on the receiving end of a petition to cancel a registration that you could have prevented by waiting a few months, so check the time on incontestability when deciding whether to send a cease and desist letter.

Are You Using Your Mark in the Infringer's Geographical Area?

Before sending a cease and desist letter, consider whether you are using your trademark in the infringer's geographic market. In case you don't remember the DawnDonut rule, it basically stands for the proposition that a senior federal trademark registrant cannot obtain injunctive relief against a junior user if the senior registrant is not using its mark in the junior user's geographic market. Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d 358, 364 (2d Cir. 1959). A few years ago, I successfully opposed a preliminary injunction being sought against my client on the ground that the moving party was not using its mark in Las Vegas, Nevada. You can read my argument on pages 10-12 of the opposition brief here: Dawn Donut opposition brief. It was the Dawn Donut argument that the federal district court relied on to find the moving party had not established a likelihood of success on the merits and deny the motion for preliminary injunction. You can read the court's holding on the Dawn Donut rule on pages 4-7 of the court's order here: Dawn Donut order denying injunction.

don't be subject to the donut

Therefore, if you are not yet using your trademark in the infringer's geographic market but will be relatively soon, you may want to consider waiting until you have entered that geographic market. This will force you to consider whether you should expedite your plans to enter that geographic market if possible. By confirming that you are using your trademark in that geographic market, you won't put yourself in the potentially awkward position of attempting to having your enforcement efforts limited by the Dawn Donut rule.

Cease and Desist Logistics and Choice of Medium

This blog post is entitled "On Trademark Cease and Desist Letters," but you can demand that an infringer cease and desist in ways other than a letter. There are also strategic considerations when sending letters.

Reach Out and Touch Someone

The phone is an effective medium. Sometimes the written word comes across as unduly harsh. And there's no opportunity for free flowing discussion through letters. By calling the infringer, you can get a better sense of the infringer's motivations and priorities. If a cease and desist letter is going to follow, you can also let them know that you wanted to reach out before sending the letter to explore a resolution.

If a phone call is an option that your client is interested in, consider who should make the call. The parties are free to communicate directly with one another, and if there is no bad blood or temperament issues, then having the business people speak directly to each other can be very effective. Alternatively, if the infringer has counsel, the attorneys could communicate with each other initially by phone.

A phone call is a more effective tool when dealing with an infringer who does not respond well to threat or who can be reasoned with. It also can avoid putting a date in writing for purposes of laches (but the date of the phone call would presumably come out during discovery anyway). On the other hand, a phone call is often ignored or not taken as seriously as a cease and desist letter, requiring repeated follow-up by the trademark owner. Sometimes all that is accomplished is significant delay.

The First Cease and Desist Letter

The first cease and desist letter should contain all your main legal and factual points. Try to decide ahead of time whether you will be sending a second cease and desist letter (see next section). This will inform how much or how little to include in this first letter (e.g., maybe you include a draft complaint in the first letter if you are not going to send a follow-up letter). Make sure you include a specific date by which you need a response from the recipient.

Send a Second Follow-Up Cease and Desist Letter with a Draft Complaint

When a first cease and desist letter letter is ignored—whether no response is received or a response is received but the recipient refuses to cease infringing, many attorneys will send a second cease and desist letter. But just reiterating the same points that were made in the first letter rarely achieves different results. Therefore, if the trademark owner wants to send another letter to try to resolve the dispute short of litigation, I strongly recommend sending the second cease and desist letter with a copy of a draft complaint that will be filed if the recipient refuses to comply with the demands in the cease and desist letter. Sometimes this jolts a little reality into the recipient and actually helps settle the situation. However, be aware that sending a cease and desist letter with a draft complaint will subject you to a declaratory judgment if the recipient decides to initiate litigation. Accordingly, if venue is an issue, you may want to consider filing the draft complaint but not serving it. Then in the letter, you can actually provide a copy of the file-stamped complaint and let the recipient know that the complaint has already been filed and that you are giving the recipient one last chance to resolve the dispute before you serve it.

No Bush Beating, Just Lawsuit Filing

This can be really effective. No phone call, no letter. Just a federal trademark infringement complaint served on the defending infringer out of the blue. The trademark owner is perceived as a no-nonsense, action taker. No pussyfooting around. The infringer is less likely to push back against a trademark owner who won't be pushed around. Of course, it's an aggressive strategy that commits you to litigation from the start, so it's not a strategy that works for everyone.

Consider Marketplace Realities

Above and beyond the legal merits of your trademark infringement claim, consider whether there are marketplace realities that may obstruct your ability to enforce your rights, as well as realities that you can leverage to facilitate enforcement of your rights.

Relative Strength of the Parties

From a substantive legal point of view, someone is either infringing a trademark or not. It should not matter who that someone is. Well, that's the difference between theory and practice.

In theory, there is no difference between theory and practice. But, in practice, there is.

- Yogi Berra

If the infringer is a large company with deep pockets (maybe a Fortune 50 or Fortune 100 company), factor that into the equation. Litigation is very expensive and can be a war of attrition. Do you really have the resources to take on such a fight if the recipient forces your hand by ignoring your cease and desist or if the recipient files a complaint for declaratory relief against you? In such cases, put a strategy in place before you send a cease and desist letter.

Target the Personal Liability of Individuals

In On the Hook: Personal Liability for Trademark Infringement, I discussed an individual's personal liability for trademark infringement when that individual directs or participates in the infringement. If the infringer is an entity, try to identify the individuals behind the entity who are likely directing the trademark infringement on behalf of the entity and who are likely to be personally liable for the infringement. Make you send them a cease and desist letter too or a copy them on the cease and desist that you send to the infringing entity. Make sure the cease and desist letter explicitly informs the person that he or she will be personally liable for the entity's infringement regardless of the limited liability protection that the entity may provide in other contexts.

Copying Other Parties on the C&D

In addition to sending a cease and desist letter to the infringer, a trademark owner should consider whether to copy other parties involved in the distribution chain, such as manufacturers, distributors, or retailers. This will put those parties on notice. Depending on the factual circumstances involved, such parties may be liable if they are intentionally inducing another to infringe or continue to supply a product to someone they know is engaging in trademark infringement. If this is the case, you could consider sending separate cease and desist letters to those parties. If you can get the manufacturers, distributors, and/or retailers to stop working with the infringer, you are probably on your way to winning your battle with the infringer.

Shame, Shame, Shame

There's a lot of overreaching by trademark owners who vigorously enforce their trademark rights against marks that clearly don't create a likelihood of confusion among consumers. It's called trademark bullying and it's a real problem. Trademark bullying takes place through cease and desist letters, oppositions, cancellations, and lawsuits.

One way some alleged infringers fight back is by publishing copies of cease and desist letters on the Internet. This can sometimes create public backlash against the trademark owner. Usually—even if your cease and desist letter gets published, it's really not worth spending any time worrying about it—especially if your claims are legally valid and don't rise to the level of trademark bullying. But if you have a particularly sensitive client, you may want to discuss this possibility before sending out the letter.

Review Examples of Letters & Create Living Templates

If you're a trademark attorney, you probably already have a stockpile of trademark cease and desist letters. If you're a trademark owner looking for examples, just search the Internet and you'll find tons. Borrow what you like (try not to plagiarize) and leave what you don't to create your template cease and desist letter. You may also create a template for a follow-up second cease and desist letter. Consider these living documents that you continually revise over time. For example, my old cease and desist template used to contain language that I don't include anymore (e.g., assuming the infringement was unintentional) and didn't contain language that I now include (e.g., pointing out an individual's personal liability).

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