What would be the best possible response to a legal warning letter, which includes allegations for trademark infringement? This complicated question requires a deep understanding of the legal situation and the particular circumstances of each case. In this article, a trademark attorney from our firm will discuss different strategies and important case studies regarding this important topic.
Decker & Ofir is an Israeli-based boutique law firm, specializing in trademark law and intellectual property (IP). The firm represents Israeli and international clients in IP legal matters. The services offered by the firm include representation in trademark legal matters, litigation, portfolio management, etc.
Warning: Legal Letters Can Lead to Court Proceedings!
When a trademark owner learns about an alleged infringement of her trademarks, she would often take legal actions against it. There are different possible actions that can be taken. One might think about bringing a lawsuit to court as a first action. It is technically possible to do so. However, in most cases it is customary to send a warning letter (also known as “Cease & Desist Letter” or “C&D Letter”).
What should the other party do when receiving such a letter? Avoiding it will certainly be risky, as the next step by the trademark owner could be court proceedings. What should be the right strategy to handle a legal warning letter then? As we will present below, there is no one-size-fits-all-solution. Each case should be treated according to its particular circumstances. Below we will present different strategies that can be taken. We will do so based on our experience with handling similar cases.
What is a Legal Letter?
A C&D letter, in legal terms, usually refers to one party noticing another party of an alleged unlawful activity, requesting its stoppage. Sending a legal warning letter is a common practice in civil cases, and particularly in intellectual property (IP) matters. For instance, trademark infringement, copyright infringement, trade secret misappropriation, etc.
In Israel, like many other countries, C&D letters are very common in IP matters. They enable in many cases to prevent the dispute from reaching to court, and thus save time and resources from the parties. Below we will elaborate on what can be done in cases of receiving a C&D letter by another party.
What is the right thing to do when you receive a warning letter due to a trademark infringement?
There is no one answer with regards to the strategies one should choose from when receiving a legal warning letter. Answering the letter in an incautious way might lead to some very undesired results. It could cause a damage of tens of thousands of dollars and even beyond.
Yet, a complete avoidance from answering the letter might have a negative effect as well. Should the case reach to court eventually, the court will usually examine whether the parties could have solved the case privately beforehand. Thus, it is very important to calculate your steps wisely.
Related Case of Trademark Infringement
It is important to note that in their judgement, the Israeli courts often refer to warning letters that were sent before bringing the lawsuit to court. They may further acknowledge whether the letters were responded to or not. Avoidance from responding to a warning letter can lead to some unwelcome legal consequences. If the court would conclude that an infringement did occur, this could influence the amount of damages the defendant would have to pay.
A recent case in this respect is the case of Aminach (2019). The district court in Haifa (North of Israel) ruled in favor of the plaintiff, a popular mattress and bedroom Israeli chain. The latter sued its former employee. The former employee opened a competing store, using the plaintiff’s slogan (which is a part of its registered trademark).
Before filing the lawsuit, the plaintiff sent the defendant 2 warning letters. The former employee did not respond to both. The court held that the acts constitute trademark infringement and passing off.
The court ruled damages in favor of the plaintiff. The sum of the damages was 90,000 ILS (approx. 25,000 USD). This is almost the highest amount of damages that can be awarded without a proof of damage (100,000 ILS). Not ignoring the letter could have led to a different result in this case.
How Can a Trademark Attorney Help?
There are various issues that need to be inspected in order to conclude whether an infringement actually occurred. For instance, there is a need to verify whether the allegedly infringed trademark is registered in the territory, and under what classifications. Furthermore, the particular protection granted to the trademark needs to be checked. A trademark attorney can review the specific circumstances of the case, and help reach the right strategy among the different possibilities.
Can an Infringer be Sued Abroad?
The answer to this question also depends on each cases’ particular circumstances. Nevertheless, it is generally possible to file a lawsuit against an infringer who is located abroad. It can be that a foreign trademark owner would sue an infringer in Israel. And it can also be that an Israeli trademark owner would file a lawsuit in the infringer’s country. Thus, when a legal warning letter arrives on behalf of a trademark owner in another country, one should not underestimate its potential to lead to court proceedings.
The Israeli Civil Procedure Regulations enables foreign plaintiffs to sue in Israel. The regulations further include a legal mechanism which allows to invite a defendant outside the Israeli territory.
One argument which could allow it is that the lawsuit’s claims are based on actions that occurred in Israel. This could enable suing an infringer from abroad, if the infringer is related to actions that took place in Israel. For instance, an international company whose Israeli branch was allegedly in charge of infringing a registered trademark.
In both cases (of suing an infringer in Israel or inviting a foreigner infringer) there are several criteria to meet for the Israeli court to be able to rule in the matter. The main question in this regard is whether in the particular case, the Israeli court is the forum of convenience. It is not always an easy thing to determine, and it depends on the circumstances of the case at hand.
Deciding what is the most appropriate response to a legal warning letter in cases of trademark infringement allegations is a challenging task. There are many different factors that need to be taken into account. It includes questions like whether trademark registration took place and what is the trademark’s strength. Also there is the question of whether it is possible to sue in Israel under the particular circumstances.
The response to a legal warning letter can thus be in many different ways. In some cases it might be beneficial to defend against the allegations in a detailed response. In other cases it can be beneficial to invite the other party to an arbitration or mediation meeting, in order to solve the case outside the court.
Although ignoring the letter is a possible strategy, it is very hard to predict how the court will view such a behavior. In any case, it is highly recommended to avoid handling the case on your own, without understanding the possible legal outcomes.
For more questions and inquiries about a response to a legal warning letter with trademark infringement allegations, you can contact us. An attorney from our firm will gladly assist you with any related issue. The law firm of Decker & Ofir is well experienced with representing Israeli and international clients in trademark matters.