Knowing when to send a demand letter and what to do when you receive one is an incredibly powerful tool for successful businesses
A cease-and-desist letter is a warning to businesses or individuals to stop certain harmful actions. The letter may even threaten legal action if the recipient does not comply.
If you receive a cease-and-desist letter, also known as a demand letter, take it seriously and understand your options, but do not panic. Consider it an opportunity for you and your attorney to have a dialog with the other party with the intent of avoiding litigation.
What Is a Cease-and-Desist Letter?
A cease-and-desist letter is different from an order. An order, such as a court-ordered injunction, is a legal order to do or cease doing a specific action. A letter merely contains the opposing attorney’s legal opinion; it is not enforceable. The letter may also contain a warning to the recipient that the sender will take legal action if the prohibited action does not cease.
Cease-and-desist letters may allege that the recipient:
Misappropriated trade secrets
Infringed on a copyright or trademark, or permitted others to infringe on copyright via their platform
Violated a non-compete or non-solicitation agreement
Committed tortious conduct (a civil wrong for which courts may impose liability)
Committed slander, libel, or defamation
Breached a contract
Often, we see a cease-and-desist letter sent to an employee by a former employer alleging the violation of a non-compete, non-solicit, or other agreement. In other typical cases, a media company, individual, or entity may send a cease-and-desist order to another party that is using their intellectual property or taking credit for their work.
There are usually five components to a cease-and-desist letter:
Identifying information about the parties involved
A description of the alleged harmful activity
A formal demand for the behavior to stop
A warning of potential consequences should the activity continue
The time limit for compliance
Is A Cease-and-Desist Letter Enforceable?
A cease and desist order is not enforceable as a legal document. However, this does not mean a cease-and-desist letter should be ignored. Cease-and-desist letters can be used as evidence against you if the dispute becomes a lawsuit.
The letter demonstrates to the courts that the sender advised you that your actions were unacceptable. If you continue to violate the terms of the letter, it is proof that you knowingly and willfully continued the disputed behavior. You can no longer claim that you were unaware of the alleged violation.
What Should I Do If I Receive a Cease-and-Desist Letter?
If you are served with a cease-and-desist letter, contact a business law attorney immediately. Your attorney will review the letter and any related contracts or verbal agreements and advise you on the best next steps.
Your attorney can also help you avoid actions that may expose you to further legal risk. For example, taking to social media to complain about a cease-and-desist letter could result in more aggressive litigation and be used as further evidence against you.
Do I Need to Respond to a Cease-and-Desist Letter?
Yes, you should respond to a cease-and-desist letter but do not respond rashly or without the benefit of legal advice. Even if the allegations are unfounded, you should review the letter with a business litigation attorney to make an informed decision.
Here are some options your attorney may recommend:
Respond with a refusal or request for further information;
Comply with the letter’s demands;
File for summary judgement (a pre-trial motion asking the judge to rule based on undisputed facts); or
File a preemptive lawsuit.
Never attempt to respond or retaliate against a cease-and-desist letter without legal guidance. An experienced business law attorney can help protect your interests and pursue the best possible outcome.