Receiving an IP Demand Letter

What a demand letter is (and isn't).

A demand letter, sometimes called a cease-and-desist letter, is a private accusation that a business is infringing someone's intellectual property, with a request to stop, pay, or both. It is not a court order or a lawsuit, and it does not by itself establish infringement or the validity of the sender's rights.

It still matters. A demand letter puts the recipient on notice, and later decisions about documents, communications, and product changes can affect damages, willfulness findings, and credibility if the dispute reaches court.

Demand letters arrive in every area of intellectual property. A patent owner may claim that a product practices its claims; a brand owner may claim that a name confuses customers; a copyright owner may claim that content copies its work; a former employer may claim that trade secrets were taken. The details differ by type of right, but the early steps are similar.

Common mistakes.

Recipients often make these mistakes in the first days after a letter arrives:

• Ignoring it. Silence does not make the letter go away. It can be read as indifference, it forfeits the chance to resolve the matter cheaply, and in patent cases, continued conduct after notice can support enhanced damages for willfulness.
• Responding without counsel. A quick denial, an angry phone call, or a "we'll look into it" email can become an exhibit. Admissions about what the business sells, how it works, or when the business learned of the patent are difficult to walk back.
• Deleting documents. Once litigation is anticipated, and a demand letter can trigger that duty, the business must preserve relevant documents, emails, source code, and data. Deleting material after receiving a letter can lead to sanctions far worse than the underlying claim. Businesses typically issue a litigation hold right away.
• Discussing it widely. Knowledge of the letter should be limited to those who need to know. Internal emails speculating about infringement are discoverable.
• Changing the product in a hurry. A hasty redesign can look like an admission, destroy evidence of non-infringement, and still not moot the claim for past damages.

Typical first steps.

Businesses that receive a demand letter usually take these steps first:

1. Preserving documents: The business issues a written litigation hold covering the accused products, relevant communications, design documents, and source materials, and suspends routine deletion for the people and systems involved.
2. Tracking deadlines: The business notes the response date the letter demands, any stated filing deadlines, and, for patent letters, the date of first notice, which can matter for damages.
3. Gathering facts: The business identifies the accused product, service, name, or content; when it launched; how it was developed; and who was involved. This is usually done at counsel's direction to protect privilege.
4. Getting counsel's review: A lawyer experienced in intellectual property disputes evaluates the claim and manages any response. The next section describes what that evaluation covers.

Insurance is also worth checking early. Many commercial liability policies require prompt notice of a claim, and some IP-specific policies may respond to infringement demands. Coverage and notice obligations depend on the policy language.

Assessing the claim.

An evaluation usually addresses three questions:

• Does the sender own a valid right? Is the patent actually issued and in force, or just applied for? Is the trademark registered, and for what goods? Is the copyright registered? Many demand letters overstate the right: expired patents, abandoned applications, and unregistered marks asserted as though they were ironclad.
• Does the business actually infringe? For patents, this means comparing the patent's claims, not its title or abstract, against the product. For trademarks, it means likelihood of confusion, not mere similarity. For copyright, it means substantial similarity of protected expression. The letter presents the sender's view; an independent analysis may reach a different conclusion.
• Are there defenses? Invalidity (the patent should never have issued), prior use, fair use, license or authorization, laches or estoppel, and, for trade secrets, independent development or reverse engineering.

Response options.

Once the claim is assessed, the options range from negotiation, a request for clarification, a reasoned denial or litigation, depending on the facts. The right choice depends on the strength of the claim, the business stakes, and the cost of each path:

• Respond with a non-infringement or invalidity position. If the claim is weak, a well-reasoned response, ideally with a claim chart rebuttal or invalidity analysis, can end the matter.
• Negotiate a license or coexistence. If the claim has merit or fighting costs more than settling, a license, a trademark coexistence agreement, or a business resolution may be the rational outcome. Settlements of patent claims should address past damages, future royalties, and a release and covenant not to sue.
• Design around. Changing the product, name, or content to avoid the asserted right. Viable when the change is cheap and the right is narrow, but the redesign should have counsel's clearance before relaunching.
• Challenge the right. Inter partes review at the Patent Trial and Appeal Board, a trademark opposition or cancellation, or a challenge to a copyright registration can test the sender's right directly.
• Seek a declaratory judgment. If the sender will not clarify its intentions but the threat disrupts the business, the business may be able to sue first, asking a court to declare non-infringement or invalidity. Federal courts require an actual controversy; the Supreme Court's MedImmune test looks at all the circumstances.

A note on patent demand letters in Texas.

Texas has a specific statute aimed at bad-faith assertions of patent infringement. Since September 1, 2015, the Texas Business and Commerce Code has prohibited sending a written or electronic communication to an end user in Texas that makes a bad-faith claim of patent infringement, for example by falsely stating a lawsuit was filed, asserting rights the sender does not own, asserting a patent already held invalid, or omitting the sender's identity, the patent, and the accused product so as to materially mislead (Tex. Bus. & Com. Code §§ 17.951-17.953). Enforcement runs through the Texas attorney general, which can seek injunctions, civil penalties of up to $50,000 per violation, and restitution; the statute creates no private cause of action (§ 17.955). If a patent demand letter looks abusive, with vague accusations, no patent number identified, and demands for quick payment, counsel should evaluate whether the statute applies. The statute is aimed at bad-faith assertions, not at legitimate enforcement.

Common misunderstandings.

"If I ignore it, they will go away."

Sometimes, but a letter cannot be judged without evaluation, and the ones that do not go away get more expensive with time.

"They can't sue me; I'm too small."

Size is no defense to infringement. Some assertion entities prefer small targets precisely because they settle cheaply.

"We changed the product, so the problem is solved."

A redesign addresses future infringement. It does not erase liability for past conduct, and an undocumented redesign can complicate the defense.

"Our lawyer friend said the patent is obviously invalid."

Invalidity is a legal conclusion requiring prior-art analysis, not a hunch. Patents carry a presumption of validity; overcoming it takes evidence.

Sources.

• MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007): a patent licensee need not breach its license before seeking a declaratory judgment of invalidity or non-infringement. Opinion text (retrieved September 30, 2026).
• Tex. Bus. & Com. Code §§ 17.951-17.955: bad-faith claims of patent infringement; enforcement by the attorney general; no private cause of action. Enrolled S.B. 1457 (84th Leg., 2015) (retrieved September 30, 2026).
• 35 U.S.C. § 271(a): direct infringement: making, using, offering to sell, or selling a patented invention without authority. uscode.house.gov (retrieved September 30, 2026).
• 15 U.S.C. § 1114: trademark infringement turns on likelihood of confusion, mistake, or deception. uscode.house.gov (retrieved September 30, 2026).

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This guide is general information, not legal advice. Law checked through September 30, 2026. See the Disclaimer.