How to Respond Properly to a Trademark Law Cease and Desist Letter

Trademarks and Trademark Infringement: Brief Definition

Trademarks include logos, lettering, slogans, or jingles. They serve to identify products and services and are intended to be distinctive in the market. They can also be protected from unauthorized use by third parties. In Switzerland and Liechtenstein, this is done with a paid entry in the trademark register of the Swiss Federal Institute of Intellectual Property (IPI). For protection within Switzerland and the entire EU, registration with the European Union Intellectual Property Office (EUIPO) is required.

Trademark infringement occurs when a third party commercially uses the same or a confusingly similar trademark.

Possible Consequences of Trademark Infringement

Cease and Desist

The party issuing the notice doesn't always seek to take you to court directly. Usually, their main concern is to have your trademark removed from the register. Additionally, they want it to no longer be used, produced, advertised, or sold by you. For this reason, they demand a cease and desist order. Within a specified period, you are required to cease all activities related to the trademark and remove it from the market.

Cost Reimbursement

Issuing a cease and desist notice is relatively simple but not cheap. Fees are incurred, and the lawyer who usually drafts the notice also wants to be paid. Since the sender is convinced that they are justified in doing so, they will invoice you for these costs along with the cease and desist declaration. The amounts depend on the individual case.

Compensation

The opposing party will also claim compensation for damages. In the calculation of damages, they have three options: they can calculate their loss or demand the profit you made. In some cases, the opposing party may demand a licensing fee. However, this is only possible if they have a fixed licensing fee that they have demonstrably granted multiple times.

In general, in order to make a claim for compensation, the opposing entrepreneur must first prove two things: that they have suffered a specific loss and that you are the cause of it.

How to Act in Case of Emergency

No Hasty Actions

The most important thing is not to sign a cease and desist declaration or make payments before your case has been reviewed by an experienced trademark lawyer. This amounts to an admission of guilt. Furthermore, you may lose all rights to your own trademark forever.

Apart from that, acting hastily out of sheer ignorance can result in even greater damage than necessary. For example, if you fill out the cease and desist declaration incorrectly, you may be subject to a high contractual penalty. Do not contact the opposing lawyer either. Leave this to a trained professional.

Check the Deadline and Consult a Lawyer

Hasty action is not advisable. However, doing nothing at all is also not a good solution. This can lead you to court, where the costs for you will increase immensely. Therefore, check the deadline stated in the letter and contact a lawyer as soon as possible, but within that time frame. The lawyer will not only carefully examine the legitimacy of the notice but also whether the amount claimed for damages has been vastly overestimated. Additionally, an experienced trademark lawyer is often able to achieve an out-of-court settlement even in the case of justified trademark infringement. This will save you a lot of money and nerves.

Check the Legitimacy

Now it is time to check whether the notice you received is legally valid. First, conduct an initial self-check to see if the sender has even registered their trademark for protection. You can find this out through an online search in the public registration registers Swissreg and the Madrid Monitor.

The date of registration is crucial. If both parties have registered their trademark, the older one prevails in case of doubt. If the sender has registered their trademark but has not used it for five years thereafter, the notice may also be invalid. A trademark must be used within this period, otherwise, a third party can apply for its deletion from the trademark register. This is intended to prevent a trademark from being registered only to claim financial compensation.

Another prerequisite for a trademark infringement is business activity. This means that the trademark must be used commercially or in circulation. If it is only used privately, you cannot be issued a cease and desist notice. But beware: there are some pitfalls in online trading.

In any case, remember: self-research never replaces verification by a trademark lawyer. Many lawyers also offer a free initial assessment.

Further Steps

The next steps depend on whether the notice is justified or unjustified. In the case of a justified notice, your trademark lawyer will advise you and try to achieve an out-of-court settlement with the opposing party. Otherwise, their goal is to at least keep the reimbursement costs within reasonable limits. In the case of an unjustified notice, the next step is either defense or a counterclaim.

Special Cases and Pitfalls

Especially within the World Wide Web, there are several special cases and pitfalls in product distribution. This can sometimes lead to a trademark infringement if, as a so-called "Powerseller," you repeatedly offer counterfeits for sale on online platforms, thus unlawfully using the brand of the original manufacturer. This may no longer be considered a private sale by many judges. In the worst-case scenario, your actions could lead to criminal prosecution.

Typically, it is legally acceptable to advertise the brand of the original manufacturer in combination with the sale of other genuine products. However, it becomes problematic if, for example, the logo or a specific identifier of the manufacturer is used for advertising or keywording. This could quickly be seen as ambiguity and a commercial impairment of the original brand. Therefore, such cases must always be individually assessed by a trademark attorney.

Conclusion

Receiving a trademark infringement warning is not trivial. It can potentially result in you losing immediate rights to your brand. The subsequent damages and litigation costs can be substantial. Nevertheless, it's important to stay calm in urgent situations and promptly engage a trademark attorney.

Experienced attorneys have successfully handled many seemingly hopeless cases to an extremely satisfactory outcome. GetYourLawyer assists you in finding a specialized trademark attorney. Submit your free initial inquiry today and seek assistance.