Advice on cease and desist letter
Have you received a cease and desist letter after using photos without permission or downloading a film from a file-sharing service (illegal file sharing)? Or perhaps you are an entrepreneur who has construed competition law somewhat liberally? It is essential that you now act quickly and, above all, correctly in order to keep any damage arising from this notice to an absolute minimum. But how should you best react in this kind of situation?
What is a cease and desist letter ?
In the eyes of the law, a cease and desist letter is an indication of legal misconduct. It serves to resolve a violation of the law out of court fully. Many legal grounds may warrant a cease and desist letter.
The most common reasons are:
- Infringement of competition, e.g. relating to advertising (notice issued by a competitor)
- Infringement of copyright
- Use of file-sharing sites, BitTorrent and online exchange services
- Unauthorised use of photos
- Violation of trademark law
Declaration of discontinuance with a penalty clause
In most cases, a written cease and desist letter goes hand in hand with a declaration of discontinuance with a penalty clause, as well as a lump-sum claim for damages. The notice will specify the action or behaviour that the recipient is to refrain from in future, besides demanding that damages be paid for the infringement already committed.
Upon signing a declaration of discontinuance, the recipient pledges to refrain from committing the alleged statutory violation again. You should therefore only ever sign this kind of declaration after giving this statement some serious thought. Moreover, this type of declaration usually comes with a few hidden dangers that should be checked over by a lawyer before being signed. A declaration of discontinuance or formal obligation with a penalty clause constitutes an agreement that is legally binding for both parties.
Keep your cool – contact a lawyer!
If you receive acease and desist letter, it is important that you remain calm and avoid doing anything rash, for example calling the law firm that has sent the letter. You should also refrain from email contact to make sure you do not get carried away making statements that will be difficult to retract further down the line.
It is, however, vital that you not simply let the matter rest and do nothing. Ignoring a cease and desist letter could signal the start of a slippery slope: an interim injunction might be issued if you do not react to it at all – even if you never committed an infringement, to begin with!
What can we do if you have received a cease and desist letter?
It is our job first to check whether the notice has been issued legitimately and whether there is indeed evidence of misconduct on your part. What happens next is mostly dependent on the outcome of this initial review.
Once this is clarified, we will look more specifically at the content of the declaration of discontinuance or formal obligation with a penalty clause. A modified declaration of discontinuance may usually satisfy both parties and thus settles the dispute without having to go to court.
As a final stage, we will review the costs associated with the warning, which are made up of the following three items:
- Lawyer’s fees
- Damages
- Assessment costs
After reviewing the individual cost items, we can then determine how promising the situation is, i.e. whether it is worth raising a defence against the notice – together with a declaration of discontinuance or formal obligation with a penalty clause.
