The Art of the IP Infringement Demand Letter

The Declaratory Judgment Act

In the context of a dispute involving IP, the Declaratory Judgment Act (“DJA”) provides an accused infringer a means for obtaining a legal determination of its rights. The DJA provides that “[i]n a case of actual controversy within its jurisdiction ' any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C. ' 2201. Competitors are “no longer restricted to an in terrorem choice between the incurrence of a growing potential liability for [IP] infringement and abandonment of their enterprises; they [can] clear the air by suing for a judgment that would settle the conflict of interests.” Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 735 (Fed. Cir. 1988). Under the DJA, if the accused infringer is under a reasonable apprehension of a lawsuit, it is entitled to seek declaratory relief. The problem for the IP owner is that, in many cases, even a single demand letter asserting infringement of IP rights is sufficient to create a reasonable apprehension, thereby exposing the IP owner to a lawsuit in a potentially disadvantageous forum of the infringer's choosing.