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.
