“Stranger Things” was all the rage In 2017. Looking to cash-in on the popularity, a couple of friends launched a “Stranger Things” pop-up bar in Chicago. The bar was a hit with locals. But it was less so with the legal team at Netflix. It wasn’t long before Netflix sent the bar owners a cease and desist letter, threatening to call the bar owners’ moms and citing the horrors of Demogorgon if the bar lingered beyond its promised six-week run in the Upside Down. Heeding the dangers of an imminent spanking (or worse), the bar shuttered when promised.
The letter worked.
They don’t always.
Apple was to learn this lesson in 2011, when it sent Amazon and GetJar standard-form cease and desist letters threatening legal action if they didn’t stop using the phrase “App Store.” Apple tried to assert exclusive rights to the phrase as a trademark, and claimed that Amazon and GetJar’s use of that mark constituted infringement if not outright false advertising. Apple spoiled for a legal fight. And Amazon and GetJar invited it. GetJar even spoke openly to the press, painting a David and Goliath battle and saying that it wouldn’t be bullied by the tech giant. Having painted itself into a corner, Apple found itself left with few options but to file suit, which it did initially against Amazon. It didn’t go well for Apple.
A cease and desist letter can be a valuable tool. But it’s not a panacea, and may not always be appropriate. Here are some things to consider when contemplating the possibility of a cease and desist letter:
Cease and desist letters can be helpful . . .
Cease and desist letters are frequently used to help deter patent, copyright or trademark infringement, misappropriations and improper uses of confidential information and trade secrets, breaches of contract, defamation, and in regard to other claims and causes of action. A cease and desist essentially notifies the other party of potential causes of action and can be used to invite a pre-suit resolution, including by specific actions, cessations of action, and payments of damages. Sometimes, cease and desist letters are successful in this regard, although more often they act as a prelude to the courthouse door. To that extent, the cease and desist letter constitutes some potential evidence of a party’s desire to avoid litigation while protecting its rights, and may help establish a case for attorney fees and costs of action down the road if a lawsuit proves necessary.
. . . and cease and desist letters can be dangerous
In articulating a dispute meriting a lawsuit, a cease and desist letter may leave your business exposed. First, it tends to limit options, crystalizing a dispute and leaving a potentially narrower range of solutions on the table. This is what Apple discovered to its chagrin. Also, by recording a formal legal dispute, a cease and desist letter may empower the other party to file its own declaratory judgment action with the court, where the filing party asks the judge to find that it did nothing legally wrong or actionable. In instances such as these, the cease and desist letter is more likely unhelpful to the business (unless provoking suit was part of a larger strategy–which may be a viable option depending on the circumstances).
In using a cease and desist letter, be prepared for this eventuality, and in the necessity for legal action once the letter is dropped in the mail. In short, if you send a cease and desist letter, be ready to prosecute your claims and defend your rights in court.
Think about the alternatives
Sometimes, a cease and desist letter is necessary. But there are alternatives depending on the circumstances. For example, your attorney can suggest a specific concern to the other party and request the other party’s cooperation in investigating that concern as a prelude to a more cooperative form of resolution. If done correctly, this approach may avoid the type of dispute necessary to a viable declaratory judgment action. You may also consider a notice letter that is one step removed from a full cease and desist letter but which notes potential infringement or breach and suggests alternatives to litigation. (In the world of patents, this is its own specialized form of communication.) Or, the approach could be more friendly and business focused, suggesting a mutually beneficial arrangement after considering shared interests.
These alternatives often involve other legal concerns, like antitrust, in effectuating a non-litigative solution. Weighing desired outcomes against legal risks, business risks, and legal spend should be part of the calculation on which tactic you may prefer, keeping in mind that, in considering litigation and its threat, there are times when the climb may not be worth the view.
Think about tone and the ask
If you decide that a cease and desist letter is your best or only option, think about how the letter is phrased and what it suggests, threatens or demands. As Netflix demonstrated with “Stranger Things,” the tone, form and content of a cease and desist letter can make a big difference in how the other side reacts. And in situations where the public might be involved, what is said and how it’s said may be important to preserving goodwill and protecting your business, your people, and your assets.
Don’t be afraid to be creative, or to suggest something different from an imminent threat of suit if the other side fails to comply with a chain of demands that sound like they’re pulled from a lawsuit. Businesses exist in a multi-faceted context. Legal is just one of those facets. Make sure your attorney is aware of the larger context so you get the best guidance and advice.
Think about if you should have an attorney involved
You don’t have to use legal counsel to write a cease and desist letter. But, the right attorney can be a valuable resource in getting the law, details, and strategy of a cease and desist letter right. And in helping you determine alternate approaches. Also, letters on firm letterhead can be effective at grabbing attention, emphasizing the seriousness of the matter, and demonstrating that counsel has been engaged. This approach can help get minds focused.
If you are in a legal dispute or believe a cease and desist letter is necessary to protect your business, contact Baker Jenner LLLP today. We have years of experience in contract litigation and intellectual property disputes, and we are here to help you succeed.
Baker Jenner LLLP
