Cease and Desist Letter 101 for NJ Businesses

When Legal Disputes Arise, a Cease and Desist Letter Can Be a Quick, Effective, and Inexpensive Way to Resolve It

When legal disputes arise, a cease and desist letter can be a quick, effective, and inexpensive way to resolve it. In basic terms, a cease and desist letter is intended to put the receiving party on notice that you believe they are committing an illegal act. It also advises that if they do not stop, you plan to take legal action. Cease and desist letters can be used to address a wide range of legal situations, including breach of contract, violation of a non-disclosure or non-compete agreement, and patent, copyright, or trademark infringement.

Benefits of a Cease and Desist Letter

While cease and desist letters don’t necessarily carry any legal weight, they have several important benefits. Most notably, it can be a relatively inexpensive way to resolve many legal disputes, particularly legal disagreements involving intellectual property. Where infringement is readily apparent, the infringers often understand that it is in their best interest to stop the misuse and cooperate with the IP owner to resolve the matter amicably. Even in less clear-cut cases, a cease and desist letter can often prompt settlement discussions and avoid costly litigation.

Even when litigation is inevitable, a cease and desist letter is still advantageous. It establishes actual notice of the claimed rights and may give rise to a claim of intentional breach or infringement if the illegal conduct continues after receipt of the letter. Cease and desist letters also demonstrate that the parties attempted to resolve their dispute prior to commencing litigation, which courts require. It might also serve to put a third party on notice of contract provisions which would then give rise to a possible cause of action for interference with contractual relationship.

Anatomy of a Cease and Desist Letter

Cease and desist letters can take a variety of forms. Recently, companies have made headlines for C&Ds that use a humorous, rather than threatening, tone to send a message.

A-B InBev, which manufactures Bud Light, recently sent a cease-and-desist letter written on parchment and delivered by a town crier. The letter alleged that Modist Brewing Company’s new “Dilly Dilly” Mosaic Double IPA, named after the popular catchphrase from Bud Light’s recent medieval-themed advertisement campaign, infringes A-B InBev’s trademark. The letter stated:

Dear friend of the Crown, Modist Brewing Company. Congratulations on the launch of your new beer, Dilly Dilly Mosaic Double IPA! Let it be known that we believe any beer shared between friends is a fine beer indeed. And we are duly flattered by your loyal tribute. However, “Dilly Dilly” is the motto of our realm, so we humbly ask that you keep this to a limited-edition, one-time-only run. This is by order of the king. Disobedience shall be met with additional scrolls, then a formal warning, and finally, a private tour of the Pit of Misery. Please send a raven, letter or electronic mail to let us know that you agree to this request. Also, we will be in your fair citadel of Minneapolis for the Super Bowl, and would love to offer two thrones to said game for two of your finest employees to watch the festivities and enjoy a few Bud Lights. On us. Yours truthfully, Bud Light.

Netflix also struck a playful, casual tone in a cease and desist letter sent to a Chicago bar that used the “Stranger Things” name without authorization. When New Jersey businesses don’t have to flex their creative muscles when sending a C&D, a cease and desist letter should include, at minimum:

• The sender’s name and contact information;
• The name and contact information of the recipient;
• A clear description of the conduct that you are ordering cease
• A clear description of your legal rights, i.e. the IP owned by the sender or contract provision that was violated
• A demand to stop
• A warning threatening further legal action
• A time limit to comply, i.e. 10 days or two weeks

There are alternatives to sending a cease and desist letter. In some cases, it is worthwhile to take a softer and less formal approach, such as calling or emailing the other party about the issue. On the other end of the spectrum, it is sometimes necessary to directly file suit to protect your legal rights. To determine the best course of action, it is advisable to consult with an experienced business attorney.

If you have any questions or if you would like to discuss your copyright, trademark, or patent legal needs, feel free to contact me, William Samuels, at 201-806-3364.