You open your mail and see an official-looking letter from a law firm. The subject line mentions “demand letter,” “notice of prior rights” or “cease and desist,” and your heart starts racing. What exactly did you receive, and what should you do about it?

Take a deep breath. A demand letter isn’t a lawsuit, and it doesn’t mean you’re automatically in legal trouble. But it does require your attention.

What Is a Demand Letter?

A demand letter is a formal complaint. Someone believes you’ve violated their rights (e.g. trademark infringement, copyright violation, breach of contract, or another legal issue) and they’re asking you to stop.

Think of it as the legal equivalent of a neighbor asking you to turn down your music, except it’s a formal document that typically includes:

• A description of what they claim you’re doing wrong
• Their legal basis for the complaint
• What they want you to do (usually stop the behavior)
• A deadline for your response
• Often, a threat of legal action if you don’t comply

Why Do People Send Demand Letters?

Demand letters make sense from the sender’s perspective. They’re cheaper than filing a lawsuit, faster than going to court, and often surprisingly effective. Many disputes get resolved at this stage without ever reaching litigation.

For intellectual property issues specifically, sending a demand letter can strengthen their legal position later. Courts prefer that parties try to resolve disputes before resorting to lawsuits. If you receive a demand and continue to infringe, it can be seen as willful and result in higher damages.

There is no requirement that a demand letter be sent; an accuser can always go straight to court.

Don’t Panic, But Don’t Ignore It

Here’s what not to do: ignore the letter and hope it disappears. Even if you think the claims are baseless, ignoring demand letters rarely makes problems go away; it usually makes them worse.

But don’t assume everything in the letter is accurate either. Demand letters are written from one party’s perspective, and that perspective might be incomplete or exaggerated.

Your Response Options

You generally have several choices:

Comply: If the claims seem valid and the requested action is reasonable, you might do what they’re asking.

Negotiate: Maybe their basic point is valid, but their demands go too far. You might work out a compromise.

Push back: If you believe their claims are wrong, explain why in a response letter.

Seek legal advice: I have seen too many times where clients respond on their own, and it might be that they admit something they should not have, or they believed what the other side said in the demand when it was baseless. So it is always a good idea to consult an attorney before responding.

The IP Context

In intellectual property law, demand letters are particularly common. Someone might claim your business name is too similar to their trademark, or that you’re using their copyrighted content without permission.

These letters often sound more threatening than necessary, filled with legal terminology designed to scare you into immediate compliance. Remember: the sender might not have a strong case. They could be overreaching or simply trying to intimidate you.

Timing Matters

Most demand letters include response deadlines, usually 10 to 30 days. While these aren’t always legally binding, ignoring them sends the wrong message and might prompt escalation to actual litigation.

If you need more time, you can often request an extension. A brief acknowledgment asking for additional time is usually better than silence.

When to Call an Attorney

In my opinion, you should always contact an attorney when a demand is received, even if you believe it is baseless. IP law is complex, and you might think the accuser has no case when they do, and vice versa. Seeking a professional to assist, even if for just an initial consult, can be worth the time and expense in the long run and help you avoid digging a bigger hole. 

The Bottom Line

A demand letter isn’t the end of the world, but it requires a thoughtful response rather than an emotional reaction. Most can be resolved without litigation if handled properly.

Received a demand letter and need guidance? We help businesses navigate these situations daily. Call us at (888) 666-0062 or click here to schedule your initial Discovery and Strategy Session online. Let’s review your situation and develop the right response strategy.

DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.