Responding to a Trademark Demand Letter
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A demand letter asks you to pay, rebrand, or both, and threatens a lawsuit if you do not. The figure in the letter is the sender's opening position, not a court's judgment. Before you answer, test the number against what the law actually allows, check your insurance, and preserve your records.
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The first two days after a demand arrives
A trademark demand letter asks for money, a change of name or packaging, or both, and usually threatens a lawsuit if you do not agree by a date. Some demands are well founded. Others overstate the claim, ask for a figure no court would award, or target a business with a strong defense. You cannot tell which from the tone of the letter.
What you do in the first days shapes your options. A hasty reply can admit facts, waive arguments, or show the sender you will pay to make the problem go away. Silence can lead to a lawsuit you might have avoided. Deleting listings or messages can create a second problem worse than the first. The sound approach is to slow down, preserve, notify, and get advice before anyone answers.
If the letter is in English and your business operates in Spanish, we can review it and discuss it with you in Spanish. We work with Portuguese, French, German, and Italian documents through qualified translators.
Do, and do not
- Do record the response date and the sender's lawyer, if any
- Do keep the letter, envelope, and email with its original date
- Do notify your insurer or broker promptly
- Do not call the sender to explain or apologize
- Do not pay, sign, or promise anything yet
- Do not delete listings, posts, chats, or sales records
- Find the deadline. Calendar it, and the date seven days before it. A deadline in a letter is not a court deadline, but missing it can trigger a lawsuit.
- Confirm the claim is real. Check that the sender exists, that the registrations cited are live on the USPTO database, and that payment instructions are not a scam.
- Preserve everything. Turn off auto-delete on email and chat apps, including WhatsApp, and keep listings, ads, invoices, and supplier records as they are. See Preservation Notices.
- Tell your insurer or broker. Send the letter with a short cover note. Late notice can cost you coverage.
- Gather your history. When you chose the name, any searches you ran, your first sales, and any registrations you hold, in the United States or abroad.
- Send it to counsel. Upload the letter and the deadline. Let us decide whether and how to respond.
Measure the dollar figure against what a court could award
Demand figures often add up every remedy the Lanham Act mentions. In practice, each remedy has conditions, and several apply only to counterfeits or to exceptional cases. This table is the starting point for testing the number.
| Remedy claimed | Source | What it requires | Questions that move the number |
|---|---|---|---|
| Your profits | § 1117(a) | Sender proves your sales; you prove your costs and deductions. Subject to principles of equity; the court may adjust an award that is excessive. | Which sales used the mark? What costs can you document? Intent is a highly important consideration (Romag Fasteners v. Fossil, 2020). Only the named defendant's profits count, not separate affiliates' (Dewberry Group v. Dewberry Engineers, 2025). |
| Sender's damages | § 1117(a) | Proof of actual loss, such as diverted sales or harm to reputation. A court may enhance up to three times, as compensation and not a penalty. | Is there any evidence of lost sales or actual confusion? Do the parties even sell to the same customers? |
| Statutory damages | § 1117(c) | Counterfeits only. $1,000 to $200,000 per counterfeit mark per type of goods or services; up to $2,000,000 if willful. | Is the mark actually a counterfeit, meaning identical with or substantially indistinguishable from a registered mark, on goods it is registered for and in use? A merely similar name is not a counterfeit (§§ 1116(d)(1)(B), 1127). |
| Treble profits or damages | § 1117(b) | Intentional use of a mark known to be counterfeit, unless extenuating circumstances | Did you know the goods were fake? Sellers who sourced fakes unknowingly have arguments here. |
| Attorney's fees | § 1117(a) | Only in exceptional cases. The Eleventh Circuit applies the Octane Fitness standard: a case that stands out for the substantive strength of a party's position or the unreasonable way it was litigated (Tobinick v. Novella, 2018). | Fees are not automatic, and they can run to a prevailing defendant too. |
| Any money at all | § 1111 | If the sender's goods were not marked with ® or equivalent, no profits or damages unless you had actual notice of the registration | When did you first learn of the registration? The letter itself may be the first notice. |
| Florida FDUTPA claim | § 501.2105 | Actual damages, and discretionary attorney's fees to the prevailing party | A FDUTPA count can expose the sender to your fees if you prevail. |
Your defenses lower the expected value
Prior use, no likelihood of confusion, a weak or descriptive mark, fair use, or invalidity all reduce the chance the sender recovers anything. See Trademark Infringement Defense.
Liability firstSo does your cost of defending
A rational settlement weighs the cost of litigating through discovery and trial. That cost is real for both sides, and it is often the sender's main leverage.
Practical exposureThe rebrand can cost more than the check
Packaging, inventory, signage, domains, and lost goodwill can exceed the payment demanded. Price the non-monetary terms before you compare offers.
Total costFor a written valuation of exposure, see Damages Evaluations. For a reasoned view on whether your use infringes, see Infringement Opinions.
Check your insurance before you answer
Many businesses carry a commercial general liability (CGL) policy. Standard CGL forms include a second coverage part, usually called Coverage B, for "personal and advertising injury." Among the listed offenses, policies commonly include the use of another's advertising idea in your advertisement and infringing another's copyright, trade dress, or slogan in your advertisement.
The same forms usually exclude injury arising out of infringement of copyright, patent, trademark, trade secret, or other intellectual property rights, with an exception for infringement, in your advertisement, of copyright, trade dress, or slogan. So a pure trademark claim is often excluded, while a claim that also alleges trade dress or slogan infringement in your advertising may fall within coverage. "Advertisement" is a defined term; standard definitions include notices published to the public or specific market segments, including material placed on the internet.
Results depend on the exact policy wording and the allegations. In one Southern District of Florida decision, E.S.Y., Inc. v. Scottsdale Insurance Co. (2015), the court found a duty to defend Lanham Act and Florida claims over garment hang tags, treating the tags as advertisements, and held that a knowing-violation exclusion did not apply because the claims did not require intent. Other policies, facts, and courts lead to the opposite result.
Give notice promptly. Under Florida law, late notice creates a rebuttable presumption that the insurer was prejudiced (Bankers Insurance Co. v. Macias, Fla. 1985). The Eleventh Circuit has also held that an insured had to give fresh notice when a dismissed suit was refiled in a new court (Anova Foods, 2018). A demand letter may not yet be a "suit" that triggers a duty to defend, but many policies require notice of an offense or claim that may lead to one.
What to send your insurer or broker
- The demand letter and every attachment
- Every policy that might respond: CGL, media liability, cyber, and any IP or umbrella policy
- A short, factual cover note, without admissions
- A request for written confirmation of receipt and the claim number
Questions we ask about coverage
- Does the claim allege trade dress, slogan, or advertising-idea misuse?
- Did the alleged use appear in your advertising, website, or packaging?
- Which exclusions apply: IP, knowing violation, prior publication?
- Will the insurer consent to settlement, or to your choice of counsel?
Five ways to answer a demand
Most responses combine more than one of these. The choice depends on the strength of the claim, the value of the name to your business, and the cost of a fight.
Comply, or negotiate
- Comply on your termsStrong claim
Agree to stop, but negotiate the time, the sell-off, and a release, and resist payment where exposure is low.
- CounterofferMost common
A lower figure, a longer phase-out, or coexistence, supported by your exposure analysis.
Push back
- Reasoned rejectionWeak claim
A letter setting out prior use, no likelihood of confusion, invalidity, or the limits on remedies.
- Request documentsTest the figure
Ask for the registrations, evidence of confusion, and the basis for the number.
File first, or go on offense
- Declaratory judgmentChoose the forum
A specific threat can let you ask a court in Florida to declare you do not infringe (MedImmune v. Genentech, 2007).
- Cancellation or counterclaimIf the mark is weak
Challenge the sender's registration at the TTAB or in court.
A decision guide
If the goods bear a copy of a registered mark on the same goods, the exposure is different in kind. Stop sales, preserve sourcing records, and get advice before anything else. See Counterfeiting Claims.
If you used the name first in your area, or hold an earlier registration, you may have a defense, or even a claim of your own.
Different goods, customers, and presentation can defeat the claim. Actual confusion evidence pushes the other way.
A young brand may rebrand cheaply. An established one may be worth defending, or worth a coexistence agreement.
If not, a reasoned counter that explains the limits often moves the number. If it is, negotiate terms and timing.
If being sued far from Florida would be costly, consider whether filing first here is justified.
Settlement and coexistence agreements: the terms that matter
A settlement is only as good as its wording. These are the terms we review in every draft, from either side of the table.
| Term | What it covers | What to watch for |
|---|---|---|
| Release | Claims the sender gives up | Should cover past and phase-out use, all your affiliates, distributors, and customers, and claims under federal and state law |
| Payment | Amount, schedule, and tax treatment | Installments, no default triggers you cannot meet, and no admission of liability |
| Phase-out and sell-off | When use ends, and what stock may be sold | Realistic dates for packaging, signage, listings, domains, and handles; sell-off by quantity, not just date |
| Coexistence | Where both marks may continue | Clear limits by goods, territory, channel, colors, and logos; a cooperation clause if confusion arises; who may register what |
| Consent to register | Agreement not to oppose each other's filings | Specific marks and classes; useful when either side files at the USPTO |
| No-challenge | Promise not to attack the sender's registrations | Scope and duration; avoid giving up defenses you may need later |
| Confidentiality | Whether terms may be disclosed | Carve-outs for insurers, auditors, buyers, and marketplaces |
| Breach and cure | What happens if a term is missed | Notice and a cure period before any agreed sum or injunction applies |
| Territory | Which countries the agreement covers | For Latin American and European businesses, whether it reaches home-market registrations and online sales into the United States |
| Law and forum | Governing law and where disputes go | Florida law and a Florida forum are usually better for a Florida business |
Settlement discussions about a disputed claim are generally inadmissible to prove liability or the value of the claim under Federal Rule of Evidence 408 and Fla. Stat. § 90.408. They are not confidential unless the parties agree.
Demand letters to Latin American and European businesses
Exporters, marketplace sellers, and franchisors from Mexico, Colombia, Brazil, Spain, Italy, and elsewhere often receive U.S. demand letters once their products reach American customers. A U.S. registration can conflict with a name you have used lawfully at home for years. Your home-country registration does not by itself give you rights in the United States.
A U.S. court may or may not have jurisdiction over a business abroad. That depends on its sales and activities here. Even where jurisdiction is doubtful, a demand can lead to marketplace takedowns, Customs detentions of recorded marks, or a default judgment that affects U.S. accounts and distributors.
Points we cover for foreign recipients
- Whether your U.S. sales support jurisdiction, and where
- Your own U.S. filing or Madrid designation, and priority claims
- Settlement terms that do not give up home-market rights
- Coordination with your counsel at home
How we respond to a demand letter
Robert H. Thornburg and Susan J. Latham handle Lanham Act and false advertising defense; James R. Leahy handles e-commerce and marketplace disputes; Melissa Dangond Crews handles TTAB challenges and works with Spanish-speaking clients.
- Day 1IntakeConflict check, deadline, and preservation instructions.
- Days 1–3InsuranceNotice to carriers, and a coverage read of the policies.
- Days 2–7Claim reviewSender's registrations, priority, and the evidence offered.
- Days 3–10ExposureRemedy-by-remedy range, and your cost to rebrand.
- Before deadlineStrategyComply, counter, reject, or file first.
- Before deadlineResponseA letter, or a request for more time.
- AfterAgreement or defenseSettlement drafting, or litigation defense.
Timing depends on the deadline in the letter and on when we receive your documents. If the deadline is close, we can ask the sender for more time.
Five common mistakes in responding to a demand letter
Recipients make most of their costly mistakes in the first week, before they have advice.
Calling the sender to explain
Owners call to say they did not mean any harm or did not know about the mark. The call becomes evidence of knowledge, and sometimes an admission.
AdmissionsLet counsel handle all contact, framed as settlement communications where appropriate.
Treating the figure as the exposure
Recipients pay a statutory-damages figure for a claim that involves no counterfeit at all, or ignore fees that apply only in exceptional cases.
§ 1117(a)–(c)Test each component against the statute before you answer.
Not telling the insurer
Owners assume trademark claims are never covered, or wait until a suit is filed. Late notice can forfeit coverage that existed.
NoticeNotify every potentially responsive policy at once and let the carrier decide.
Deleting the evidence
Taking down listings and clearing chat histories looks like concealment and can bring sanctions later.
FRCP 37(e)You can stop using a mark; preserve the record of how you used it.
Signing a narrow settlement
A release that covers only the company, not its owners, distributors, or customers, or a coexistence clause that is vague, leaves the dispute open.
Agreement termsRead the release and the territory clauses as closely as the payment.
Frequently asked questions
Do I have to respond by the deadline in the letter?
A deadline in a letter is set by the sender, not a court. But missing it can lead to a lawsuit, and a lawsuit has deadlines that do bind you. If you need more time, we can ask for it.
Can they really get the amount in the letter?
Sometimes, but often not. Many figures assume statutory damages, which apply only to counterfeits, or attorney's fees, which require an exceptional case. We test each part of the figure against 15 U.S.C. § 1117.
Will my insurance cover a trademark claim?
Possibly. Standard CGL policies exclude most trademark infringement but may cover infringement of trade dress or slogan in your advertisement, and the answer depends on the exact wording and allegations. Notify your insurer promptly either way.
Is anything I say in settlement talks protected?
Offers and statements made to compromise a disputed claim are generally inadmissible to prove liability or the value of the claim under Federal Rule of Evidence 408 and Fla. Stat. § 90.408, with exceptions. They are not confidential, and facts that exist independently are not protected.
Should I stop using the name right away?
Not necessarily. Stopping immediately can be costly and is not always required. If the goods may be counterfeit, stop sales of those goods and preserve records. Otherwise, decide after assessing the claim.
Can I sue them first?
Where the letter creates a real and immediate controversy, you may be able to file for a declaratory judgment of non-infringement, including in Florida. It is a strategic step with costs, so it should follow an assessment of the claim.
The letter came from a company in another country. Does U.S. law apply?
If the claim is about your use in the United States, U.S. law applies to that use. A foreign sender with a U.S. registration can sue here. Its home-country rights do not reach U.S. use on their own.
What if I bought the goods from a supplier and did not know they were fake?
Knowledge matters for treble and willful remedies, and your supplier may owe you indemnity. Keep invoices and communications with the supplier, and do not return or destroy the stock without advice.
Upload the letter and any deadline
Send us the letter, any attachments, the deadline, and your insurance policies if you have them. Tell us when you started using the name and where you sell.
- Review of the claim and a realistic exposure range
- Notice to insurers and a coverage read
- Responses, counteroffers, and coexistence agreements
- Declaratory judgment and litigation defense
Prefer to talk first? Call or email, or message us on WhatsApp. Atendemos en español.
- 15 U.S.C. § 1117, Recovery for violation of rights (GovInfo, 2024 ed.)
- 15 U.S.C. § 1111, Notice of registration (Cornell LII)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014)
- Tobinick v. Novella, 884 F.3d 1110 (11th Cir. 2018), summary (Tushnet)
- Romag Fasteners, Inc. v. Fossil, Inc., No. 18-1233 (U.S. Apr. 23, 2020)
- Dewberry Group, Inc. v. Dewberry Engineers Inc. (U.S. Feb. 26, 2025), Gibson Dunn summary
- Advertising injury coverage and the IP exclusion, Gen Re (2017)
- E.S.Y., Inc. v. Scottsdale Ins. Co. (S.D. Fla. 2015), Hunton Andrews Kurth summary
- Eleventh Circuit decision highlights importance of giving notice to insurers, Hunton Insurance Recovery Blog (2018)
- Failure to give timely notice: the role of prejudice in Florida (Bankers Ins. Co. v. Macias)
- Fla. Stat. § 501.2105, Attorney's fees (Florida Senate)
- An overview of legal remedies against trafficking in goods bearing counterfeit trademarks (Kilpatrick Townsend), on 15 U.S.C. §§ 1116(d), 1127
General information, not legal advice for your situation. Statutes, rules, and fees as of October 2026. Last reviewed October 28, 2026.