International Law

Cease And Desist Letters For China IP Violations. They Can Work.

By Dan

Many years ago, a very good client of ours was sent a cease and desist letter from their chief competitor. It turned out that our client was inadvertently bringing in product from China that directly infringed on a trademark owned by our client's chief competitor. The chief competitor was very unhappy with our client (who had used another firm when checking out this particular trade name) and wrote a letter telling our client that if it did not immediately destroy all of the boxes with the offending trademark and pay them $25,000 in attorneys' fees, it would seek punitive damages against our client for counterfeiting.

Our advice to our client was to settle immediately and seek reimbursement from the offending law firm, which is exactly what ended up happening. The letter from our client's competitor was so tough, and so well-written that my firm has used a similar version ever since and whenever one of our clients is faced with another company improperly using our client's intellectual property, we send out such a letter and call it "going [name of the company that initially used the letter] on their ass." 

As you can imagine, we have had to write a lot of these cease and desist letters to Chinese companies. We generally like them and here is why.

If you are faced with someone in China using your IP, you can pursue either administrative remedies of court remedies. Either way though, you will likely need to spend quite a bit of money on lawyers and it will take time for you to get any results. The cease and desist letter (usually called a "lawyer's letter" in China) will almost certainly be faster and cheaper, assuming it works.

We find these letters usually (but certainly not always) work if the company to which you are sending the letter is a legitimate company, but they virtually never work if it is not. The legitimate company usually does not want to risk its reputation or money on a losing claim, but the fly-by-night company typically does not care. It is essential that these letters be written in Chinese and refer specifically to the legal and factual basis of your claims. 

Not only does it not usually make sense to send out such a letter to a fly-by-night company that is almost certainly just going to ignore it, it also does not make sense to send out such a letter if it is important that you catch the offending company unawares with your law suit. It is oftentimes a good idea to secure an evidence preservation order from a court and you typically want that order to hit the offending company completely unawares so that its time to destroy evidence is minimized.  

These letters can work well for all sorts of IP violations, including where someone is using your trade secrets.

What have you found with these?

Full post as published by China Law Blog on February 03, 2011 (boomark / email).