Litigation is a fact of life in business. If you're in business for any number of years, there's a good chance you may be sued or think its a good idea to sue someone else. Honest disputes can arise even in the face of the best of intentions, and sometimes the only way to resolve disputes is in court.
Frequently Asked Questions
I received a Cease and Desist letter, am I being sued?
Probably not … at least not yet. Cease and desist letters, warnings that you may be sued, are very common in business, and may be sent even when the other side has no intention of suing you.
There is often no way to know, although depending on your opponent's track record and resources, you may be able to decide how likely it is you will actually sued.
Do I need to respond?
There is no legal obligation to respond to a cease and desist letter, but you should carefully evaluate the merits of the other party's claims.
If the the other party's claims are weak or frivolous, you may be able to safely ignore the letter, although a carefully worded response is usually advisable.
An appropriate response, ideally from an attorney, lets your opponent know that you understand the issues involved and are ready to put up a fight. This is essentially upping the ante, and your opponent will need to spend time and money to respond and to take the matter to court.
I've been served with a complaint filed in a state or federal court, do I need to respond?
Yes, in most cases, and the consequences of failing to respond could be dire. The court could give your opponent a default judgment holding you liable for damages.
In the rare case where you or your company is insolvent and headed into bankruptcy, lawsuits can be ignored.
How much will fighting a lawsuit cost?
That depends on how far into the process the suit is carried. A suit that is quickly settled might only incur a few thousand dollars in legal fees. Going all the way to trial could easily well into six figures.
Someone is infringing my intellectual property, should I file a lawsuit?
The decision to file a lawsuit should generally be a business decision based on a cost-benefit analysis. You need to estimate the value of the intellectual property at stake. If the value of the intellectual property exceeds, or at least equals, the expected cost of litigation, filing a lawsuit may be a good idea, at least if you can bear the cost.