One of the scariest things to happen when you are building a new online business is to receive a trademark cease and desist letter.
As a result of an ever-increasing number of pandemic-induced online businesses, the number of names available through the U.S. Patent and Trademark Office is decreasing. There are only so many names available, and more and more of them are being secured by new trademark filings each year. This increases the likelihood that every new business is a potential infringer.
As a result, the number of potential infringing trademarks is also on the rise. We call businesses who fail to secure the rights to their names and inadvertently infringe on other marks “accidental infringers”.
For many accidental infringers, the end result is to receive a trademark cease and desist letter at best, or at worst a federal trademark infringement lawsuit. Because a trademark indicates the source of the goods that someone is selling, they are a valuable piece of intellectual property and should be vigorously defended.
In this article we will briefly touch on how to avoid receiving a trademark cease and desist letter in the first place, and then what to do if you do receive one.
Do THIS to Avoid Receiving a Trademark Cease and Desist Letter
The best way you can do to avoid being on the receiving end of a trademark cease and desist letter is to register all of your intellectual property.
But this is easier said than done.
Here are some simple steps you can take to start the process of filing your Federal Trademarks.
Step #1 – Identify Your Trademarks
Before you start filing all of your trademarks, you should make a list of the potential trademarks that you own.
Here is a list of some of the most common trademarks that are used by online business owners, in the order in which their registration should be prioritized:
- The name of your business or brand
- The name of your signature course or program
- The name of your product lines
- The name of your podcast or Youtube channel
- Your slogan
- Your logo
- Any other names that you might use to identify your business or branding in the marketplace
As you can see, you may have anywhere from 7-10 names or potential trademarks that you could potentially register with the United States Patent and Trademark Office (USPTO).
We typically recommend that you begin by registering your business name or brand, as all other trademarks will likely flow from that name. In addition, once you register that name, it may become easier to register other names you use that are similar in style, sound, or appearance.
Step #2 – Research Your Trademarks
Once you have identified the trademarks that you want to use in your business, you should research those marks by completing a comprehensive clearance search to insure that no other brands have previously registered the names you are seeking registration for or marks that are likely to be confused with your mark.
While it is possible to do this research on your own, we do recommend enlisting the help of a trademark lawyer who will stand behind their search with a guarantee.
Here are some of the online sources you will need to review in great detail for your clearance search:
- The USPTO database – You should look for exact match names, near exact match names, phonetically similar names and anything else that is likely to be confused with your name.
- Google – We recommend going 10 pages deep
- All social media platforms (Facebook, Pinterest, Instagram, Tiktok, etc.)
- The white/yellow pages online
- Business directories in your industry
- State directories including the Secretary of State Databases for all 50 states
As you can see, doing a comprehensive search can be time consuming and overwhelming. Hence we recommend having a lawyer help you.
Step #3 – Ready your Application
You must understand that a trademark search gives you a snapshot in time. As soon as the search is concluded, new businesses can come on the market that could steal your mark.
For this reason, it is smart to prepare and file your trademark application as soon as possible after you have completed your search.
Step #4 – Respond to any Office Actions
The trademark system is not a system where you file your application and then sit back and wait to receive your registration in the mail. Your application will be assigned to an examining attorney who will do their own search to ensure you are not infringing on any other marks.
They may have questions for you or ask for amendments to your application. In this case, they will issue an “office action” that requires your response. These letters can be either substantive (requiring a legal brief to respond to) or non-substantive (in which a simple response is sufficient).
There are strict deadlines to respond to these notifications. If you do not file a timely response, your application will be dismissed.
Step #5 – Publication
Once you have responded to all office actions, you must make it through the publication stage. Frequently this is a mere formality, but it is also possible that someone may oppose the registration of your mark.
Typically this is because they feel that your mark is likely to infringe on their own, previously registered, trademark.
Step #6 – Registration
After the 30-day publication period ends, your mark will proceed to registration. This means you have a registered trademark! Often, this can be anywhere from 12-18 months AFTER you initially filed your application.
Once your trademark registers, you are the trademark owner and can sleep easier knowing that nobody will send you a cease and desist letter claiming that you are infringing on their mark.
But up until then, it is always possible that someone may send you a cease and desist letter. The remainder of this post will review what you should do if that happens.
Related: Do you need help registering your trademark? Click here to learn how Hawthorn Law can help.
What to do if You Receive a Trademark Cease and Desist Letter
If you DO receive a trademark cease and desist letter, the first thing you should do is read it carefully. If you are not sure what the information in the letter means, then we recommend you call a lawyer immediately.
Many times, cease and desist letters will have very specific deadlines before legal action will escalate. And once a plaintiff moves forward with a Federal Infringement Lawsuit, the costs of settlement will increase as well.
What is included in a Trademark Cease and Desist Letter
The basic gist of a trademark cease and desist letter is that the author of the letter is demanding that the recipient stop doing something that would be infringing on the exclusive rights of the author or (more commonly) their client.
While it is possible for anyone to write a cease and desist letter with a variety of legal templates that can be found for free online, the most persuasive and compelling of such letters are frequently written by lawyers.
One of the main reasons that sending a trademark infringement letter (also called a C&D letter) is the best course of action, and will precede a Federal lawsuit, is that if you continue to engage in what could be considered “infringing activity”, then the fact that you received a letter telling you to stop will show that the infringement was willful. In turn, then removes your ability to claim ignorance of the infringing actions if or when you are brought into court.
Here are some of the main components of a typical trademark cease and desist letter:
- The name and contact information of the lawyer for the plaintiff
- What actions you are being asked to terminate
- Information, including dates and circumstances surrounding your alleged infringement
- The trademark registration number of the mark you are infringing against
- A demand that you cease infringing activity upon receipt of the letter (i.e. immediately)
- A deadline for you to respond to the letter (frequently to advise that you have terminated the infringing activity)
- A request for damages or legal fees (not always)
- A reference that additional legal action could be taken if you ignore the letter
When you receive a cease and desist letter, the tone of the letter, the way it is written, and it’s professionalism (or lack thereof) can indicate how serious the purported trademark holder is about their legal rights and willingness to enforce them.
A strongly written trademark cease and desist letter can have the effect of immediately ending the infringement. However, a lawyer can help you to ascertain whether the writer is overextending their hand by being too threatening, not assertive enough, or whether the alleged infringement rises to the level of actual infringement.
Can I just ignore the Cease and Desist letter?
Simply put, ignoring a cease and desist letter is never a good idea.
If you do so, you risk getting sued for trademark infringement.
However, if it is obvious that the letter came from the business owner, or from a lawyer that does not typically handle trademark infringement cases, or is just poorly and unprofessionally written, then it may provide you with a number of options in terms of how to respond. Alternatively, you may not take the letter seriously at all.
This is one reason why I typically counsel against client’s drafting cease and desist letters on their own without the help of a lawyer. If the letter does not have “teeth” and is not backed up by an immediately federal lawsuit if the demands are not complied with, then the offending party is likely to continue the infringing behavior.
That being said, we do recommend that you take every cease and desist letter seriously and assume the worst if you do not properly and promptly respond.
Are you actually infringing on someone else’s trademark?
The first thing a lawyer should do when reviewing the cease and desist letter is determine whether you are actually infringing on the rights of the potential plaintiff. Although a frivolous cease and desist letters are rare, and frowned upon by the courts, they are always a possibility.
Here are some affirmative indications that you might be infringing on the rights of another trademark:
- You are receiving calls from customers who believe they are purchasing someone else’s products when they are in fact purchasing your goods or services
- It is obvious that your branding could be confused with the trademark of the plaintiff, causing consumer confusion
- You are using a name that is the same or similar to the plaintiff’s trademark
- You knew about the other brand when you began business, but didn’t think it was a big deal
The most common factor to consider when evaluating the merits of a cease and desist letter is whether your branding is “likely to be confused” with the trademark of the plaintiff. If your branding is likely to cause confusion on the part of the consumers, then you are likely violating the rights of the plaintiff and should stop the infringing activity immediately.
How to Respond to a Trademark Infringement Cease and Desist Letter
We strongly discourage you from responding directly (or calling) the author of the cease and desist letter you have received. The first step to responding is to call a trademark lawyer for assistance.
By hiring a lawyer to help you, it will set the tone to counsel for the plaintiff that you are serious about defending your rights to your branding. Although cease and desist letters should always be taken seriously, there are times where the sender is overreaching by claiming trademark rights they don’t own. This can be met with a stern response or a cancellation proceeding. Either of these can help to prevent an expensive lawsuit in Federal Court.
But even in situations where you have no intention of fighting the allegations, you as the alleged infringer do not want to respond to the trademark holder on your own. You could inadvertently do or say things in a response that would expose you to additional liability.
A trademark lawyer will be able to help you draft a clear and concise response that outlines your arguments for why the sender should end the infringement claim and points out the flaws in their claims.
Here are some legal areas where the sender may run into trouble.
You Have Priority
A valid claim for trademark infringement requires prior legal rights to use a mark. This can be proven with a valid trademark registration or through other means. Frequently, the sender of a cease and desist letter fails to include evidence of prior use, either inadvertently, or because they don’t have any such evidence.
If the cease and desist letter does not contain any evidence of prior use, then this needs to be researched. Without a federal registration number included in the letter, the sender is relying upon common law trademark rights which are harder to prove.
There is no Likelihood of Confusion
If the sender is able to prove priority over your use of the trademark, then the question becomes whether a likelihood of confusion exists. Here are the main factors that the courts will use to help answer this question:
- Are the marks similar in appearance, sound and connotation?
- Are the good and services begin manufactured or sold similar?
- Are there other similar marks used in the industry?
- Do both parties have similar trade channels in common?
If you are able to show that there is no priority claim, or that there is no likelihood of confusion, then a well-drafted response letter may put the issue of infringement to rest.
What are my next steps if I am Infringing?
There are many cases where even a vigilant and comprehensive trademark search and resulting application can still lead to an accidental infringement.
If you realize that you are in the wrong after receiving a cease and desist letter, don’t fret. While you will have to end your infringing activity, how and when you end your activity can be negotiated.
If you sell physical products that are branded with the infringing trademark or trade dress, a trademark lawyer can help you to negotiate a phase out period so that you can sell any remaining inventory, thus recouping your investment in your business. However, even in these situations, there can be firm deadlines by which you must cut off all sales.
At the end of the day, nobody wants to spend hundreds of thousands of dollars on a Federal Lawsuit – trademark disputes are expensive – so it is in everyone’s best interest to reach a negotiated settlement.
Again, before you attempt to negotiate a settlement on your own, we recommend you consult with a trademark lawyer first.
Not Legal Advice
The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience.
This post does not constitute legal advice. It is for informational purposes only. If you have received a trademark cease and desist letter than you should contact a trademark attorney immediately.
If you are interested in registering your trademarks, click here to learn more about how Hawthorn Law can help you.