Cease & Desist: A Cautious Path to Walk

by Abha Kashyap Managing Patner

Misrepresentation and misuse of trademarks without lawful authorisation from the IP owner is common in the trade. In view of this rising menace and its timely prevention, trademark owners’ resort to the means of sending Cease & Desist Letter (hereinafter referred to as C&D letter) to the potential infringers, prior to approaching the court of law.

When you receive a C&D letter, it is very important to have a strong plan of action. Allegation of trademark infringement are very serious and, if true, can come with serious repercussions. Here are key steps to take when you receive a C&D letter to avoid prematurely curbing to the demands of someone trying to prevent you from using your trademark.

Take a Reality Check

There are businesses and individuals who find attorneys to send C&D letters based on the misinformed notion that they have the legal rights to a trademark they never registered or used in commerce. Some Companies send cease and desist letters as scare tactics. Don’t fall for it without performing your due diligence.

Read the letter and look to see what rights the sender claims to possess and take note of the listed trademarks they refer in the letter. If the sender legitimately has legal trademark rights, the bedrock of any legitimate trademark dispute, they will likely list the literal elements of the trademark and the Registration or Serial number issued by the Trade Marks Registry.

Consult a Trademark Attorney

Always take the receipt of a C&D letter seriously. It is the precursor to a lawsuit being filed against you if one has not already been filed. Gather as much information as you can regarding the allegations made in the letter, take inventory of what acts may have led to the receipt of this letter and organise this information so that you can have a productive conversation with a trademark attorney about the C&D letter. Your attorney will be able to provide you with guidance on the most efficient and effective way to move forward, and provide a formal response to prevent a lawsuit from being filed or conversely prepare a defence for an infringement lawsuit.

Suit for Groundless Threats

IP law provides for means by which the IP rights may be effectively enforced against infringement; however, this can be misused by many to supress competition. A mere threat of infringement proceedings may cause damage to a business, since many parties may not go to the length and expense of litigating an infringement suit. To curb such situations, the IP law has provisions to prevent any person from making indiscriminate threats of infringement proceedings against others. If you find the C&D letter a nuisance and a groundless threat which is causing unwarranted damage to your brand and business, the you can initiate a suit for groundless threats against the sender of the C&D letter in a competent court. A threat becomes groundless when one party threatens another party with legal proceedings without having a basis for the threats. For example, if a threat to sue for infringement has been made where there has been no infringement, or the trademark itself is invalid, the threat is said to be groundless.

Section 142 of the Trademark Act, 1999 allows the receiver of the C&D letter to file a suit for groundless threat and obtain a declaration to the effect that the threats are unjustifiable, an injunction against the continuance of the threats and recover such damages as he has sustained. Provided it is proved that the threat is groundless.

If you ever find yourself on the receiving end of a C&D letter, investigate whether the letter itself is based on legitimate trademark rights, engage the services of a good lawyer to provide measured response to the letter, and calculate your desired outcome. Applying this methodology will ensure that you do not fall prey to third-party bullying, or prematurely stymie your ability to market your brand and grow your business – stand strong and have a measured, planned response.

Originally posted on www.kpalegal.com on 1 May 2020