Sending a letter before action can be a useful way to open up negotiations without going to the expense of starting legal proceedings.
Why begin with a Letter Before Action?
- In general, when a dispute arises, court proceedings (litigation) should be the last resort as they are expensive, time-consuming and may not achieve the commercial solution you are seeking.
- Sending a letter before action creates an opportunity for the party in the wrong to remedy their actions and cease infringement without need for you to take them to court.
- Even if litigation is inevitable, the court will expect you to have attempted to reach agreement before going to court. Otherwise, it can affect the way legal costs are awarded later on.
- A letter before action helps to show that the defendant had an opportunity to negotiate or settle the action out of court.
Risks when taking action yourself
- It is important to take action when you discover infringement. However, doing so without professional advice is very risky.
- For example, if someone else is using your patent, trademark or design you could be deemed to be making unjustified threats due to the way you object to the use of your IP
- If you are deemed to have made unjustified threats it can weaken your position, and make you liable to pay compensation to the other party.
- You should also be aware that sending a letter before action can have reputational effects. If the recipient chooses to post it online and it is widely circulated on social media.
Receiving Letters Before Action
If you receive a letter before action, it may contain an offer to not litigate if you agree to certain undertakings. Any undertakings you agree to in those circumstances would be contractually binding, so you should consider the proposals carefully.
These undertakings will usually have been drafted to suit the sender, so it pays to take professional legal advice on these matters.