How to Handle a Cease-and-Desist Letter

Receiving a formal letter from an attorney can be unsettling, especially when it includes the phrase “cease and desist.” A cease-and-desist letter is a formal notice demanding that you stop a specific activity, usually related to intellectual property infringement, breach of contract, or defamation. It serves as a warning that legal action may follow if you fail to comply.

While it’s not a court order, this type of legal notice should always be taken seriously. How you respond can significantly impact your business, finances, and reputation. A prompt, strategic response can often de-escalate a situation and prevent a costly lawsuit. On the other hand, ignoring it can lead to significant legal and financial consequences.

At Emerson Thomson Bennett, our practice is focused entirely on intellectual property law. Our experienced attorneys regularly help clients navigate the complexities of these disputes, from trademark and copyright infringement to trade secret misappropriation. Our guide will walk you through the essential steps to take if you receive a cease-and-desist letter.

Immediate Steps to Take

Upon receiving a cease-and-desist letter, your initial actions are critical. The choices you make in the first few hours and days can set the tone for the entire dispute.

1st: Do Not Panic, But Act Quickly

It’s natural to feel anxious when receiving a legal notice. However, panicking can lead to rash decisions. Remain calm, but recognize the urgency. A cease-and-desist letter typically includes a deadline for response, and failing to meet it can be interpreted as a refusal to cooperate, potentially escalating the conflict. The first and most crucial step is contacting an attorney, not responding directly to the sender.

2nd: Consult an Experienced Attorney

This is the most important step you can take. Do not attempt to handle the situation on your own. You should seek legal counsel from an attorney experienced in the specific area of law related to the dispute. For example, if the letter alleges trademark infringement, you need an intellectual property lawyer.

An experienced attorney can:

• Assess the claims: They will review the letter to determine if the sender’s claims have legal merit and whether you have any valid defenses.
• Explain your options: Your lawyer will help you understand your rights, potential liabilities, and the best course of action.
• Formulate a response: They will craft a professional, strategic response that protects your interests and avoids making any admissions that could be used against you later.

Assessing the Cease-and-Desist Letter

Once you have legal counsel, your attorney will analyze the letter itself. A thorough assessment is key to developing an effective strategy. 

Is the Sender the Actual Rights Holder?

First, verify that the sender has the legal standing to make the demand. For instance, in an intellectual property dispute, the sender must own the copyright, trademark, or patent they claim you are infringing upon. 

A letter from someone without the proper authority may not be enforceable. Your attorney will investigate the sender’s claims to ensure they are the legitimate rights holder.

What Is the Factual Basis for the Claims?

Carefully review the specific allegations. The letter should detail the actions they believe are unlawful and provide evidence to support these claims. Vague or speculative accusations may indicate a weak case. For example, if intellectual property is mentioned, the letter should include relevant registration numbers that can be verified.

Scope and Specificity of the Demand

The demands made in the letter must be specific and reasonable. Overly broad demands — such as asking you to shut down your entire business over a single product dispute — may be a negotiating tactic or a sign of an unsubstantiated claim. A legitimate letter will clearly outline the exact actions you are expected to stop.

Responding to the Legal Notice

After assessing the letter with our attorney, it’s time to decide on a response. Ignoring the letter is never a good option.

Do Not Ignore the Letter

Ignoring a cease-and-desist letter is one of the worst things you can do. It can lead directly to a lawsuit and signal to the other party that you are not willing to resolve the issue amicably. A timely response, managed by your attorney, opens the door for negotiation and can prevent further legal action.

Possible Responses

Your attorney will help you choose the best response based on the situation:

• Ceasing the Alleged Infringement: If the claims are valid and the risk of litigation is high, the most prudent course of action may be to comply with the demand. This can resolve the matter quickly and with minimal cost.
• Challenging the Claims: If you and your attorney believe the claims are unfounded, you can send a response challenging the allegations with supporting facts and legal arguments. This response should be carefully crafted by your lawyer to avoid escalating the conflict unnecessarily.
• Negotiating a Settlement: In many cases, a middle ground can be found. It may be possible to negotiate a settlement, such as a licensing agreement that allows you to continue the activity in exchange for a fee.

Document Everything

From the moment you receive the letter, keep meticulous records of all communications, actions taken, and evidence gathered. This documentation is invaluable and can be critical if the dispute proceeds to litigation. Refrain from discussing the matter on social media or with anyone other than your legal counsel.

Potential Consequences of Ignoring a Letter

Failing to respond to a cease-and-desist letter can have severe repercussions for your business.

Risk of a Lawsuit

The most immediate risk is that the sender will file a lawsuit. Litigation is expensive, time-consuming, and can drain your business’s resources. Addressing the letter promptly is almost always more cost-effective than defending a lawsuit.

Preliminary Injunction

The rights holder may seek a preliminary injunction from a court. This is a temporary court order that would force you to halt the disputed activity immediately while the case proceeds. An injunction can disrupt your business operations and cause significant financial harm.

Monetary Damages

If you lose a lawsuit, you could be ordered to pay monetary damages. These can include the other party’s lost profits, any profits you gained from the infringement, and, in some cases, their attorney’s fees.

Protect Your Business with Skilled Legal Counsel

Navigating a cease-and-desist letter requires a calm, strategic approach guided by legal expertise. The most significant mistake you can make is responding without consulting an attorney. Anything you say or write can be used against you, and an emotional or poorly-worded response can worsen the situation.

If you have received a cease-and-desist letter, especially one concerning intellectual property, the attorneys at Emerson Thomson Bennett are here to help. Our team has the experience and knowledge to assess the claims, protect your interests, and work toward the best possible resolution. Contact us today to develop a strong defense.