Canada’s Intellectual Property Firm

IP Insights

Steps to consider before sending a cease-and-desist letter

Authored byLaura Easton

The intellectual property (IP) of your business has value. IP can take several forms, including patent and trademark registrations, or intellectual property rights arising from common law, such as trade secrets, confidential information, or unregistered trademarks.

If you believe that another person or company has used your IP without your permission, one of the earliest actions you may take is to send the unauthorized user of your IP a cease-and-desist (C&D) letter (also known as a “demand” letter). A C&D letter typically demands that the recipient stop (cease) doing something now and avoid (desist from) doing it in the future, or risk being sued. C&D letters may be used to preserve the sender’s rights and try to avoid expensive litigation. 

Stop and consider these four steps before communicating with an unauthorized user of your IP:

  1. Consult an intellectual property lawyer.
  2. Evaluate the merits of your claims.
  3. Assess the value of sending a C&D letter.
  4. Consider the content of your letter.

1. Consult an intellectual property lawyer.

It is important to consult with experienced intellectual property (IP) litigation counsel before sending a C&D letter to an unauthorized user of your IP.  In particular, seek out counsel from an IP lawyer with expertise in the specific area of IP you believe is being misused or used without your permission.

Consulting with a specialized IP lawyer will help you evaluate several important considerations, including:

  • What is the strength of your claim?
  • Is there a risk that your letter could negatively affect your rights?
  • When and how should communication with the unauthorized user be made?

2. Evaluate the merits of your claims.

Before sending a C&D letter, you should gather all relevant facts and discuss with an IP lawyer the merits of all possible claims, including a consideration of the following factors:

  • Scope of Rights. Identify the scope or extent of your rights in the IP before asserting it against others. Make sure that you are the rightful owner or licensee of the IP before sending a C&D letter to enforce your rights.
  • Priority of rights. It is very important to confirm that the receiving party does not have rights to the IP that pre-date your rights (often referred to as “prior rights”).
  • Possible Counterclaims. Consider whether the recipient has any defences or counterclaims, including any which may challenge the validity or enforceability of your IP.

3. Assess the value of sending a C&D letter.

It is important to evaluate with experienced IP counsel the possible risks of sending a C&D letter. Where such risks include a potential that your IP will be invalidated, you may prefer an alternate course of action. In other cases, there may be concern that a C&D letter could result in the receiving party commencing litigation before you do in a forum that is less desirable to you, or in the receiving party destroying important evidence of the wrongful conduct. In these cases, you may be better off starting litigation immediately without first sending a C&D letter.

4. Consider the content of your letter.

IP C&D letters should be drafted or reviewed by an IP lawyer. However, depending on the circumstances and the desired tone, the C&D letter can come from the IP owner, internal counsel or an officer of the company, or external IP counsel.

The tone of your C&D letter can also be shaped through the content of your letter. When adopting a more or less aggressive position in your C&D you may consider several factors, including:

  • the value of your IP to your business;
  • the level of harm caused by the unauthorized activity;
  • whether the wrongful conduct appears to be done with knowledge of your IP rights;
  • the size and position of both the sender and recipient of the C&D, including any relationship between them;
  • the desired outcome of the C&D letter; and
  • the possibility that the C&D letter will be made public by the recipient, including through social media.

A well-drafted C&D letter will specify the nature of the sender’s rights, what the recipient must stop doing, any further steps the recipient must take, and the deadline by which these steps must be taken and confirmed with the sender to avoid litigation. A C&D letter will also often include language that preserves the sender’s rights whether or not the recipient complies with the demands by the deadline set out in the letter.

Conclusion

Misuse or unauthorized use of your IP can present significant and costly challenges to your business. If you need any help with any of the steps outlined above, please do not hesitate to contact the author or one of the other members of the IP Litigation & Enforcement group at Smart & Biggar.

You can also reach out to one of our team members if you have received correspondence that you believe is a C&D letter – see also our article "What to do if a patent owner sends you a cease-and-desist letter".

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.