Trademark Demand Letters: Empty Threats Can Be Costly

You’ve worked to come up with a brand that you are proud of that embodies the promise your company makes to consumers with its products and services. You registered your trademark and worked to infuse the mark with your brand message. But then you see someone else using a similar mark that seems too close to your own. “They can’t do that,” the CEO tells legal. “Make them stop!”

There is a lot to go into concerning enforcement of trademark rights and the requirements to carry a claim of infringement under the law. But short of all that, what is seen as a simple demand letter should be carefully considered before you send such a shot across the bow. Sometimes your fire will be returned, and you have to be ready for it.

First, all the i’s must be dotted and t’s crossed to be sure that you actually have the senior rights in your mark. While this Johnny-come-lately may be new to you, it may have actually preexisted you and have seniority. You just don’t know what you don’t know and it is imperative to confirm seniority before making any contact concerning the mark. After all, if you are the junior user, your letter will likely be met with something to the effect of “thanks for letting us know—we agree there is confusion and you need to immediately cease use of your infringing mark.” In that case your metaphoric pounding of the table concerning the likelihood of confusion between the marks is not going to do you any favors. Trademark use investigation services are a great tool to make such a determination.

But even assuming you have confirmed your seniority, a demand letter may still not be advisable. What will you do if the letter is ignored? If the answer is not that you will litigate as threatened (or at least implied) in the demand letter, then it probably is not worthwhile to make a demand at all.

With any demand, you must be prepared for the litigation that could be triggered even if you don’t yourself file an action. A demand can invite a declaratory relief action—a request that a court issue an order clarifying the rights and responsibilities of the parties. Indeed, the availability of declaratory relief creates significant risk. Such a declaratory relief action filed by the target can result not only in unwanted litigation with the attendant costs and risk of damage and fee awards, but also the unexpected consequence of seating the dispute in an inconvenient forum. Such a suit will be filed by the demand recipient in its home jurisdiction, which may be inconvenient for you, and fighting jurisdiction will be difficult where you have directed threats of litigation at the recipient.

Not every demand, though, will serve as a basis for a declaratory relief action. As is true for jurisdiction in general, there must be a substantial controversy between the parties, and the courts have defined whether such a controversy exists by whether the parties have “adverse legal interests of sufficient immediacy and reality to warrant the issuance of a declaratory judgment,” as in MedImmune v. Genentech, 549 U.S. 118, 127 (2007). This is determined by looking at whether the plaintiff seeking declaratory relief has a reasonable apprehension of litigation considering the tone, language, and context of the demand (See Sony Electronics v. Guardian Media Technologies Ltd., 497 F.3d 1271 (9th Cir. 2007)), or by looking at the “totality of the circumstances” including but not limited to actual threats of litigation, the past litigiousness of the author of the demand and/or its counsel, specific allegations of wrongdoing, and/or whether the demand included a deadline for compliance. See MedImmune, supra; see also, Prasco LLC v. Medicis Pharmaceutical, 537 F.3d 1329 (Fed. Cir. 2008).

On the other hand, vague and/or general discussions of the issues that do not imply an imminent threat of legal action are unlikely to support a claim for declaratory relief and would be likely to be dismissed for lack of jurisdiction due to the absence of an actual case or controversy. Mere information requests, negotiations, or requests to discuss potential disputes will likely fall into this category.

With the risk of declaratory relief in mind, the letter you want to send (or not send) may change. Is it worth letting the target know you are concerned? It certainly could be. But unless you are willing to take actual legal action, it is risky to threaten to do so. That may be a risk you are willing to take, though, if that’s the case, it might be worthwhile to do so in conjunction with sending the demand. There will be no question as to whether you are bluffing, and you will be in a much stronger position to litigate in the venue of your choice.

At the end of the day, demand letters form an important part of a company's trademark enforcement strategy. But they must be just that—a part of a fully developed reasoned strategy rather than a knee-jerk reaction to perceived infringement. And that strategy will require some investigation and research to help ensure success.

Reprinted with permission from the February 20, 2025 issue of The Recorder © 2025 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.