Responding to a Cease and Desist Letter: The Gentle Way

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A friend of mine owns a relatively small start-up company in Brevard County, Florida which manufactures a product used to improve energy efficiency in homes and other buildings. Not coincidentally, given the subject matter of TacticalIP.com, this friend, who we’ll call Jim, was sent a cease-and-desist letter from the company who is the 800-pound gorilla (hereinafter, “Gorilla”) in the industry in which his product and company competes. Gorilla demanded that Jim stop using his company’s name, which he has been using for over 10 years in interstate commerce, on his website, on all of his marketing materials, and on the product itself. Gorilla, however, had registered a very similar name with the USPTO. If Jim had to stop using his company’s name, it would hurt his business — something Gorilla wouldn’t mind one bit!

Jim came to me with the letter, quite concerned that he might be forced into litigation with a deep pocketed adversary, against whom any victory would be Phyrric. Jim was not hysterical, but he was getting ahead of himself. As they say, it’s better to be lucky than good, but Jim was both. He’d been using his product under the name, in interstate commerce for a good while before Gorilla registered the trademark. Better still, he could prove it, in writing! (Sidenote: always document, always, always always document, your lawyer will thank you). With information in hand, we could respond with confidence, and try to put Gorilla in its place.

But just as might isn’t always right, being right isn’t always enough. Escalating the dispute would get us nowhere fast, and while my friend was not a pauper, he didn’t have a million dollar litigation budget either. Clearly, Gorilla had assigned value to the trademark in question. They had registered it, and retained a high-profile law firm to try to enforce its rights, such as they were, to the mark. So, instead of simply denying the allegations of infringement and dilution, and having confidence that we’d established our mark, we decided to make a proposal to Gorilla.

We responded, denying their allegations. But, as delicately as we could manage while still making our point, we offered to license the mark to Gorilla, in exchange for reasonable compensation. Rather than a threat, we we chose to view the cease-and-desist as a potential opportunity.

A week or two later, I got a call from Gorilla’s attorney. He got the message, loud and clear, and he was calling to feel us out. I couldn’t provide those sorts of details, and we ended our conversation. That was well over a year ago. We haven’t heard from Gorilla, and they haven’t sued us. Jim’s still growing his business, which would be that much tougher if he had to spend money on litigation.

This tactic won’t work every time, and we had the fortune of having a good case and a good faith interest in being acquired. But the takeaway is clear: responding to force with force wasn’t going to work in this case. This wasn’t Apple v. Samsung, or even Frito Lay v. Pretzel Crisps. Taking the gloves off would only serve weaken both parties and leave the weaker side exposed in a war of attrition. We had to make this a judo match rather than a brawl. Parry and thrust won’t always carry the day, but the righteous little guy needs every advantage he can get.

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SUNDAY, APRIL 20, 2014

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