Cease-and-desist letters are more common practice in emerging and competitive industries, and they are always distressing. If you are a tech company, you might receive one (or a few) from a software vendor’s legal team alleging that you’ve violated their license agreement, exceeded your permitted usage, or misused their platform in a way that exposes your business to significant legal liability.
Before getting to what you should do, it’s worth being direct about the mistakes that make these situations significantly worse.
Don’t contact the vendor. Anything you say to the vendor can be used against you later. You haven’t had time to understand the full picture. A conversation that feels like it’s going well can produce admissions that complicate your position enormously.
Don’t ignore the letter. A cease-and-desist letter isn’t a lawsuit, but ignoring it doesn’t make it go away. It tells the vendor you’re not taking their claim seriously, which often accelerates their decision to escalate. Vendors send these letters because they want a response.
The first thing you should do upon receiving the letter is read it. Yes, it’s that simple. Read the letter carefully and understand exactly what they’re claiming. This sounds obvious but people often skim cease and desist letters because such letters are alarming and they want you to not read them carefully.
At this point, you should contact an attorney who understands technology vendor disputes. At Saltzman Law, we can evaluate the merits of the vendor’s claim, identify your defenses, and craft a response that protects your position whether this resolves quickly or eventually ends up in litigation.
It is crucial that you instruct your team in writing to preserve all records related to the allegations, including the original software agreement and any amendments, purchase confirmations, invoices, usage logs, internal emails, and any communications with the vendor. This will vary based on what the letter says, but the idea is that everything needs to be preserved.
Compare the allegations of the letter to the actual facts at hand. Are the allegations accurate? At Saltzman Law, we will be able to advise business owners exactly how to respond to the case-and-desist letter. Remember, the response to a cease-and-desist letter must be well-reasoned and establish your factual and legal position on the record. If your response is insufficient, you might concede facts you didn’t intend to concede, waive defenses you didn’t realize you had, or escalate a situation that could have been resolved quietly.
Once you have the facts organized, the question becomes how seriously to take the threat. Not every cease-and-desist letter reflects a strong legal position. Vendors sometimes send them as a first move in a negotiation rather than a genuine statement of legal certainty. Sometimes, these letters act as are mere posturing. It can sometimes be difficult to see the vendor’s intention.
After responding to the letter, you might want to consider tightening your agreements with other vendors as well. Resolving the immediate situation is the priority, but once it is resolved, it’s worth asking how likely it is that you could fall into the same situation again with another vendor.
At Saltzman Law, we can review your current agreements to lower the risk of your company running into this issue again.
If your Maryland business has received a cease-and-desist involving software licensing, terms of service, or technology vendor claims, the most useful next step is a conversation with a lawyer who understands how these disputes develop and resolve. The sooner you have that conversation, the more options you have. Jonathan Saltzman has particular expertise in protecting tech companies from predatory software companies that might target your business with cease-and-desist letters. Contact Saltzman Law for more information.
