A number of legal alternatives are open to the IP holder in cases of infringement, whether it relates to trademarks, copyrights, patents, or designs. A cease and desist legal notice (hereinafter referred to as C&D) to the infringer, which among other things tend to point out the IP holder’s rights in case if it is violated and, on the basis of such, requires the infringing party to restrain from all infringing actions and never to perform such infringing actions again in future under notice of legal action in case of non-compliance, is more practical than filing a lawsuit against the infringer. Ignorance of the applicable legislation and of the IP holder’s rights in the allegedly infringing IP is one of the most frequently used defences by IP infringers in developing markets like India. With the aid of a C&D notice, such right holders can alert infringers in advance of their plans to enforce their rights, thereby giving them time to take preventive action or get ready for extra enforcement support.
PURPOSE AND ESSENTIALS OF C&D NOTICE
For legal reasons, sending such takedown notice is frequently the initial response to the right claims against the infringement. Moreover, the letters inform the receiver of the owner’s rights, that they are being violated, and the repercussions of disobeying the letter’s instructions. Additionally, if the dispute is not settled, sending such a letter establishes the fundamental cause of action in writing and is likely to become a part of the court record. Most significantly, if the e-commerce platform agrees to the letter’s demand or if the disagreement can be resolved by another arrangement, the letter might be successful in preventing the alleged infringement.
However, in terms of rule of pleadings, it is crucial to make sure that the substance of C&D notice fully addresses all pertinent topics. This suggests that the points raised when such notice was being written should be comprehensive enough to cover any further claims made through legal actions, if necessary. This would ultimately prohibit the opposing party from claiming that the initial cease and desist notice did not cover the claims stated in court.
A cease and desist notice consist of all of the following essential components:
- Details of all the parties including name and address.
- Details about the registered IP.
- Dates and examples of the activities that violate the law.
- Require the cessation of all infringing activities.
- Insist on the cessation of infringing activities.
- Extra legitimate moves that might be made.
- Response deadline.
ISSUES INVOLVED
1. Binding Nature- The e-commerce platforms are not bound by the C&D notice and either avoid responding initially or take action only after the court orders. Establishing the liability of the intermediaries is always a point of concern where there has been a lot of debate on the effect of Cease and Desist notice as well as interpreting the term “actual knowledge” mentioned u/r 3(1)(d) of Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
2. Sellers Liability- There is no specific law governing the takedown obligations on sellers in various digital platforms. Sellers do not enjoy the status of an intermediary and are liable for the products listed by them. Thus, a seller can be called upon to takedown an unlawful listing (whether under IP law or otherwise) through the means of such notices.
3. Stage of Sending Notice- If the seller is cautioned earlier, he may file a caveat seeking an ex parte order or even a counter suit for groundless threats in his own jurisdiction, Another major issue is that he may hide goods so that any court’s order in terms of seizure or recovery of goods if executed, will not result in positive recovery. Thus, the question appears at what stage this notice should be sent.
LEGALITY OF C&D NOTICE IN INDIA
In many countries, engaging the defendant in pre-litigious measures is required, and failure to do so may result in consequences including the plaintiff’s inability to recover damages. Particularly in India, cease and desist notice is the first step towards bringing the knowledge of the ecommerce platform about the infringement being done on its platform. Thus, it is always recommended to send a C&D notice before approaching the court’s door. In Midas Hygiene Industries Pvt. Ltd. and Anr. v. Sudhir Bhatia and Ors., 2004 (3) SCC 90, Supreme Court held that a C&D notice acts as a very important and useful tool to pronounce injunctions. Also, Rule 75 of the Copyright Rules, 2013 also deals with the contents of the “take down notice” that can be sent by the copyright owner to the infringer and thus advisable to exhaust the remedies before approaching the court.
In MySpace Inc. v. Super Cassettes Industries Ltd., (2011) 48 PTC 49 (Del), the Division Bench of the Delhi High Court passed an order regarding the parameters and thresholds of the digital platform liability with regard to copyright laws, holding that intermediaries must be given with “specific knowledge” and that merely having a basic awareness or sense that the content posted on these platforms may be infringing will not constitute knowledge and hold an intermediary liable. The court took into account the ruling in Shreya Singhal case and noted that in terms of copyright, receiving explicit knowledge of the infringing works from the content owner was sufficient for MySpace without requiring a court order.
Therefore, it is crucial to remember that a cease and desist notice is not a binding legal document. It is only a tactic for trying to find a resolution to an issue without taking legal action. Additionally, due to its simplicity and efficacy in dealing with problems, a strongly worded letter is typically the first choice for people or corporations.
MAJOR DRAWBACKS AND ADVANTAGES OF C&D NOTICE
Cease and desist letter act as a warning message to the infringers and if they don’t act as per the legal demand of the IP holder, litigation will be the next step. But such a notice also gives an indication to the infringer that it needs to be prepared against any future actions that an IP owner may take. Thus, the major drawback of this notice is that the infringer may to evade any future action by the authority in terms of seizure & recovery, dispose of or shift the infringing products to any other place. In the case of Bloomberg Finance LP v. Prafull Saklecha & Ors., IA No. 17968 of 2012 in CS (OS) No. 2963 of 2012, Delhi High Court observed that the manner used by the Defendant for obtaining the trademark registration after a cease and desist notice was issued to it lends prima facie merit to the contention of the Plaintiff. Further, the infringer after getting an indication of any legal action, may make the “first move” and file legal proceedings against the IP owner for threat. Hence, the IP owner need to very careful and vigilant while sending the C&D notice and may apply at an early stage for a restraining order as practised in countries like U.S.A against the infringer.
This letter also brings some added advantage where it could surprise the other party who may be innocently infringing. Though this notice is not legally binding but it helps courts understand definitively when other parties were made aware of the situation. Secondly, the other party may to avoid litigation, decide to settle the case amicably with the IP owner as seen in most of the matters in India and hence, could be a best resolution for all the interested parties. It leads to lower cost, fast resolution and less damage to anyone involved.
WHAT ARE THE INTERNATIONAL GOOD PRACTICES?
The non-compliance of C&D letter is usually done globally by most of the e-commerce platforms. Similar to India, C&D notice is not binding in U.S.A as well. Few platforms in U.S.A reach out to the sellers mentioned in C&D letter but do not prefer to put them out of business. These platforms try to ensure compliance by asking them to stop selling products in which other brands have intellectual property rights. For instance, Amazon in U.S.A after following such practices force sellers to stop selling counterfeit products by putting their income or account at risk. Sometimes as a result of such actions even the sellers try to enter into a licensing deal with the IP owner. The position in U.K is similar to that stated above.
As per Chinese e-commerce law u/a 42-46, IP holders who believe that their rights have been infringed may notify the operators of e-commerce platforms to take necessary measures such as deleting, blocking, disconnecting links, terminating transactions and services. The notice shall include preliminary evidence of infringement. After receiving the notice, the operator of the e-commerce platform shall take necessary measures in a timely manner and forward the notice to the seller. If the necessary measures are not taken in time, the platforms themselves will be jointly and severally liable with the seller.
CONCLUSION AND SUGGESTIONS
Issuing a cease and desist legal notice can be a straightforward, inexpensive, and speedy approach to combat infringement based on an examination of the type and scope of any incidence of IP infringement, and in any case, it undoubtedly serves as a beneficial prelude to prospective IP litigation. Sending C&D notice is therefore a crucial initial step for informing the platform about the infringing counterfeit goods. It is also important to remember that sending C&D notice does not ensure that the e-commerce platform or seller’s infringement-related activities will be resolved or stopped. Additionally, in majority of the time, the infringer simply chooses to disregard the notice and carry on with their illegal behaviour, forcing the IP holder to think about other legal options in order to properly preserve and enforce his intellectual property rights.
It is crucial for the owner of an intellectual property right to respond promptly and diligently by bringing legal action to enforce his rights. The IP right holder frequently disregards the baseless threat, which leads to ex parte rulings in favour of the infringer in lawsuits. If the IP proprietor is unable to properly pursue his rights against the infringer, it may not set an ideal precedent for other infringers in the future. The e-commerce websites shall also act in a timely manner after receiving such notices and as a first step should acknowledge the receipt of it in accordance with Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 and subsequent to takedowns, e-commerce platforms must intimate the seller that the listing has been taken down.
