Received a threatening letter?

Receiving a letter that you are infringing someone else’s intellectual property rights is never good news. 

For large businesses, such threats may be reasonably common and just one of the many hassles of running a successful business, however to the entrepreneur or small business owner, a threat of legal action can be very distressing.  Some intellectual property owners may send vague meritless threatening letters in the hope of an easy license fee or payment.  Other intellectual property owners may send very specific letters demanding that certain conditions are met or undertakings made by a specific deadline, some of which could never be legally enforced.  Whatever the nature of the letter, it should be investigated and taken seriously in the first instance. 

The first thing you should do if you receive a letter alleging that you are engaged in some type of infringing activity, is to assess the basic facts.  Specifically, are you even producing any goods or providing any services that are related to the intellectual property right in question? 

The letter should provide specific details of what rights you are infringing, that is, whether it is a patent (including the relevant patent registration number(s)), a design (including the relevant design registration number(s)), a trade mark (including the relevant trade mark registration number(s)), copyright, passing off or other intellectual property right.  The letter should also identify the specific acts or activities which are infringing.  If these basic details are not provided in the letter, you may have a defence against certain damages on the basis that you have not officially been given notice of the alleged infringement. 

The second thing you should do is to contact an intellectual property professional, i.e. a Patent or Trade Mark Attorney.  Do not contact the author of the letter or the intellectual property owner before contacting an attorney, as you may not be fully informed and may end up giving something away or lessening your chances of achieving a positive outcome.  Your attorney will assess the letter, check the facts and the status of the intellectual property right in question to see whether it is current and investigate its validity.  A warning letter containing groundless allegations or statements could give you the right to bring an action against the owner of the intellectual property on the basis of groundless threats. 

On the other hand, if the allegations in the letter are accurate, your attorney can advise you on the best solution or strategy going forward, taking into account the economics of it, and what outcome you hope for.  Many issues can be resolved quickly and cost effectively following informed discussions between the parties.  Your attorney can also help you identify options to limit liability and to avoid unnecessary disruption to your business.  These options might include settlement options such as negotiating a license, or a cross license arrangement, or making some changes to your activities to avoid infringement.