A cease and desist letter is often the first step when another individual or business believes that you are infringing on their intellectual property protections, such as a trademark. Although these letters generally carry no legal weight on their own, they can be a sign of more to come in the future.
A failure to respond to a cease and desist letter could result in additional letters from the sender repeating or expanding their demands, a lawsuit, or a temporary restraining order. Those who receive these letters are wise to either respond or react.
Option #1: Respond.
Although the first option discussed by the United States Patent and Trademark Office (USPTO), this step requires a note of caution. Cease and desist letters can be used by other businesses for strategic purposes. They may request information about the alleged infringing item or service, under the guise of a violation. Respond carefully so as not to undermine your own business interests.
Option #2: React.
There are a few different ways to react to the letter. You could attempt to negotiate. This is valuable if after careful review you determine there is a high likelihood of infringement. Another option is to file a counter lawsuit. This can include a request for the court to provide a declaratory judgement — a legally binding judgment or declaration that can provide guidance as to whether or not infringement is present in this situation. It does not result in the award of damages or any other orders but helps provide clarification on whether or not there are grounds for a lawsuit in the first place.
Before choosing your course of action, it is a good idea to review the situation and outline the strengths and weaknesses of the allegations.