Don’t panic! What to do if you receive a cease and desist letter
Of course every business should undertake trademark clearance searching before launching a brand, but not every small or start-up business understands why – until they receive a cease and desist letter demanding that they change their branding. Vanessa Harrow offers some advice.
It’s a familiar news story: a small business has been forced to change its branding after ‘legal threats’ from a larger, established and IP savvy business. In this instance, a Manchester restaurant that has had to remove the letter ‘K’ from its window this month following a ‘legal threat’ from an unnamed source.
As unfair as such cease and desist letters may seem to the layperson, IP professionals understand the context of such action, and the importance to brand owners of defending their trademark rights. But, what should a small business do if it receives a legal threat in the post?
How to react to a cease and desist
The first question to answer is whether the sender is asking you to do something you are happy to agree to do.
- If yes, you can agree to their request. However, care should be taken to ensure you do not admit liability while doing so. For instance, you could answer by saying: “While we dispute X, in the interest of a quick resolution, we are prepared to agree to Y”. Ideally, such correspondence should be not only marked, but also maintained as ‘without prejudice’ to ensure you do not prejudice your position (true without prejudice correspondence cannot be used as evidence). Where possible, it is also advisable to enter into a formal settlement agreement with the other party, in order to ensure that taking the proposed action will indeed be the end of the matter. Here, you would be advised to speak to a trademark attorney for support.
- If your answer is no, there are a number of options you could (and businesses routinely) take:
1) Ignore the correspondence – please note, however, that there is a risk that the sender will choose not to send a reminder, but instead take you straight to court. The UK courts have pretty strict rules on pre-action conduct and the parties are generally required to try and resolve the matter amicably. It is likely, therefore, that further pre-action correspondence will be sent; however, this will depend on the case, the nature of the first letter and the attitude of the sender.
2) Respond with a simple dismissal of the case – again, there is a risk the counterparty could then simply push ahead with court action.
3) Respond with a counterproposal – as noted above, be sure to avoid admitting liability and to maintain this correspondence on a without prejudice basis. The counterproposal should also be aimed at genuinely trying to find a workable solution.
In any of these scenarios, it is recommended to seek advice from an accredited trademark attorney, so as to assess the validity of the claim, to consider any potential defences, and to discuss the options and strategy for moving forward. Due to the complex nature of IP law and the rules around pre-action conduct, taking legal advice is advisable in order to ensure you do not do anything which could otherwise prejudice your position and potentially lead to more serious issues down the line.
Prevention is better than cure
Of course, you will also find yourself in a stronger position if you are already aware of your IP rights, including taking the necessary steps to protect your chosen brand.
- Pre-check for conflicts
When developing a new brand or expanding an existing brand into a new market, one of the first steps should be to conduct clearance searches to consider freedom (or availability) to use your chosen name or branding.
Beyond the potential liability for damages, being forced to rebrand following legal action by a third-party with prior rights can be a very costly exercise. Steps should be taken to manage the risks of conflicts when launching a new brand therefore.
Clearance searches will enable you to assess the potential conflicts with third party rights and take proactive steps to mitigate the risks. Whether you are opening a small independent business based in just one part of the UK or whether you are creating a global brand with plans for worldwide expansion, checking availability to use your brand in your chosen markets should be a critical part of your launch strategy.
- Protect and enforce your brand
Once you have cleared the brand, the next step should be to secure registered protection. Enforcement of a registered right is generally more straightforward than relying on unregistered rights. Registered trademark protection will not only help you protect the distinctiveness and strength of your brand, but also provide a means to enforce your IP against third parties.
Once trademark registration has been obtained, consider trademark watching to monitor and enforce against any attempt to encroach on your brand.
- Get in touch if you need advice
Of course, very few small businesses (or restaurants) will have the IP knowledge or expertise in house, which can make receiving a cease and desist alarming. So too, can discovering that another business has ripped off your name or branding. In both instances, the best course of action is to take advice from an accredited trademark attorney to establish your position and your best course of action.
Please don’t hesitate to get in touch with us below if you need further insight or support.
Vanessa Harrow is the Head of Trademarks and a Chartered Trademark Attorney at Novagraaf in the UK.