Cease and desist letters should be sent with care

United States of America
Under the US legal system, owners of intellectual property must be proactive and defend their rights or risk losing them. One of the ways owners of intellectual property initially enforce rights is by sending a cease and desist letter to competitors who allegedly infringe valid rights in some form of intellectual property. The problem with sending such letters is that it may also expose the sender to a possible federal law suit by the competitor/recipient under the Declaratory Judgment Act. 28 USC §2201(a) states in relevant part:

"In a case of actual controversy within its jurisdiction any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought."

Prior to the 2007 US Supreme Court decision in MedImmune Inc v Genentech Inc (549 US 118), a recipient (company A) of a single cease and desist letter claiming infringement of a trademark without more could not successfully file a declaratory judgment action seeking a ruling of non-infringement. Company A, the target of the cease and desist letter, must have had a reasonable anticipation of an infringement action being filed in federal court based on the facts of the case to successfully file a declaratory judgment action. If the owner of the alleged infringed trademark also sends similar cease and desist letters to all of company A’s out-of-state customers, that conduct by itself might create grounds for personal jurisdiction in the customers' or company A’s home states for tortious contractual interference under state law. That would open the door for a Lanham Act challenge in a declaratory judgment action. After 2007, the 'reasonable apprehension of suit test' that federal courts used to determine whether they had jurisdiction over declaratory judgment action no longer applies. Today, if a declaratory judgment petitioner claims in a complaint filed in federal court that an actual controversy between it and another is substantial and the parties plainly have adverse interests then federal court jurisdiction will be found since the controversy is imminent and real.

On October 24 2011 the New York Times sent a cease and desist letter to the Huffington Post claiming trademark infringement of its common law mark MOTHERLODE, which identified its parenting information blog. Lisa Belkin, of late the author of that blog, started and wrote the blog for the New York Times for the past three years. She recently left the New York Times and went to work as an author for a competitor, the Huffington Post, creating a new blog named Parentlode. 
 
It is this trademark the New York Times claims infringes its prior used confusingly similar MOTHERLODE mark. The New York Times' cease and desist letter to Huffington Post states: “This is a transparent attempt to capitalise on the fame and reputation of the original 'nytimes.com' blog, and constitutes an obvious infringement of the New York Times' rights under US trademark law.” 

It goes on to allege the gathering of actual confusion evidence and demands “that you immediately change the name of the blog to something original, that you withdraw your [prior filed trademark] application to register the infringing PARENTLODE, and that you make no further use of any name confusingly similar to the New York Times' intellectual property”. The letter demands a reply confirming compliance with these demands within three business days or “we will pursue all available legal remedies”. This threat includes filing a federal law suit for trademark infringement.

Clearly, this letter places the Huffington Post on notice of the existing controversy between itself and the New York Times over whether or not the two phonetically and visually different marks ending with the word 'lode' for the same type of blog are confusingly similar under the Lanham Act, 15 USC 1052 et seq. As such, the Huffington Post appears to be in a good position to petition for a declaratory judgment of non-infringement of MOTHERLODE if it so chooses. At the same time, the New York Times may file a suit alleging trademark infringement of its common law rights in its mark at any time. As of the close of business on November 2 2011 no federal law suit for infringement or for a declaratory judgment of non-infringement had been filed by either party. 

With the costs and uncertain outcome associated with federal trademark infringement litigation this fact is not surprising. Huffington continues to use PARENTLODE so it might be that the parties are actively negotiating some form of confidential settlement such as use of a disclaimer on the Huffington Post’s blog that it is not associated with the New York Times to cool the frayed and strained feelings. We will have to wait and see if this proves to be correct and successful or if ultimately litigation is commenced.

Brian Edward Banner, H & A Intellectual Property Law PLLC, Alexandria

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