I Got a Cease and Desist Letter!

One of the scarier-sounding lawyer terms you’ve probably heard is “cease and desist.” This often refers to a letter you get in your inbox or in the mail, and if you’ve never seen one before it can cause quite the fright.

The cease and desist letter is a letter, usually written by a lawyer or the patent owner, that says that (1) you’re doing something illegal and (2) something could happen if you don’t stop. Sometimes, the letter will demand that you provide a payment to settle the issue. Other times, it may request that you just stop all sales or production. Usually the letter will indicate a limited amount of time you have to comply before the sender takes additional action.

Why did someone send this?

The simple answer is that letters are cheaper than lawsuits. Someone may have no intention of filing a patent infringement lawsuit, but by sending the letter and alerting you that someone else holds a patent on an invention that you’re using, you may be more inclined to negotiate a license to use the patented technology.

Another use of the cease and desist letter is to put you on notice. Once you receive the letter, you can’t claim that you didn’t know you were violating someone else’s rights. Even though whether you know about an existing patent doesn’t affect whether you are, in fact, infringing, your knowledge of a patent could affect monetary damages resulting from patent infringement. If you continue using the invention and end up in court, you could be found liable for “willful” infringement since you received “actual” notice that you were infringing. Cease and desist letters therefore help increase the amount of damages awarded, if it comes to that.

Finally, patent trolls are a growing problem for inventors. “Trolls,” or “non-practicing entities,” have obtained patents, but instead of actually practicing the inventions they only use them to get licensing fees from “infringers.” Patent trolls will often send cease and desist letters, usually not from the inventor, that contain “bad faith” assertions of infringement like failing to contain specific information about the patent and infringement. [1] Trolls most commonly target larger companies who have money to pay a licensing fee to make the trolls go away.

What Do I Do?

Step 1: Don’t panic!

Cease and desist letters are sometimes written to sound scary. Remember that the sender could have just sued you; consider why they didn’t. It’s important to know that cease and desist letters don’t have any legal force. There won’t technically be any legal repercussions if you don’t do what the letter demands, but ignoring cease and desist letters generally isn’t a good idea.

Step 2: Read the letter.

How does it sound? Angry? Are you the correct recipient? Are you actually using the patent the letter claims you’re using? Who is it written by? An organization, the inventor, or a lawyer? If the letter is written by a lawyer, that’s probably a hint that the inventor has invested money in hiring legal counsel and may be serious about taking legal action against you.

Step 3: Investigate.

When you receive a cease and desist letter, it’s often a good idea to seek the help of legal counsel to understand whether you’re infringing a patent. Lawyers can help you figure out whether you’re infringing the patent and help you think through your options moving forward.

Step 4: Consider the costs. Make a decision.

You have a few options now. You could comply with the letter. Some letters may demand that you pay a one-time sum. That amount could be less than the cost of hiring an attorney to handle the situation, so maybe it’s worth paying the sum or ceasing your use of the invention.

You may choose to assert a defense. The first defense you could assert is non-infringement. This would involve you saying that your use of the invention doesn’t violate the patent-holder’s rights. Alternatively, you could argue that the patented invention is invalid, perhaps because of prior art.

You could also try negotiating with the sender. If you’re willing to pay a fee to continue using the invention, you could try negotiating a license to use the patent.

Finally, you might think about ignoring the letter. Remember that it’s generally not a good idea to ignore cease and desist letters. Lawyers can be helpful resources to help you think through the consequences of ignoring the letter, or they might be able to help you draft a thoughtful response explaining why you’re not complying.

Authors: Carol Lin (Harvard Law School), Ira Winder (MIT)