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Receiving any legal demand or correspondence can be alarming. You should always deal with these promptly and seriously, or you may risk further legal consequences. That is the case if you receive a cease and desist letter claiming you have infringed another party’s intellectual property rights. This letter may demand you stop the infringing or illegal action. Whether the claim is a surprise or whether it relates to a prior dispute, you should take quick action to consider and respond to matters raised in any cease and desist letter. This article will explain the meaning and possible consequences of a cease and desist letter. It will also guide you through the steps to respond if you receive one.

What Is a Cease and Desist Letter?

A cease and desist letter that relates to intellectual property is sent by a party that claims you, or your business, are infringing that party’s intellectual property rights in some way.

For example, the letter may claim that you are using the other party’s registered trade mark or a photographer’s copyrighted photo on your social media platforms. The letter will usually set out details of the intellectual property it owns, then describe the way in which you are infringing those rights. It will then demand that you ‘cease and desist’, or stop, that conduct, and if you fail to do so, it will threaten legal proceedings. The letter may also ask that you give an ‘undertaking’ or signed agreement not to further infringe that party’s intellectual property rights in any way in the future. 

Court actions for infringement of intellectual property rights are expensive and complex. If successful, they can result in orders that you pay the other party damages.

Options To Respond

Most cease and desist letters will include clear deadlines for a response. This includes a time when any infringing conduct must stop. It also includes any other steps you must take to remove any damaging content.

It is important to act quickly before the other party issues any legal proceedings. After this, they will be able to claim legal costs from you.

If you receive a cease and desist letter in relation to IP rights, you should take the following steps:

Review the Material 

Take the time to read and consider a cease and desist letter carefully. Make sure you understand the claim made against you and whether the claim is correct.

For example, did you create or cause the offending or infringing conduct or material? 

Obtain Legal Advice

The consequences of infringing another party’s intellectual property rights, or failing to comply with a cease and desist letter, can be serious and expensive. You should seek legal advice if you are unclear about the meaning of any claim or how to respond.

Cease and desist letters are often sent without proper grounds. Parties do this to place pressure on a party to respond. It is, therefore, important to understand whether any actions by you are a legal infringement.  

Prepare a Response

Once you have reviewed the letter and obtained advice, there are a number of ways you can respond to the letter. These include:  

  1. accept and comply: If you agree with the letter, you should promptly comply with any requests. Similarly, if the conduct can be easily remedied and doing so will have minimal impact on your business, you should take immediate steps to remove any offending material and stop the offending conduct;
  2. no response: If you are confident the cease and desist letter is making an unfounded allegation, you may choose to ignore the letter. If your assessment is not correct, you may be exposed to legal costs. It is, therefore, worth getting legal advice to clarify your legal position if you have any concerns; or
  3. deny and defend: If your legal advice confirms the claim is unfounded, you can respond by letter to deny the allegation and provide further reasoning. This will depend on the facts. Depending on the circumstances of the matter, it may require some legal interpretation and explanation in the letter. 

Negotiate

If the dispute continues and there is a risk of legal proceedings, you should consider negotiating with the other party. This will avoid the cost and stress of litigation. Depending on the circumstances of the matter and any legal advice you receive, this may involve you making a compromise of some sort.

For example, an agreement to limit the infringing conduct in some way. You could also possibly make a payment to the other party. 

Key Takeaways

You should take seriously any cease and desist letter that claims you are infringing another party’s IP rights. The legal consequences and potential damages a court may order that you pay can be substantial. On the other hand, many people use cease and desist letters incorrectly, without property understanding of their intellectual property rights or whether your conduct is an infringement of that. It is important to get legal advice if you have any concerns about the letter, and you should always act promptly to respond and meet any deadlines in the letter, to avoid further costs or legal proceedings. If you have any questions about cease and desist letters or your legal position in relation to an intellectual property dispute, contact LegalVision’s litigation or intellectual property lawyers on 1300 544 755 or fill out the form on this page.  

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