Receiving a warning letter in trademark law: What to do?
In trademark law, a warning letter is a common instrument for settling disputes out of court. It is used to object to a possible infringement of rights and to request the warned party to cease and desist.
The other party is usually presented with a cease-and-desist declaration with a penalty clause, which it is asked to sign in order to avoid a legal dispute.
This article explains the most important legal principles, typical scenarios and provides practical tips on how to react correctly to a warning letter in trademark law. This will help you protect your rights and minimize legal risks.
Legal basis for warning letters in trademark law
Trademark law protects signs that are suitable for distinguishing the goods or services of a company from others. The basis for this is the German Trademark Act (MarkenG), which regulates the prohibition of trademark infringement and the rights of the trademark owner in § 14.
Accordingly, a trademark owner has the right to issue a warning letter to third parties if he discovers an infringement of his trademark rights. The warning letter fulfills a dual function: it protects the trademark from further infringements and enables an out-of-court settlement of the dispute in order to avoid costly court proceedings. In most cases, the warning letter is the necessary first step before claims for injunctive relief and damages can be asserted in court. It offers the parties involved the opportunity to resolve the conflict quickly and efficiently.
Typical reasons for a warning letter in trademark law
The most common reasons for a warning letter under trademark law are
- Use of an identical or similar trademark: If a trademark is used without the consent of the rights holder in a way that creates a likelihood of confusion - for example by using an identical sign for identical or similar goods and services - this generally constitutes trademark infringement
- Passing off or dilution: In the case of well-known trademarks, unauthorized use for dissimilar products can also justify a warning letter if this exploits the good reputation of the trademark (passing off) or weakens its distinctive character (dilution).
- Unauthorized registration of a trademark: The registration of a trademark that conflicts with existing trademark rights can also be cautioned. This applies in particular if the applicant has made a registration in bad faith.
Content and purpose of a warning letter
A warning letter under trademark law usually contains the following elements:
- A statement of infringement: The trademark owner explains why it assumes that its rights have been infringed.
- Request to cease and desist: The person being warned is requested to cease the infringement in question and to submit a declaration to cease and desist with a penalty clause.
- Claims for costs: In the warning letter, the lawyer's fees incurred as well as damages are claimed.
- Setting a deadline: A short deadline is usually set within which the cease-and-desist declaration must be submitted.
- The aim of a warning letter is to settle the legal dispute out of court and prevent a further infringement of the law.
Side note: Approach to your own warning letter
If you discover a trademark infringement and want to protect your rights with a warning letter, a careful approach is crucial. A warning letter is not only a legal instrument, but also a binding request that must meet certain formal and content-related requirements.
First of all, you should ensure that your trademark rights have actually been infringed. A thorough legal assessment is essential here in order to avoid unjustified or excessive claims, which could otherwise have legal consequences such as counterclaims.
The warning letter should clearly state the infringement, contain a cease-and-desist declaration and set a reasonable deadline. The calculation and claim for damages or reimbursement of costs must also be precise.
An unprofessionally formulated or unjustified warning letter may not only be ineffective, but may also lead to counterclaims (e.g. from a negative declaratory action). Our law firm supports you in the legal assessment and preparation of a legally compliant warning letter. With our expertise, we ensure that your claims are enforced consistently and in accordance with the law - without unnecessary risks for you.
Trademark law: How should you react to a warning letter?
If you receive a warning letter in trademark law, quick and considered action is crucial. The following procedure is recommended to minimize legal and financial risks:
- Do not sign prematurely: The cease-and-desist declaration should not be signed without prior legal examination. The warning party's demands are often too broad and could unnecessarily restrict the warned party.
- Check justification: First of all, it should be clarified whether the warning letter is justified. This requires a precise analysis of the warning party's trademark rights, the use complained of and possible justifications for the use.
- Obtain legal advice: It is advisable to consult a lawyer specializing in trademark law in order to assess the legal situation and, if necessary, to draw up a modified cease-and-desist declaration.
- Meet deadlines: Although the claims should be checked, it is important not to ignore the deadline set. Failure to meet the deadline may result in the other party initiating legal proceedings, which are usually associated with significantly higher costs.
Consequences of ignoring a warning - explained by a trademark lawyer
Ignoring a justified trademark warning can have serious consequences. If the warned party does not respond or ignores the deadline set, the trademark owner has recourse to the courts. In such cases, a temporary injunction is typically applied for or an action is brought directly to enforce the injunction claims.
Court proceedings are associated with significantly higher costs than an out-of-court settlement. These include court costs and the trademark owner's legal fees, which usually have to be borne by the unsuccessful party. There is also a risk of claims for damages if the trademark infringement has caused economic damage.
In addition to the purely financial burdens, there is also the risk of a loss of reputation, especially if the dispute becomes public. This can result in considerable damage for companies, especially in the case of well-known brands.
Anyone who receives a warning letter should take the deadline set seriously and have the allegations investigated. A timely and professional response can help to avoid legal proceedings and unnecessary costs. Our law firm supports you in making the most of your legal options.
Preventive measures to avoid warning letters
Warning letters in trademark law can not only be expensive, but also damaging to business. To avoid such disputes, a thorough trademark search is essential before using or registering a new trademark. The search ensures that the planned trademark does not infringe any existing trademark rights. This applies both at national and international level, especially if products or services are offered across borders.
On the other hand, ongoing monitoring of your own trademark is recommended for you as the trademark owner. With professional monitoring, you can identify potential infringements at an early stage and react promptly to enforce your trademark rights.
Our law firm supports you with comprehensive research and monitoring. With our expertise, we help you to minimize legal risks and protect your trademark in the long term. Professional assistance with trademark research and monitoring is not only a sensible form of protection, but also an investment in the security of your company.
Conclusion: Take warning letters seriously and respond professionally
A warning letter under trademark law should always be taken seriously. It is an important instrument for protecting trademark rights, but also harbors risks for the warned party if the claims are unreasonable or unfounded.
It is advisable to consult a specialized lawyer immediately upon receipt of a warning letter. A well-founded legal examination and a carefully formulated response can help to minimize the legal and financial consequences.
As a law firm specializing in patent and trademark law, we support you in the legal assessment and handling of warning letters under trademark law. Whether you have received a warning letter yourself or would like to enforce your trademark rights - we will provide you with comprehensive advice and develop a tailor-made strategy.
Benefit from our decades of experience in the enforcement and defense of trademark rights. We check whether the warning letter is justified, draw up modified cease-and-desist declarations and represent you in negotiations or court proceedings.
Contact us for a not-binding initial consultation - in person or digitally. With our expertise, we are at your side in every phase of the proceedings.