Cease and Desist Letters: What to Do If You Receive One
A cease and desist letter is often the first step in an intellectual property dispute. For many businesses, receiving such a letter can be stressful: it usually alleges infringement of trademarks, designs, copyrights, or patents and demands that you immediately stop using a certain mark, product, or content.
But what exactly does a cease and desist letter mean under EU and Hungarian law, and what should your clients do if they receive one?
1. What is a cease and desist letter?
It is not a court order, but a formal demand from a rights holder asking the recipient to stop an alleged infringement. Typically, it includes:
A description of the alleged infringement.
Legal grounds (e.g. trademark or copyright law).
A demand to stop the infringing activity.
Often a deadline and sometimes a request for damages or undertakings.
Although not binding by itself, ignoring such a letter can escalate matters into costly litigation.
2. How should a business respond?
Stay calm: receiving a letter does not mean guilt is established.
Seek legal advice immediately: each case is unique, and deadlines are often short.
Do not reply impulsively: admissions can be used against you later.
Gather evidence: document your use of the mark, design, or work.
3. The EU and Hungarian practice
In Hungary, as in most EU jurisdictions, rights holders are encouraged to attempt out-of-court enforcement before initiating formal proceedings. Cease and desist letters are therefore a common tool.
Courts often look favourably on parties that tried to resolve disputes amicably. For businesses, this means responding professionally can prevent expensive lawsuits and reputational damage.
4. Practical tips for IP firms advising clients
Evaluate the strength of the claim – is the right valid and enforceable?
Check whether the alleged use truly infringes (likelihood of confusion, scope of protection, etc.).
Consider negotiation: sometimes coexistence agreements or licensing solutions are better than litigation.
Advise clients on settlement risks – including costs, damages, and reputation.
Conclusion
A cease and desist letter should never be ignored. It is a warning shot, but also an opportunity to resolve disputes without going to court. For foreign IP firms with clients operating in Hungary or the EU, understanding the local approach is essential to giving effective advice.