Efficacy of Cease and Desist Letters in India

This post talks about how courts in India construe action or inaction upon receipt of a cease and desist letter by a potential defendant.

Ignoring a Cease & Desist Letter

Courts will almost always draw a negative inference in the event a defendant fails to respond to a cease and desist letter. Such a preliminary inference might assist a plaintiff in obtaining an interim injunction, including ex-parte injunction (an injunction that is granted without the other side being given an opportunity to be heard).

Receiving a Response to a Cease & Desist Letter

If a potential defendant responds to a cease and desist letter, it is to be expected that the response will be accompanied by denials regarding the allegations made in a cease and desist letter. However, such responses may contain important admissions such as a potential plaintiff’s senior rights. Nevertheless, such responses may aid the grant of interim injunctions as the only question the judge needs to answer before granting them is – whether the marks are deceptively similar or not. After all – admission is the best evidence.

The Mitigation of the “Delay Factor”

There is yet another aspect to the role played by cease and desist letters in the grant of injunctions – the mitigation of the “delay factor”. Delay could become an important factor in the court declining grant of an ex-parte injunction or an ad-interim injunctions. A cease and desist letter might help, however. Generally speaking, even if a plaintiff has filed its suit a few months after first becoming aware of the defendant, the prompt sending of a cease and desist letter could mitigate the effect of the delay by showing that the complainant is serious about its statutory and common law rights.

Tilting the Scales of Equity

Sending a cease and desist letter also helps tilting the scales of equity in favor of the plaintiff as it also shows that the complainant tried to settle the dispute amicably before opting for a litigation. In a country, known for the large number of pending law suits that have dragged on for a number of years, owing to the unfavorable ratio of the size of its population vis-à-vis the number of appointments in the judiciary, attempts to amicably settle the dispute help position the complainants as “injunction-worthy”.

Cease and Desist Letters as Instigators of Caveat Petitions

Cease and desist letters may propel the other side to file caveats in courts. Once a caveat is filed, a complainant cannot obtain ex-parte orders upon filing a suit, and the other side must be given an opportunity to be heard before the court passes any adverse orders against it. However, even if obtaining an ex-parte injunction is no longer an option, it is still possible to press for an ad-interim injunction aggressively on each hearing date. The benefits discussed above in respect of cease and desist letters would no doubt even extend to the grant of an ad-interim injunction. One situation, where one could consider dispensing with sending a cease and desist letter, is when an ex-parte injunction is urgently required.

Interestingly, Indian law witnessed a phase when cease and desist letters were not as useful as discussed above. In 2001, the Delhi High Court, ruled that sending a cease and desist letter would back-fire if the complainant does not file a law suit soon after, and not doing so showed that the complainant has willfully allowed the other side to continue the disputed activities.[1] Thankfully, the Supreme Court, in 2004, over-ruled that decision, holding that a mere delay in filing a suit does not disentitle the complainant to an injunction, and expunged the Delhi High Court’s take on cease and desist letters from the law.[2] Thereafter, once again, cease and desist letters were considered useful tools that aid in adjudicating the grant of injunctions. And since then, their importance in injunction jurisprudence, has only grown.

[1] Sudhir Bhatia and Ors. v. Midas Hygiene Industries P. Ltd. and Anr., Order dt. 20.09.2001 in FAO (OS) 347/2001.
[2] Midas Hygiene Industries P. Ltd. and Anr. v. Sudhir Bhatia and Ors., 2004 (3) SCC 90.