The first step that a trademark holder will often take to protect its rights is to have a trademark attorney draft a cease and desist letter. Although not a prerequisite to litigation, the cease and desist letter is seen as a cost effective means to resolving a large number of trademark infringement disputes. A cease and desist letter typically contains a statement of the trademark holder’s rights, followed by a statement of the facts, applicable law, and an application of the facts to the law. A cease and desist letter may demand that an alleged infringer cease and desist from making further use of an infringing mark, destroy any goods branded with the infringing mark, account for any profits earned or generated using the trademark, disgorge all such profits, and provide a signed statement from an officer of the company attesting to how each of these steps have been carried out. Sometimes a name change will suffice. The parties may agree to enter into a co-existence agreement. The recipient of a demand letter may dispute the charges of infringement. Every situation is different, although one constant remains – on balance, the cease and desist letter is a cost effective means of policing trademark infringement and resolving trademark infringement disputes.
There are, however, situations where cease and desist letters are used to assert more expansive rights than what the senders of the letters actually have, in an effort to bully the recipients into changing their trademarks or giving up domain names. These letters generally come with the threat of costly legal action and demands for statutory damages. Whether and how to respond to such a letter depends upon a number of pragmatic business and legal considerations.