Cease and Desist Letter
A cease and desist letter is a formal legal notice used to notify to ask the recipient to stop an act or illegal activity that violates your legal rights. It is usually the first step you would take to stop unwanted behaviour prior to litigation. It serves as a warning to the recipients that if they do not stop what they are doing immediately, one may take legal action against them.
The letter should state the reason for the letter and specify the rights that have been infringed by the recipient’s activities. It should ask the recipient to cease such activities immediately or face potential legal action. The recipient must reply within the prescribed time and admit or refute the claim. If the recipient continues the activities after receiving the letter, one can file a lawsuit in a court with appropriate jurisdiction.
A cease and desist letter is a powerful and simple way to protect one's rights and prevent any violations from happening. The recipient is likely to take a well-written termination to cease and desist letter seriously, as most people are aware of the cost and potential impact of taking legal action.
Although there is no guarantee that actions will stop with the cease and desist letter, most recipients will see that the consequences of legal action far exceed what they are doing. Since the losing party in court is often asked to pay for the winning party’s litigation costs, the cease and desist letter is most useful in clear cases of violation of rights where the recipient is unlikely to prevail in court. In most of these cases, a cease and desist letter is usually enough to prevent the violations from happening further.
The usefulness of a cease and desist letter decreases where the violations are less clear-cut and subject to interpretation by the court. Its usefulness is directly proportional to the chance of winning in litigation when in court. If the recipient has a good chance of arguing the issue out in court, then it may choose to ignore the letter and fight it out in court. It is also less useful if the recipient cannot be identified or properly served in the jurisdiction.
A cease and desist letter can be used when rights are being violated. There are many instances when one can use a cease and desist letter for personal or business reasons:
One is not required to issue a cease and desist letter before filing a civil claim (or criminal in relation to harassment) against someone. However, for a minor violation or a small claim, it is more cost-effective to issue a cease and desist letter first to see if the matter can be resolved without going to court. This will save both parties from incurring legal expenses and court fees.
In addition, most jurisdictions encourage alternate dispute resolutions out of court. If the plaintiff is going to court directly, it may need to explain why it has not chosen to resolve the problem with a simple cease and desist letter. If the defendant is not aware of the infringement and no warning has been issued by the plaintiff, then the plaintiff is less likely to be awarded legal costs even if it wins the court case. However, if the plaintiff can show that it has issued a cease and desist letter which was ignored by the defendant, then one is more likely to be awarded legal costs and a higher amount of damages than otherwise.
One does not need to hire a law firm or a lawyer to prepare a cease and desist letter. Anyone can issue a cease and desist letter. However, one should be well versed in the law in order to prepare a well-drafted cease and desist letter. It would be helpful to consult with a lawyer who can pinpoint the rights being violated and ensure the accuracy of the facts in the letter. A lawyer can also help one to understand whether there are sufficient reasons to take legal action, what is the best course of action, and whether there are other more suitable avenues for recourse.
Obviously, the recipient is also more likely to take a cease and desist letter from a law firm more seriously since it shows the sender is prepared to take legal action.
As a general guide, a simple cease and desist letter would normally consist of the following:
1. Details of the Sender, including the name and address
2. Details of the Recipient, including the name and address
3. Describe the Recipient’s activities in detail and any negative effects that the activities may have on the rights of the Sender.
4. Warning to the Recipient that if such activities do not cease, legal actions (civil or criminal proceedings) will be taken.
5. Deadline for the activities to cease.
One should be specific and accurate when giving details on the facts. Adding false information may have serious negative consequences. It also helps if one is able to support the legal claims with the relevant law or regulations. This not only shows to the recipient that the sender has done the legal research and is serious about the matter.
One should send the cease and desist letter by registered mail to the recipient. The registered letter receipt will accurately show the time of delivery and that the recipient has received the warning.
Example – Intellectual Property Violation
In a cease and desist letter alleging the violation of intellectual property rights, it is important to include:
1. Identification of the specific intellectual property right – e.g. trademark or copyright.
2. How the recipient has violated such rights, giving details of the infringements.
3. Ask the recipient to cease and desist the violation or perform specific actions.
You should provide details but not enough for the recipient to modify its product to avoid intellectual property liability.
If after receiving the cease and desist letter, the recipient ignores the letter and continues the activities, then there are several remedies one could pursue:
1. One could file a civil lawsuit, and request an injunction from the court to require the recipient to stop the activities, harassment or infringement.
2. Claim for damages if one has suffered losses (including loss of profits) because the recipient did not comply with the cease and desist letter.
3. Go to the police to file a criminal complaint if the conduct of the recipient constitutes criminal activities.
Ironically, sending multiple cease and desist letters could also constitute harassment, in particular, if the allegations are untrue or the grounds are unfounded. As such one will need to establish proper grounds before sending the letter and take action if such letter is ignored. As opposed to sending multiple letters.
If one is the recipient of a cease and desist letter, one should consider whether such allegations are true and if the sender has the right as claimed, and the probability of winning in court in case of legal action. If the allegations are true and there is a clear violation of rights, then it might be best to cease the activities alleged. If the claims are false or are unfounded, then one may choose to ignore the letter. Most instances would fall somewhere in between and it would be a good idea to consult your legal counsel.
Even if the cease and desist letter is sent by a law firm, bear in mind that the termination notice is just a lawyer's opinion on the law. That does not mean that it will prevail in court. Please also keep in mind the prohibitive costs of litigation, and one may wish to take the chance that the plaintiff may not pursue an action that is not clear cut with an unknown chance of winning.
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