I’ve written previously on using the virtues of judo when responding to a cease and desist without going overboard. What about when you’re faced with someone infringing or diluting your trademark? What options are there, other than the C&D?
Understandably, many trademark owners, after the initial rage subsides, will call up their brother’s ex-girlfriend’s cousin who once knew a lawyer in Omaha and have them write a nasty C&D and “see what happens”. That might work. It is certainly cheaper on the front end. Or is it? Whether to send a C&D is not a simple question.
For many product and service providers (i.e. businesses), their brand is their stock in trade. Without trademark protection, their brand may as well be your competitor’s brand. I’m fond of saying that only McDonald’s could serve billions of crappy burgers in every corner of the globe. John Doe’s Burgers could never pull that off. It’s all in the brand. Infringers are taking shortcuts, cheating, and basically capturing your goodwill, as embodied in trademarks, which are worth fighting over. The question is whether a fight is necessary, and if so, how and when should you start the fight.
Most trademark owners know, at a gut level, that an infringer must be stopped, or at least put on notice that they are infringing. Failure to do so causes the trademark to lose its integrity and legal protections. C&Ds are cheap, and especially for small businesses and startups, are a cost-effective way to enforce their rights.
A C&D is not unlike most demand letters. The trademark owner states that she owns certain rights, the recipient is infringing on said rights, such infringement creates certain causes of action for damages and injunctive relief (e.g. trademark infringement, unfair competition, cybersquatting or dilution under federal and state laws); and litigation may ensue if the infringement does not cease.
You are well advised to consider a C&D prior to litigation, for obvious reasons. Litigation is expensive, time-consuming, stressful, and uncertain. On top of that, if you sue without first making demand to cease, the judge may believe you are being a hasty litigant.
However, sending a C&D can have unforeseen consequences. Your competitor could read your letter and decide that rather than bothering with negotiation or waiting to be sued by you, it should take the offensive and sue first. A suit in federal court for declaratory relief — basically a court order stopping you from infringing on the infringer, could ensue.
In a declaratory judgment lawsuit, the alleged infringer would ask the court to “declare” that it is not infringing your rights. They might ask the judge to hold that your trademark is unenforceable. Now you’re on the defensive — though you can, and maybe should, counter sue.
There are advantages to suing first. You can pick the most favorable venue for your case, probably your home turf. This advantage is greater if your adversary is far away, or if they have a smaller war chest with which to litigate. Of course, the other party can move to transfer the case, but then you’re already behind the eight ball.
Additionally, dispensing with the customary C&D and suing on your home turf, while possibly more costly at first, certainly sends a stronger message. Your adversary might be unable or unwilling to defend a lawsuit.
A third option might be to send a different sort of letter. Rather than demanding that the infringer cease and desist and accusing them of infringement, you might simply inquire as to their use of the mark and make clear your intent to resolve the matter amicably. Before sending any letter, be sure that you have higher priority rights to the trademark. Nothing is worse than sending a C&D full of bravado, then learning that your competitor has better rights to the mark. Do your homework. If it turns out that the would-be infringer has better rights, sending out the first C&D could foreclose defenses that the marks do not overlap.
So, next time you spot a potential infringer, think hard before sending a C&D. You have options, so use them.
Aaron Thalwitzer is an attorney with Zies Widerman & Malek practicing civil litigation and intellectual property law in Melbourne, Brevard County, Florida.