“Stop Doing That and Never Do It Again”: When to Send a Cease and Desist Letter
You just discovered that you or your business are the subject of defamatory content on the internet. Or a former employee has started poaching your customers or begins working for a competitor in breach of a non-solicitation/non-compete agreement. Perhaps you are being repeatedly harassed by someone. What if a competitor starts infringing on your intellectual property rights? Should you send a cease and desist (“C&D”) letter? Read on to find out when and why sending a C&D letter might be a good idea some of these situations.
What is a C&D letter? All well-drafted C&D letters have three things in common. First, most C&D letters will assert or at least identify a set of rights that belong to the sender; these rights can arise under contracts, applicable laws, or both. Second, the letter should explain how the recipient’s conduct allegedly violates those rights, and potentially also mention how the sender became aware of the alleged violations. Finally, the third and most important component of a C&D letter is, of course, a demand that the recipient cease (i.e., stop doing) and desist (i.e., never do again) the misconduct that the letter identifies as being violative of the sender’s rights.
While a C&D letter can also contain a number of other items (e.g., a demand for compensation, a notice of document preservation obligations, a proposal to enter into a licensing agreement, evidence substantiating the sender’s assertion of rights and/or the recipients alleged violation of those rights, etc.), the above three elements are the core components of any well-written C&D letter.
Notably, sending a C&D letter does not in and of itself suffice to establish the validity of the sender’s rights. These are legal issues that may ultimately need to be resolved through other, costlier means, such as mediation, arbitration or litigation. However, C&D letters present an early opportunity for the parties to resolve their dispute before it escalates that far.
Is sending a C&D letter necessary before filing a lawsuit? No, it is not necessary but, as mentioned above, a C&D letter alerts the recipient that certain actions have and continue to violate the sender’s rights, and/or that said actions have and continue to cause the sender to suffer damages. In other words, a C&D letter can notify the recipient of a potentially very serious dispute that may escalate to the filing of a lawsuit, but it first gives the parties a chance to see if they can settle the matter amicably. For example, if a claim alleged in a C&D letter gives rise to a relatively small amount of damages, then there is a better chance that the parties will be able to work it out between themselves, which lets them avoid expenses like court costs and attorneys’ fees.
Although it is not strictly necessary to send out a C&D letter before filing a lawsuit, some kinds of claims can have more teeth if the plaintiff can show that the defendant had knowledge that certain conduct was wrongful, violated the plaintiff’s rights, and/or otherwise resulted in damages. A C&D letter might help the plaintiff prove that the defendant had such knowledge in any future lawsuit.
For example, a plaintiff alleging an IP infringement claim might use a well-written C&D letter to prove that the defendant knew that its conduct infringed on the plaintiff’s rights. If the defendant continues engaging in that conduct after receiving the C&D letter, then the plaintiff has a better chance of showing that the defendant’s continued infringement was “willful.” In willful infringement cases, some courts have discretion to increase a damages award by up to three times the amount of actual damages found or assessed. See35 U.S.C. § 284; see also In re Seagate, 497 F.3d 1360, 1371 (Fed. Cir. 2007). In these kinds of cases, it can be very worthwhile for the plaintiff to send out a C&D letter before filing suit.
When should I send a C&D letter? As soon as you discover that your rights are potentially being violated, it may be worthwhile to first try reaching out to the violator informally, depending on the circumstances. Sometimes, a simple phone call can be appropriate to clear up a misunderstanding between the parties. However, if an informal attempt to resolve the dispute fails, then a formal C&D letter can always be sent later to reiterate just how seriously the sender regards the recipient’s misconduct.
Should I contact an attorney?If you have questions or concerns whether a sending a C&D letter might be appropriate in a given set of circumstances, you should contact an attorney. If properly drafted, a C&D letter can help the parties resolve the dispute amicably before a lawsuit gets filed, and/or it can also be a prudent first step to take in anticipation of filing a lawsuit. You should contact an attorney for additional information regarding the usefulness and advantages of C&D letters in the various kinds of disputes that can arise under different areas of the law.