Can you get sued for sending a cease-and-desist letter?
Yes, you can get sued for sending a C&D letter. It’s called a declaratory judgment lawsuit. Before you send that cease-and-desist letter, understand this risk and gauge the probability of the other side escalating the fight.
What is a lawsuit for a declaratory judgment of noninfringement?
In a declaratory judgment (DJ) lawsuit, the tables are turned. The plaintiff is the accused infringer while the defendant is the owner of the patent or trademark. By filing a DJ action, the plaintiff is asking the court for a decision declaring that their accused product does not infringe the owner’s patent or trademark.
Why would accused infringers file DJ legal actions?
Typically, a DJ lawsuit is filed in the accused infringer’s home state which can cause greater legal fees and other inconveniences for the IP owner. In many cases, the IP owner will need to hire local counsel in addition to their lead counsel.
For example, suppose a patent owner and its patent attorney are based in California. A cease-and-desist letter is sent to an accused infringer based in Illinois. The accused infringer files a lawsuit in a federal district court located in Chicago, seeking declaratory relief stating that the accused product does not infringe the asserted patent. The defendant-patentee now needs to hire local counsel in Chicago in addition to their lead attorney in California.
Now, suppose the plaintiff (accused infringer) merely files the DJ lawsuit, but refrains from serving the defendant-patentee. Perhaps the accused infringer may be playing the first-to-file game in case the dispute escalates. In other words, the accused infringer may not want to litigate, but is reserving their preferred venue in their home state in case the patent owner decides to pursue litigation.
What can increase the chances of a declaratory judgment lawsuit?
A handful of factors can increase the odds of a DJ lawsuit:
- The state in which the accused infringer is based is different than that of the IP owner;
- The accused infringer likely has sufficient financial resources to fight an infringement lawsuit; and
- The amount at stake warrants the litigation costs or at least the initial filing costs.
As discussed above, the mere filing of a DJ lawsuit does not necessarily mean that the parties must engage in litigation. In many cases, the accused infringer may want to seek an early, amicable resolution. Filing the noninfringement DJ lawsuit first in their home state could serve as leverage in seeking a more favorable resolution.
What are strategies to prevent a noninfringement DJ lawsuit?
To reduce the risk of a noninfringement declaratory judgment, a patent or trademark owner has options.
First, consider the possibility of using a third party platform to resolve the dispute. For example, if the accused products are sold on Amazon, consider using Amazon’s IP enforcement options.
Second, consider filing your trademark or patent infringement complaint in the federal court of your home state before sending your cease-and-desist letter. That way, the filing date of your infringement complaint will precede their DJ filing date.
Lastly, de-escalation is worthy of consideration. One of the requirements of a declaratory judgment claim is the need for an actual controversy. To circumvent this case or controversy requirement, your cease-and-desist can be written in such a way so as to avoid an accusation of infringement. Consult experienced patent or trademark attorneys who are familiar with softer language to steer clear of controversy.
Need to send a cease-and-desist letter without getting sued?
Call patent and trademark attorney Vic Lin at (949) 223-9623 or email firstname.lastname@example.org to explore how can we help enforce your IP rights without getting embroiled in expensive trademark or patent litigation.
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