Receiving a cease and desist letter is unsettling at the best of times, and the instinct for many small business owners is to hope the problem quietly goes away. It won't. A cease and desist letter is a formal warning that someone believes you're infringing their trademark rights, and ignoring it rarely makes the situation better — it almost always makes it worse.
Here's what actually happens when a cease and desist letter goes unanswered in Australia, and what you should do instead.
What Is a Trademark Cease and Desist Letter?
A cease and desist letter is typically sent by a trademark owner (or their lawyer) when they believe another business is using a name, logo, or slogan that infringes their registered rights. It usually sets out the trademark in question, explains the alleged infringement, and demands that you stop using the mark within a set timeframe — often accompanied by a request for damages, an account of profits, or a formal undertaking.
Why Business Owners Ignore Cease and Desist Letters
It's understandable. The letter can feel aggressive, the legal language is often intimidating, and many owners assume it's a scare tactic that won't be followed through on. Others simply don't have a rebrand budget and hope the issue resolves itself. Unfortunately, none of these reasons make the underlying legal risk disappear.
What Actually Happens If You Ignore It
Ignoring a cease and desist letter doesn't stop the clock — it usually starts the next stage of the dispute. Here's the escalation path that typically follows silence:
- Formal legal proceedings. The trademark owner can apply to the Federal Court or Federal Circuit Court for an injunction to stop you using the mark, along with damages or an account of your profits.
- Injunctions. A court can order you to stop using the name, logo, or packaging immediately — sometimes with very little notice, disrupting trading, marketing, and stock on hand.
- Financial exposure. Beyond your own legal costs, you may be liable for the trademark owner's legal fees, lost profits, or damages tied to the infringement.
- Marketplace and platform takedowns. If you sell through Amazon, eBay, Etsy, or social media, the rights holder can lodge a takedown notice, which can suspend your listings or account with little warning.
- Reputational fallout. Public disputes, forced rebrands, and sudden name changes can confuse customers and damage the trust you've built.
In short, the letter is usually the cheapest and least disruptive part of the process. Everything that follows tends to cost more — in money, time, and stress.
How These Disputes Usually Start
Most cease and desist disputes trace back to inadequate groundwork at the naming stage — a name that was too similar to an existing mark, or a business that assumed a registered business name or ABN gave them the right to trade under that name. If you're building or renaming a brand, it's worth understanding how business name registration differs from trademark rights before you commit to a name, and why weak or overly similar marks are more likely to attract objections and disputes down the line.
Your Options When You Receive a Letter
Ignoring the letter is rarely the right move, but that doesn't mean you have to simply comply either. Depending on the strength of your position, there are usually several paths forward:
1. Respond promptly, even if you disagree
A considered, timely response — even one that pushes back on the claims — signals that you're taking the matter seriously and buys you room to negotiate.
2. Negotiate a coexistence or consent agreement
In many cases, both businesses can continue operating if the scope of use is clearly defined. A properly drafted trademark agreement or consent letter can formalise this arrangement and prevent future disputes.
3. Explore a licensing arrangement
If the rights holder is open to it, a trademark licensing agreement can sometimes allow continued use of a similar mark under agreed conditions, rather than forcing a full rebrand.
4. Rebrand strategically
If your position is weak, a planned rebrand — done on your own terms and timeline — is almost always less costly than a court-ordered one.
A Note for E-Commerce Sellers
Online sellers face a particular risk: trademark disputes can trigger marketplace takedowns that halt sales overnight, often before you've had a chance to respond. If you sell through online platforms, it's worth reading our guide on why trademark registration matters for e-commerce businesses, since having your own registration in place strengthens your ability to push back on disputed claims.
Received a cease and desist letter?
Don't respond blind. Our IP specialists can assess the claim, your position, and the best way forward — before any deadline passes.
When to Get Professional Help
Trademark disputes involve legal nuance that isn't always obvious from the letter itself — including whether the claim is even valid, how strong your own rights are, and what a realistic settlement looks like. Getting advice early, before you respond or ignore the letter, gives you far more options than waiting until court action is already underway. You can learn more about our team on the About ApplyTrademark page.
Quick Checklist: What to Do When You Receive a Cease and Desist Letter
- Don't ignore it, and don't panic — read it carefully and note the response deadline
- Check whether the trademark referenced is actually registered and in what classes
- Gather evidence of your own use, including first-use dates
- Get professional advice before responding in writing
- Consider negotiation, coexistence, or licensing before assuming a rebrand is necessary
- Keep records of all correspondence in case the matter escalates
Frequently Asked Questions
Is a cease and desist letter legally binding in Australia?
No, the letter itself isn't a court order and doesn't force you to do anything immediately. However, ignoring it can lead to formal legal proceedings, which do carry binding, enforceable consequences.
How long do I have to respond to a cease and desist letter?
Deadlines vary, but letters commonly request a response within 7 to 14 days. Missing the deadline doesn't necessarily end your options, but it does increase the likelihood of escalation.
Can I keep using my business name while I respond?
This depends on the strength of the claim and your own rights. Continuing to use a disputed mark without advice can increase your exposure to damages, so it's best assessed on a case-by-case basis before deciding.
What if I think the cease and desist letter is unjustified?
You can dispute the claim, but this should be done through a considered, evidence-based response rather than silence. A weak or invalid claim is still worth responding to formally.
Will I definitely end up in court if I don't comply?
Not necessarily — many disputes are resolved through negotiation, coexistence agreements, or licensing before reaching court. But ignoring the letter altogether removes the chance to negotiate on your own terms.
Take the Letter Seriously — But Don't Panic
A cease and desist letter is a warning, not a verdict. How you respond in the days that follow will shape whether the dispute is resolved quietly or escalates into something far more costly. Getting experienced advice early gives you the best chance of protecting your brand, your budget, and your reputation.