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'Cease and Desist!':
a guide to assessing & responding to cease and desist letters

Step 3. Learn the potential consequences.

After assessing all the facts, the recipient of a cease and desist letter can then begin to understand the potential consequences.

Generally, if the recipient refuses to accede to the cease and desist letter's demands, it is up to the sender to take further action. The sender has several options: continue trying to work with the recipient; contact a third party, such as the recipient's ISP or employer; or initiate a formal legal or procedural response.

Formal legal actions

Once a rightsholder files a lawsuit, he may ask the court for several different forms of relief, assuming he can prove his legal claims. First, if someone is found liable for copyright or trademark infringement, a court may grant an injunction — that is, order her to stop the infringing activity. Second, a judge can grant money damages to compensate the rightsholder. Some judges may prefer to grant damages rather than injunctions for some copyright infringements. On the other hand, if money damages won't repair the damage — as in publishing a private email — the court may be more likely to order an injunction.

Damages awards can vary widely, depending on how much the infringer profited, how much the rightsholder was harmed, whether the infringer acted "willfully" or "innocently", and whether the copyright or trademark is registered with the U.S. Copyright Office or Patent & Trademark Office. In copyright law, for instance, "statutory" damages can range from anywhere from $250 to $150,000 per infringement. If the copyright or trademark is not federally registered, then usually the rightsholder can only recover "actual damages", or a percentage (maybe all) of the infringer's profit.

Occasionally, courts can order trademark- or copyright-infringing goods to be impounded or destroyed.

In disputes over Internet domain names, courts may order the domain name to be transferred to the rightsholder. Instead of a lawsuit, the rightsholder can also file a claim with the Internet Corporation for Assigned Names and Numbers ("ICANN"). ICANN has a "Uniform Domain Name Dispute Resolution Policy" ("UDRP"), and ICANN can also order that the domain name be transferred to the rightsholder.

Some copyright infringements may rise to the level of criminal behavior. A court may impose criminal penalties — up to ten years for repeat infringers — if the infringement was for purposes of commercial advantage or private financial gain, or the infringer reproduced or distributed more than $1,000' worth of copies.

Third-party interventions

Finally, some third parties — people other than the rightsholder and the alleged infringer — may have a legal duty or a policy requiring them to respond to complaints from rightsholders. For instance, an ISP may have a policy of taking down material or disabling accounts when they receive accusations of trademark infringement. Similarly, copyright law strongly encourages ISPs to take down material when they receive accusations of copyright infringement — DMCA § 512 takedown notices. Even outside the context of § 512, an ISP's subscriber may have the right to file a counternotice, depending on the ISP's policy and terms of service.

Learn more:

• Copyright infringement penalties.
• Trademark infringement penalties. (coming soon)

Next Step: Assess the options and take action