You should send a cease and desist letter if someone is infringing on your patent or trademark. Otherwise, you will continue to lose money, and others will be emboldened to copy your product, further eroding your market share. However, various factors should be taken into consideration which may dictate the timing and tone of the letter.
How to determine if someone is infringing on your patent or trademark?
To determine if there is infringement, you need to assess your patent and trademark rights. You should hire a patent attorney who will let you know the strength of your case.
Do you have a strong or weak case? Don’t just find any attorney that will tell you what you want to know. You need someone to tell you what you need to know – the truth. You don’t want to get involved with litigation to find out later that you have a weak case.
You’ll be wasting your money. Also, you’ll be engaging in trollish behavior and gain a reputation as a patent or trademark troll.
For patents, you need to analyze your patent claims to determine the strength of your case. Often, patent owners believe that their patent is broader than it is. When in fact, it is narrow.
You can learn more about how to analyze your patent claims by reading my other articles.
- Basic Principles: How to avoid patent infringement?
- Basic claim analysis principles: Avoiding patent infringement?
For trademarks, you need to compare the similarity of the marks and the similarity of the goods. The closer the marks and the goods, the greater the chance that likelihood of confusion or trademark infringement exists. Other factors (i.e., DuPont factors) are also relevant. For example, if actual confusion exists, that is good proof that there is a likelihood of confusion among the public.
After your initial analysis, you should retain a patent or trademark attorney to verify your opinion. Infringement analysis is a complex process that requires a balancing of different factors. You may consider a fact minutia, but it could significantly impact the final infringement determination.
What other factors should you consider when sending a cease and desist letter?
Other factors to consider when sending a cease and desist letter include:
- What is your end goal in sending the cease and desist letter?
- What is the probability of success of stopping the infringer?
- What is the total cost of sending the cease and desist letter?
- What liability do you have for sending a cease and desist letter?
What is your end goal in sending the cease and desist letter?
Before you send a cease and desist letter, you need to identify your end goal of sending the cease and desist letter. Do you want the infringer to pay damages? Do you want the infringer to just stop infringing? Do you want them to publicly apologize? Are you willing to extend a license to the infringer?
However, what if that does not happen? Will you spend the money to litigate your Patent and Trademark rights?
Depending on your end goal, the tone and content of the letter will change.
What is the probability of success of stopping the infringer?
A cease and desist letter is just that, a letter. It isn’t a court order. The infringer can ignore your letter. In that case, the letter didn’t achieve its end goal. This is why retaining the proper intellectual property council to analyze your situation and give you their honest opinion is valuable. They should tell you their honest assessment. If you have a bad case, they will tell you it’s not worth sending the letter.
You could spend thousands and hundreds of thousands of dollars if their assessment of infringement is overly optimistic. You could also lose the opportunity to stop an infringer by giving up too early if their estimate of infringement was too low.
What is the total cost of sending a cease and desist letter?
The actual cease and desist letter is inexpensive. However, doing the due diligence and the infringement analysis costs the most initially. Moreover, after sending the cease and desist letter, the continual back and forth with opposing counsel and the client takes up a significant amount of time and money. As such, even the beginning interactions with opposing counsel could be a few thousand dollars at a minimum.
What liability do you have when sending a cease and desist letter?
You need to be aware of certain risks when sending the cease and desist letter.
For example, if you threaten the infringer with a lawsuit, they could file a declaratory judgment (i.e., DJ) action against you. The DJ action asks the court to resolve the dispute between you and the infringer. Although you may have wanted to send only the cease and desist letter but not be involved in litigation, the infringer is making that choice for you. They are dragging you into litigation because of your cease and desist letter.
There is always a possibility of the DJ action, but it does not occur in many instances.
Another risk in sending a cease and desist letter is being accused of tortious interference with a business contract. If you send the cease and desist letter to companies that the infringer does business with, you may be perceived as interfering with the business contract between the infringer and other people.