Long gone are the times when we had pen friends whose letters we would look forward to receiving. If you are reading this, you have likely been on either a giving or receiving end of a cease & desist letter. You scratched your head in hope of finding the right words to communicate with your unsolicited pen friend. There are multiple articles advising on how to deal with such a letter (the majority screaming: do not ignore it and consult a lawyer! – rightly so, may I add…) However, it is the drafting of a Cease & Desist letter (C&D) that needs more thought to it, especially from the perspective of possible consequences and in view of your general IP enforcement strategy.
Receiving a C&D forces us to be reactive. When we send one, we have to be proactive. We have to think of multiple scenarios that can occur, multiple angles to consider, some of those extending well beyond just the legal framework. We need to take into account our public image, partner relationships, even fit with our corporate values and employees retention. Should we be aggressive from the get-go or maybe start with a friendly letter offering an amicable resolution?
I took part in a brilliant session during the World Trademark Review event on the 28th of January and one of the roundtables (led by @David Llewelyn, thanks!) ended up creating a superb list of recommendations for IP enforcement strategy which I summarise into an easy to remember “5-C strategy” below. Regardless if you are a startup, a corporate or an IP lawyer, I think the 5 points below could be applied to and considered for any C&D situation.
Who is the infringing party? Are they your client / partner? Are they an influencer with a large following? Are they a small startup likely unaware of their wrongdoing?
Not all trespassers should be treated the same way. You should always consider your actions from the perspective of the worst possible outcome (lawyers’ specialty). If your partner / distributor / supplier misused your brand, you will likely gain more by offering education in your brand guidelines than sending them a draft of a claim form… Similarly, in a “David and Goliath” situation, a too strongly worded letter might create a PR backlash which we will discuss further.
2 – Costs
How much will we need to invest? How likely will we recover the costs? How efficient is the proceeding?
If you open Pandora’s box, make sure you are ready for it and you are ready to follow through. It is the risk vs reward calculation as enforcing your rights for the sake of doing it, without the clear way forward can be a costly exercise.
Make sure you understand the implications, timeline, documents needed, costs and stages of any proceeding you are getting yourself into. Nobody likes to guesstimate but you should be asking as many questions as you need to understand the full picture. It is sometimes better to pay for the initial advice and step back from the proceeding if the evaluation proves it to be an ineffective way of enforcement of your IP rights. Paying e.g £500 at the start without a result suddenly sounds much better than sinking £200,000 without any result either…
3 – Chances of success
What are the chances of getting a response? Are you prepared to deal with the response and negotiate? How likely is it that you are going to win?
We have all seen letters which we replied to and the sender disappeared. Is there a point of sending a letter if you are not willing to invest in the next step? Two things to consider:
- the concept of unjustified threats;
- you might strip yourself of the opportunity of bringing the claim at a later stage if you do not follow through the first time around.
4 – Culture
Would your letter pass the “Daily mail” test? Are you prepared for the PR backlash?
The horror of any IP practitioner – your cease & desist letter landing on social media, going viral (chapeau bas to Netflix on this point! – Click here). Be specific, to the point. Read your letter in 3D: as a sender, as a receiver and as a bystander. Make sure nothing can be misconstrued or taken out of context. Had your letter been published in a newspaper, would you still stand by your demands and be happy for your name to accompany the article? Be prepared that the cost of a PR backlash might be your employee retention. Some might not want to be associated with a company that nurtures culture that they disagree with.
5 – Consistency
What is your IP enforcement strategy? What is your goal? What is your bottom line in negotiations? How do you approach different parties?
Take all the points above and create a methodology. Start with a list with categories of different parties you have been facing in enforcement to date and set a plan of actions and how you escalate the issue gradually with each category. You can also take the opposite approach, focusing on how you step down from the initial demands and what your bottom line is. Make it clear to your enforcement team on what you consider a critical issue and what merely needs monitoring to see how it progresses? Leave enough breathing room to make decisions that fall beyond your methodology but be sure any such decision follows the general guideline and you can justify taking or not taking an action. The worst you can do is make inconsistent choices that in turn might weaken your brand as your infringement boundaries become muddled and decisions unforeseeable.
For those on a receiving end of cease & desist letters, the above list might help you understand the reasoning of your sender. It might feel like you are being bullied by a big brand but you are likely part of a big strategy and they cannot let you off without a warning as that would trigger an avalanche of others hopping on the same bus.
We will definitely prepare an article advising how to deal with a cease & desist letter but not a strategy. If you regularly receive cease & desist letters, you likely need a good clearance search / trade mark advice, not a strategy. Get in touch!