Cease And Desist Letter: A Brief Guide

What is a cease and desist letter? Why did Epic Games, the creator of Fortnite, issue these letters to sellers? 

Epic Games, the creator of the massively popular video game Fortnite, issued cease and desist letters to various third-party sellers who were producing and selling unauthorised merchandise featuring Fortnite characters, logos, and other intellectual property.

Epic Games argued that these sellers were infringing on its trademarks and copyrights. The unauthorized use of Fortnite's branding not only violated intellectual property laws but also risked damaging the reputation of the brand due to the sale of low-quality merchandise.

So what is a cease-and-desist letter?

A cease-and-desist letter, also called a demand letter, is a formal warning sent to individuals or businesses involved in activities that are considered illegal or infringe on someone else’s rights. The purpose of the letter is to demand that the behaviour stops immediately, or the sender may take legal action.

These letters are commonly used in cases such as breaking a non-compete or non-solicitation agreement, copyright or trademark infringement, defamation, breach of contract, and other legal disputes. Lawyers or legal representatives usually write and send them on behalf of their clients.

The primary goal of a cease and desist letter is to assert rights and demand the cessation of unlawful activities or violations. Common reasons for issuing such a letter include:

1. Intellectual property infringement: Cases involving copyright, trademark, or patent violations.
2. Defamation: Addressing slander or libel that damages one’s reputation.
3. Contractual breaches: Enforcing terms of agreements that have been violated.
4. Harassment or stalking: Preventing unwanted behaviours that invade privacy or cause distress.
5. Unlawful debt collection practices: Stopping unethical or aggressive attempts to recover debts.

A cease-and-desist letter usually includes:

• A detailed explanation of the wrongful behaviour or violation.
• An outline of how this behaviour infringes on the sender’s rights.
• A demand for the recipient to stop the behaviour in question.
• A warning that legal action will follow if the behaviour does not stop.

Is a cease-and-desist letter the same as a court order?

No, a cease-and-desist letter is not the same as a court order. A cease-and-desist letter acts as a formal warning, telling someone to stop certain actions. It is usually the first step taken before starting legal action.

A court order, also called an injunction, is a legally binding decision made by a judge. It requires a person or business to stop a harmful activity. Unlike a cease-and-desist letter, a court order is enforceable by law.

To get a court order, there must be a lawsuit already happening. The person or business asking for the injunction needs to request a hearing with a judge. At this hearing, the judge decides whether to issue the court order or not.

Some court orders are issued quickly in emergencies. These are called Temporary Restraining Orders (TROs), and they last 14 days. During this time, the party requesting the TRO can ask for a Temporary Injunction (TI) to stop harmful behaviour for the duration of the lawsuit. Different areas have their own rules about these court orders.

Does a cease-and-desist letter have to be written by a lawyer?

No, a cease-and-desist letter does not have to be written by a lawyer. However, having a lawyer draft the letter can enhance its credibility and legal accuracy. Whether a lawyer is involved or not depends on the complexity of the issue and the desired outcome. A cease-and-desist letter is often seen as the first step before starting legal proceedings.

A cease-and-desist lawyer can review contracts, agreements, or applicable laws and provide advice on whether an individual’s rights have been violated. If a decision is made to send a cease-and-desist letter, the lawyer can include legal arguments to strengthen the case and reduce the likelihood of the letter being dismissed as an empty threat.

Working with a lawyer offers several advantages, including:

• Gaining a clear understanding of the legal situation and available options.
• Assistance in drafting and reviewing a strong, legally sound cease-and-desist letter.
• Demonstrating seriousness in protecting one’s rights.
• Representation during negotiations with the opposing party.
• Support with potential future legal actions, such as filing restraining orders or lawsuits.

Enforcement of a cease-and-desist letter?

No, a cease-and-desist letter cannot be directly enforced because it is not a legally binding document. It is a formal request or warning sent by an individual, organisation, or their legal representative to demand the recipient stop engaging in specific activities. Compliance with the letter is voluntary, and the sender cannot impose penalties or compel action solely based on the letter itself.

When to consider sending a cease-and-desist letter?

A cease-and-desist letter can be a useful way to resolve disputes quickly and without going to court. It may lead to negotiations that settle the issue peacefully.

Sending a cease-and-desist letter demonstrates that the sender provided the other party with formal notice of their concerns. If they ignore it, this could serve as evidence that they knowingly continued their actions. They can no longer claim they were unaware of the issue.

Common reasons to send a cease-and-desist letter include:

• Copyright or trademark infringement.
• Breaking a non-compete agreement.
• Breaking a non-solicitation agreement.
• Breaching a business contract.
• Slander, libel, or defamation.
• Harassment.

Before sending a cease-and-desist letter, speak with a lawyer to fully understand the legal consequences of doing so.

What happens if a cease-and-desist letter is ignored?

If a cease-and-desist letter is ignored, the sender has several ways to take the issue further. While the letter itself is not legally enforceable, it serves as a formal warning and gives the recipient a chance to resolve the matter peacefully. Ignoring the letter could lead to legal consequences for the recipient, depending on the nature of the problem and the sender’s next steps.

Before taking further action, it is important to review the situation carefully. Check if the harmful behaviour or violation is still happening or getting worse, and ensure that there is strong evidence to support the claims. It is also helpful to assess whether the recipient has completely ignored the letter or responded inadequately.

If the recipient does not comply, the sender can take legal action. This often involves filing a lawsuit, asking the court for an injunction to force the recipient to stop their actions, or seeking compensation for financial losses or damage to their reputation. Unlike a cease-and-desist letter, court orders are legally enforceable and carry the authority of the law.

Another option is to revise or resend the letter. If the original letter was unclear or lacked enough evidence, a new letter with stronger arguments, ideally prepared with legal advice, can clarify the demands and make the case more convincing. A follow-up letter may also encourage the recipient to comply without the need for court proceedings.

If legal action is not preferred, alternative methods like mediation or arbitration may be considered. Mediation involves a neutral third party helping both sides reach an agreement, while arbitration results in a binding decision by an arbitrator. These approaches are especially useful in disputes where maintaining a relationship, such as a business partnership, is important.

If the matter does end up in court, the original cease-and-desist letter can be used as evidence. Courts may view the letter as proof that the sender tried to resolve the issue in good faith. The recipient’s failure to respond could also suggest they acknowledged the claims, which might influence the court’s decision.

Ignoring a cease-and-desist letter can have serious consequences for the recipient. These may include court-ordered compliance, financial penalties, damage to their reputation, and even covering the sender’s legal costs. While some recipients may think ignoring the letter is the best approach if they believe it is baseless, this decision can carry significant risks and should only be made with proper legal advice.

What should anyone do if they receive a cease-and-desist letter?

Receiving a cease-and-desist letter can feel overwhelming, but it’s important to stay calm and handle the situation carefully. Regardless of whether the claims in a cease-and-desist letter are valid, exaggerated, or unfounded, the recipient’s response can have significant legal and practical consequences. Taking appropriate steps is crucial to resolving the matter without further escalation.

The first thing to do is remain calm. Avoid reacting emotionally or contacting the sender straight away. Take time to read the letter carefully to understand what it says and what is being asked. Reacting too quickly or without thought could make the situation worse or unintentionally support the sender’s claims.

Read the letter thoroughly to understand its details. Carefully examine the actions being alleged, such as copyright infringement or defamation. Check if the sender has included any evidence and note their specific demands and deadlines. This step is key to understanding the seriousness of the situation.

Next, evaluate the claims made in the letter. The recipient should compare the accusations to their own records or actions to determine whether they are true. Research the legal basis for the claims and consider whether the demands seem reasonable or over the top. This will help them figure out the best way to respond.

It is a good idea to get advice from a solicitor or legal expert, especially if the situation is complicated or high-stakes. A lawyer can help the recipient understand the claims, provide expert advice, and prepare a strong response. Their guidance ensures that the recipient's rights are protected.

Do not ignore the letter. Ignoring it could make the sender more likely to take legal action. Even if the recipient believes the claims are baseless, responding in a professional and measured way demonstrates a willingness to address the issue.

Prepare a clear and appropriate response. Depending on the situation, the recipient may choose to meet the demands, negotiate a compromise, deny the allegations, or request more information. A carefully written response can help avoid further conflict and open the door for constructive communication.

Keep records of all communications and documents related to the matter. This includes the original cease-and-desist letter, the recipient's response, and any evidence that supports their position. Proper documentation ensures they are prepared for any developments.

The recipient should consider whether they have grounds for a counterclaim if the sender’s allegations are false or exaggerated. For example, if the letter damages their reputation with false accusations, they may be able to claim defamation. If the letter is part of a pattern of unwarranted threats, it could even constitute harassment.

Lastly, the recipient should assess the risk of legal action if they choose not to comply with the letter’s demands. They should consider the strength of the sender’s case, the potential impact on them, and whether the sender is likely to take the matter to court. Understanding these factors will help the recipient decide on their next steps.

Key Takeaways:

• A cease and desist letter is a formal warning, telling individuals or businesses to stop doing something illegal. These letters are used to address various legal problems, such as breaking contracts, infringing on intellectual property, harassment, or defamation.
• While cease and desist letters are not legally binding, they act as a first step towards possible legal action if the person or business does not follow the demands in the letter.
• It is a good idea to get legal advice when creating and sending a cease and desist letter to make sure it meets the rules and requirements under Texas law.