Our Company Received A Cease And Desist Letter. Now What?

Nobody wants to get cease and desist letter, but they happen and you need to be prepared.

For a business owner, few events are scarier than receiving a cease and desist letter (unless it’s this one from Jack Daniels).

If you’ve received one, you’ve probably experienced some panic, frustration, and probably been a little incredulous too. Once you get over the relative shock, however, it’s time to approach the matter head-on.

Your response will establish the remaining course of events that will take place to resolve the issue.

 

1. Check the claims in the cease and desist letter

First things first; check whether or not the cease and desist has any validity. If, for example, the letter’s author claims infringement of a trademark, compare yours and that the one in the claim.
 
The letter might also demand payment for some kind of infringement.

For example, plenty of companies that provide stock photography will ask for payment from businesses that have inadvertently used one or more of their stock photos. Before you pay up, check to make sure your site has the photo and if you are the liable party.

 

2. Call your business insurance provider

This might be the most important step. Most business insurance policies include coverage for matters that are included in cease and desist letters. If you ignore the letter or delay your response, that coverage may not be available. Chances are, if you contact your insurance provider you’ll keep legal costs down and save yourself a real headache.

 

Photo: © ASjack, YFS Magazine
Photo: © ASjack, YFS Magazine

 

3. Request more information

Part of verifying the sender’s claim means collecting as much information as possible. Let them know you are sincere about resolving the issue and do research at the same time by asking them to send you more info – make them send as much as possible, as a matter of fact.

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Most cease and desist letters come from attorneys who are representing another individual or business who believe that their rights are being infringed on by your business. For example, a company that owns a registered trademark might get a lawyer to send a cease and desist letter to you for using a similar trademark (or, in the parlance of trademark law, yours is “likely to cause confusion” with the sender’s mark).

 

4. Make a decision: comply or deny

At some point you have a choice to make: ignore the letter, or respond to it. If you respond, that response can be an acquiescence to the letter’s requests, a denial that you’ve made any offense, or some other compromise resolution.

 

Photo: YFS Magazine
Photo: YFS Magazine

Regardless of the nature of your response, it should open a channel of communication which could ultimately prevent a lawsuit.
 
Furthermore, your response might even establish a defense in the future if your accuser does ever file a lawsuit. If another company sends a cease and desist letter but then takes no follow-up action for an extended period of time, they may be unable to pursue their claims so far after the fact.

 

5. Bonus Tip: Don’t ignore it

Ignoring the letter is the riskiest action you could take, particularly if an attorney has written it. The letter will probably warn you that you could be sued unless you accept the other company’s demands.

You might be tempted to assume that the author is bluffing on this point, but if someone has contacted and presumably paid an attorney to write a cease and desist letter, that person is very likely ready to take the next step of filing a lawsuit.

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Nobody wants to get cease and desist letter, but they happen and you need to be prepared. A tiny bit of prevention and an intelligent and measured response to a will likely prevent potentially serious legal issues. Be sure to protect yourself.

 

This article has been edited.

Adam Hatch is a writer and editor at LegalTemplates.net, a legal documents company that strives to simplify the complex world of law and business for everyday people. His work has been featured on sites ranging from Patheos to RelativelyInteresting.com. When he’s not designing legal templates and writing overwrought satire, he’s likely reading, hiking, or exploring his city. Connect with @legaltemplate on Twitter.

 

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