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Businesses and individuals often receive threatening letters (usually certified) from lawyers alleging patent, trademark or copyright infringement, domain name infringement, cybersquatting, cyberpiracy, false advertising or unfair competition. The letters generally request that the recipient cease and desist from engaging in the allegedly infringing activities. All too often, these recipients agree to cease and desist, regardless of the merits of the claims, because they do not understand the allegations or because they simply wish to avoid or cannot afford the costly litigation process. Unfortunately, many of these recipients fail to realize that they have meritorious defenses to the allegations. Other recipients fail to recognize that they have a current or expired insurance policy which obligates the insurance carrier to defend and indemnify them in lawsuits involving intellectual property rights.
A recipient of a cease and desist letter should neither ignore the letter nor respond without first consulting a competent and experienced intellectual property lawyer, particularly when the matter involves allegations of patent infringement. A lawyer should conduct analysis of the matter and render an opinion regarding whether or not the specified conduct is infringing. The failure to obtain an opinion of a lawyer may result in liability for enhanced damages and the opposing parties' attorneys' fees if the recipient ultimately loses in litigation.
If the allegations of infringement are unfounded, the lawyer may recommend that the recipient file a pre-emptive suit asking the court to declare that the alleging infringing conduct is not infringing and seeking an injunction preventing further allegations of infringement.
Additionally, in the event the conduct is considered infringing, an experienced intellectual property lawyer may give suggestions regarding modification of the conduct to avoid future infringement. The lawyer may also negotiate favorable settlement terms, such as a phase-out period to liquidate existing inventory and/or a reasonable license for future conduct.