For lawyers, litigation is our bread and butter. For almost any business executive, however, a lawsuit is a costly, time-consuming and frustrating distraction. It is hardly surprising that litigation has been compared to trench warfare, with each side digging in and lobbing legal documents at each other for months or years, while the billable hours steadily rise.
But it doesn’t always have to be that way.
One of my clients manufactures beautiful household items and tableware. Designed and executed with artistry, the line is showcased by many high-end department stores.
For purposes of this blog post, let’s call the client “Décor Co.”
Everything was going along nicely until Décor received a “demand letter” from a large East Coast law firm. According to the letter, , the design of one of my client’s items was too similar to the look of a product produced by a large European manufacturer, infringing on its trademark.
The letter demanded that Décor immediately stop making the supposedly infringing product. Moreover, it insisted on a full accounting of all sales ever made of this product, and the surrender to the European company of all profits related to those sales.
Needless to say, my client was upset. Décor’s products were its own creations, not knockoffs of other designs.
Accepting the letter’s accusatory and burdensome demands would force Décor to drop a popular item from its line, force it to pay unwarranted “damages” to the European company, and – perhaps the biggest cost – damage its reputation for the originality of its designs and the integrity of its business practices.
Yet its only alternative seemed to be engaging in expensive litigation against a much larger competitor, at great cost and with no certainty of success.
Having worked on trademark, copyright and other intellectual property issues for more than three decades, I did not find the letter from the East Coast law firm persuasive.
Behind the stern language and peremptory demands was the core of their claim: the item made by Décor and the household product made by the European company had a similar shape and scalloped edges.
The two designs had some similarities, but the shape with scalloped edges could be found on countless other houseware items, including some made long before either company was founded.
After briefing Décor Co. executives, I wrote a polite but firm response to the European company’s attorney, denying that my client’s design infringed the competitor’s trademark. The identical design the companies used was hardly unique; as an example, I pointed out several identical houseware items that were made in the 17th Century.
I followed up with a friendly phone call, to be sure the other attorney understood our position. “You may hear back from us,” he said – “may,” I noted, not “will.”
That was over a year ago, and we have not heard a word from them since then.
The lesson here is that a dispute is no reason to panic, even when the other side is sending nasty letters and making scary-sounding threats. Sometimes all it takes to resolve the issue is one letter.
Stephen F. Moeller