Showing posts with label cease and desist letter. Show all posts
Showing posts with label cease and desist letter. Show all posts

Friday, May 10, 2013

The Declaratory Judgment Complaint -- Being Quicker on the Draw

As a routine practice, a brand owner's trademark lawyers send formal cease and desist letters to companies or persons who become accused of using a confusingly similar name or design without authorization.  

Such a letter is often sent before a lawsuit is filed.  
It is not legally necessary for a brand owner to send such a demand letter, but (depending on the circumstances) many brand owners believe that it is helpful to give notice before filing suit.

This process also allows the accused infringer to settle potential litigation for smaller (or no) damages, depending on the circumstances.  

For example, some infringers may agree to share their sales figures of accused products, and in doing so, deter the brand owner from seeking excessive damages.

Of course, there is never a guarantee that the brand owner will agree to settle, and these documents can have the opposite effect, and end up fueling litigation.

Trademark lawyers send out dozens, hundreds -- even thousands of such demand letters each year.  Most of the time, the recipients apologize, comply with the letter's demands and move on.
 In some cases, the unwise recipient just ignores the letter, leading to a second, usually more aggressive letter or a lawsuit.

But in some rare cases, if the recipient of a letter receives what could be interpreted as a legally baseless or overly aggressive threat leading to a reasonable apprehension of imminent litigation, he may opt for a highly aggressive strategy -- sue the brand owner first.  
In other words, he is quicker to the draw in gunslinger terminology.

This process is called invoking declaratory judgment jurisdiction.  The reason is that the plaintiff is seeking a "declaration" that he is not infringing.

Upon receiving a cease-and-desist letter, the recipient may seek a tactical advantage by instituting declaratory judgment litigation in a more favorable jurisdiction.
  The end result may require the sender of the cease and desist letter to appear in a distant court, at their own expense, in a case that it never would have actually brought.

The declaratory judgment plaintiff also could catch the overly aggressive brand owner off guard, and put it in the posture of being a defendant rather than a plaintiff.
  This tactic seems to have worked, at least initially, for the recipients of a cease and desist letter from the Subway sandwich chain's lawyers.

In 2011, Subway's lawyers sent a cease-and-desist letter to Casey’s General Stores, a midwest convenience store operator, demanding that it stop using the word “footlong” to describe its sandwiches.

Casey’s struck back with a declaratory judgment lawsuit against Subway, arguing that the chain has no trademark rights to what it considered to be a generic term.

The suit noted that Subway has tried to register the mark protection for “footlong,” but was refused by a trademark examining attorney who was skeptical of the distinctiveness of the term, noting that restaurants across the country use the word to describe submarine sandwiches on their menus.

Thus, Subway became the unwilling defendant in a declaratory judgment case brought by an accused infringer, putting the validity of its very trademark in jeopardy.