October 23, 2026
Don't ignore it, don't reply in anger, and don't delete anything. A cease and desist letter is a demand, not a lawsuit, and most are resolved by letter, but a careless reply can become evidence and an ignored deadline can turn into a complaint. In the first 48 hours, preserve documents, calendar the deadline, notify your insurer, and work out what kind of claim it is and who sent it. Then choose a response, usually a reasoned denial, a proposed change such as a rebrand or a license, or a negotiation, and send it through a lawyer.
Key takeaways
Work through this list before anyone replies:
The deadline in the letter is the sender's choice, not a legal deadline. If you need more time, a short note from your lawyer asking for a reasonable extension is almost always granted and does not concede anything.
Trademark. The question is whether your name, logo or domain is likely to cause confusion with the sender's mark, considering how similar the marks are, how related the products are, how strong their mark is, and evidence of actual confusion. Priority matters: who used the mark first in commerce, and whether either side has a federal registration. A good clearance search before you launched is your best evidence of good faith. See Trademark Name Clearance and How Do Trademarks Work.
Copyright. The sender must own a valid copyright in the material, and you must have copied protected expression, not just an idea or a functional element. Fair use and licenses are the usual defenses. If the "letter" is a DMCA takedown sent to your host or an app store, the platform will remove the content first. You can file a counter-notice, made under penalty of perjury and consenting to federal court jurisdiction, and to keep its safe harbor the platform must restore the content 10 to 14 business days later unless the sender files suit. File one only if you're confident, because it invites that lawsuit. See Copyright Infringement.
Patent. Patent letters are often sent by entities that license patents rather than make products, and many go to dozens of companies at once. They have their own playbook; see Patent Demand Letter.
Trade secret or a former employer's agreement. A letter from a founder's or employee's prior employer alleging misuse of confidential information or breach of a non-compete or non-solicit is the most dangerous kind for a young company, because it can come with a request for an injunction. Confirm immediately that no one has brought the former employer's files, code or customer lists into the company. See Trade Secrets.
Defamation or false advertising. Truth is a defense to defamation, and opinion is generally protected. Comparative advertising claims are judged on whether your statements are literally false or misleading, so pull the substantiation for every claim the letter cites.
Breach of contract and payment demands. Read the contract's notice, cure, dispute resolution and limitation of liability clauses, which may set a process the sender must follow and cap what it can recover. See Drafting Strong Contracts.
Privacy. Demand letters under state wiretap and pixel tracking laws are now common and are often sent in volume. See Tracking Pixels and Cookie Banners.
Possibly, and you only find out if you give notice. A general liability policy's "personal and advertising injury" coverage can respond to some trademark, copyright and defamation claims arising from your advertising, though IP exclusions are common. A cyber policy usually covers privacy claims, and a D&O policy may cover claims against the company and its directors and officers. Policies require prompt notice of a claim, and some treat a demand letter as a claim, so notify every carrier that might respond even if you think coverage is unlikely. See Insurance and Accounting.
A letter from an established company's outside counsel, citing specific registrations and evidence, is usually a real dispute that the sender is prepared to litigate. A form letter from a firm that sends many of them, with a settlement demand just below the cost of a defense, is a business model, and the right response is often a firm, well-supported denial. A competitor's letter that arrives just before a big launch or fundraise may be a tactic. Search federal court records for the sender's past cases and see whether it actually sues.
There are four options. A reasoned denial explains, with facts, why the claim fails, such as earlier use, no likelihood of confusion, independent creation or a license. A proposed change, such as a rebrand on a reasonable timeline, removing content, changing ad copy or taking a license, often ends the matter cheaply when the claim has merit. Negotiation sits between the two: a coexistence agreement for trademarks or a release in exchange for agreed changes. Silence is rarely right, except with obvious volume senders, because it gives up the chance to shape the record.
A good response letter is short, factual and calm. It acknowledges the letter, states your position and the key facts that support it, proposes a path if you want one, and reserves your rights. Settlement proposals can be marked as made for compromise purposes, but don't rely on that label to protect everything you write. Never put admissions, guesses about what happened or internal disagreements in writing to the sender, and remember that your internal emails and Slack messages about the dispute are discoverable unless your lawyer is part of the conversation.
Westaway can evaluate the letter, advise on your options and send the first response or a demand letter of your own. If the dispute goes further, the company retains a litigator.
An aggressive reply, or your own threat to sue, can create the legal controversy a court needs to hear a declaratory judgment action. That lets the side that files first pick the court, often its home district, and frame the case. The same risk runs the other way: a startup that sends its own demand letter can find itself sued in the recipient's court. Escalate only when you're ready for that.
Most letter disputes resolve in weeks to a few months. A lawsuit that goes to trial commonly takes more than a year and costs far more than any rebrand or license, which is why the early letters matter.
Tell the board promptly, through or with counsel, so the discussion is privileged. A material claim belongs in your next investor update in general terms; share details with investors only on your lawyer's advice, because disclosing privileged analysis to third parties can waive privilege. Expect the letter to appear on the disclosure schedule in your next financing or acquisition, where the company represents that there are no threatened claims except those listed.
Example. A startup has sold its software for 18 months under the name Quillo. On 6 May it receives a letter from a larger company's lawyers citing a 2015 federal registration for QUILL for accounting software and demanding that the startup stop using the name within 14 days, by 20 May, and transfer its domain. The startup's lawyer asks for, and gets, a 30-day extension to 19 June. The founder notifies the company's general liability carrier. The analysis shows the marks are similar, both products are business software sold to finance teams, and the sender has nine years of priority, so the claim is credible. The startup proposes a coexistence agreement instead of a fight: it will phase out Quillo over 120 days, keep the domain as a redirect for 12 months, and receive a full release for past use, with no payment either way. The sender accepts, and the startup's rebrand costs a fraction of what defending a lawsuit would.
For more, see Trademark Name Clearance, Copyright Infringement, Patent Demand Letter and Insurance and Accounting.
If your startup has received a cease and desist letter and you haven't replied yet, contact us.
