Cease and Desist Letters and When They Can Backfire: A Guide for Business Owners

by Ian Aldridge Lawyer

As a business owner, you may have encountered a situation where you feel someone is infringing on your intellectual property rights or using your brand without permission, or defaming you personally and/or your business.

In such cases, sending a cease and desist letter to the offending party may seem like the appropriate course of action. However, these letters can sometimes backfire, leading to legal disputes, negative publicity, and reputational harm. In this article, we will discuss what a cease and desist letter is, when it may be necessary, and the potential pitfalls to avoid.

What is a Cease and Desist Letter?

A cease and desist letter is a formal communication sent by a legal representative to an individual or entity that is believed to be engaging in behaviour that is illegal or infringes on the rights of the sender. The letter typically demands that the recipient immediately cease and desist from the offending behaviour or face legal consequences.

When is a Cease and Desist Letter Necessary?

A cease and desist letter may be necessary in various situations, including:

Intellectual Property Infringement

If you believe someone is using your trademark, copyright, or patented invention without permission, a cease and desist letter may be necessary to stop the infringement.

Defamation

If someone is making false statements about you or your business that are damaging your reputation, a cease and desist letter may be necessary to demand that they retract their statements.

Harassment

If someone is engaging in harassing behaviour towards you or your employees, a cease and desist letter may be necessary to demand that they stop.

When Can a Cease and Desist Letter Backfire?

While a cease and desist letter can be an effective tool for stopping unwanted behaviour, it can also backfire in several ways. Here are some common pitfalls to avoid:

Sending a Letter without a Legal Basis
Sending a cease and desist letter without a legal basis can be seen as a form of intimidation or harassment. This can lead to negative publicity and legal consequences for the sender. Before sending a letter, ensure that you have a legal basis for doing so.

Using Threatening or Abusive Language

A cease and desist letter should be professional and polite. Using threatening or abusive language can be counterproductive and may lead to a hostile response from the recipient.

Ignoring the Recipient's Response

If the recipient of a cease and desist letter responds in a way that suggests they are willing to negotiate or settle the matter, it is important to engage with them in good faith. Ignoring their response or refusing to negotiate can escalate the situation and lead to legal disputes.

Commencing Litigation Proceedings Prematurely

A cease and desist letter is often the first step in a legal dispute. However, filing legal proceedings too quickly can be counterproductive. It is important to exhaust all possible avenues of negotiation before resorting to litigation.

Not Considering the Cost-Benefit Analysis

Before sending a cease and desist letter, it is important to consider the cost-benefit analysis. The cost of sending a letter and potentially going to Court should be weighed against the potential benefits of stopping the offending behaviour.

Another point to consider is whether by sending the cease and desist letter, it may not achieve the desired objective and actually make the situation worse.

A specialist lawyer will be able to assess this with you and go through the risks and potential benefits/costs and dangers. In most cases, sending a cease and desist letter is strongly advised from an intellectual property perspective or defamation, however there are a few instances where this may be either counter-productive or even backfire.

Conclusion

Cease and desist letters can be an effective tool for stopping unwanted behaviour that infringes on your intellectual property rights or damages your reputation. However, they can also backfire if not handled carefully. By understanding the potential pitfalls and following best practices, you can use cease and desist letters effectively and avoid legal disputes, negative publicity, and reputational harm.

Author: Ian Aldridge has almost 20 years experience in providing legal advice to SMEs both in Australia and in the UK. He founded Progressive Legal in 2014 with a NewLaw view of providing better services to growing Australian businesses. He is passionate about protecting them and their owners and has a wealth of experience.