Cease & desist letters
We have extensive experience in drafting letters of demand, identifying potential risks, responding to an alleged infringer and giving practical advice on how to protect your business from future infringement. As the owner of intellectual property, you have various legal and enforceable measures available under the law that allow you to take effective action against any person or business that infringes your rights, including:
- send a letter of demand
- try to negotiate to settle the dispute out of court
- propose formal mediation of the dispute with a mediator
- start litigation proceedings through the court.
What is a letter of demand?
A letter of demand is used by a rights holder to put infringers on notice – to inform them of your intellectual property rights and demand they take certain steps. It may include:
- an assertion that the rights holder is the owner of the IP or authorised to use it
- information about the rights granted under various IP legislation
- supporting documentation for the claim, including details of any registrations
- details of the offending action
- the legal remedies available to the rights holder to remedy the offending action
- a request for documents, including an accounting of profits in respect of the infringing action
- a demand that the alleged infringer take certain steps, including the provision of undertakings
- a deadline for the demands to be met
- an assertion that if the demands are not met by the deadline, the rights holder will start litigation proceedings
A letter of demand is often the first step to put another party on notice of the potential consequences of their actions. Many disputes can be resolved with a simple ‘cease and desist’ letter, but you must consider it carefully before sending. By sending a cease and demand letter, you may expose yourself to a claim from the recipient – or any person aggrieved by the threat – that it amounts to a ‘groundless threat’ (i.e. that you have no grounds for making the threat).
In Australia, a letter of demand constitutes a threat on the basis that it asserts to the alleged infringer that the complainant has a right, that the offending action has infringed that right, and that serious consequences will follow if the demand is not met, because the rights holder will start litigation proceedings (or the language of the letter suggests this consequence).
It’s important to determine whether there has actually been a legal infringement, because threatening someone of an infringement gives rise to serious consequences. The threat of litigation proceedings against another gives rise to a cause of action available to the alleged infringer because the Trade Marks Act, the Copyright Act, the Designs Act and the Patents Act all have provisions against groundless threats. They may seek relief from the court, including a declaration that you have no grounds for making the threat, an injunction restraining you from continuing to make the threat, and an order for recovery of any damages sustained because of your actions and demands.
Civil Dispute Resolution Act 2011 (Cth) (‘Act’)
The Act applies to proceedings commenced in the Federal Court of Australia or the Federal Magistrates Court. It requires that a person (and their lawyer) make a genuine attempt to resolve the dispute before commencing litigation proceedings:
- they must file genuine steps statements in the court, setting out each and every step they have taken to resolve the dispute, otherwise the court may take into account any failure to do so when exercising its discretion in awarding costs
- the lawyer must inform their client of this requirement and help them comply with it, otherwise s/he risks personal cost consequences which are not recoverable from the client
What are genuine steps?
Section 4 of the Act gives examples of what is considered a “sincere and genuine” attempt to resolve the dispute, including:
- notifying the other person of the issues that are or may be in dispute, and offering to discuss them in a way that resolves the dispute
- responding appropriately to such a notification
- providing relevant information and documents to the other person to help them understand what the issues are and how they can be resolved
- considering whether the dispute could be resolved by alternative dispute resolution or a different process
- trying to negotiate with the other person to resolve some or all of the issues in the dispute
IP enforcement as a strategy
- Never send a letter of demand without properly assessing the ownership and enforceability of your own IP rights.
- Properly assess the alleged infringement and the grounds for it, at law, and whether there is evidence of it.
- Evaluate what defence or counter claims the alleged infringer might have.
- Make a genuine attempt to resolve the dispute without resorting to litigation proceedings.
- Be sure you’re serious about and willing to accept the risks of litigation proceedings if the alleged infringer doesn’t respond or refuses to take any of the steps demanded in the letter of demand.
- The commencement of any litigation proceedings is part of an overall IP litigation strategy.