On 16 Jan 1997, the US law firm, Sughrue, Mion, Zinn, Macpeak & Seas, sent the following letter to Prince Plc in England:
“re: Domain Name PRINCE.COM
Trademark Infringement and Dilution
We represent Prince Sports Group, Inc., with respect to trademark and other intellectual property matters. Prince is the owner of the famous PRINCE trademark, which has been used in connection with tennis rackets, squash rackets, other sporting items and clothing for at least the past 20 years in the United States. Prince is the owner of several US registration for the PRINCE mark, many of which are incontestable, e.g. Registration Nos. [8 numbers]. Our client has also registered the PRINCE mark in many other countries throughout the world, including the United Kingdom. Through extensive sales and advertising under the PRINCE mark and the excellent quality of our client’s products, the PRINCE mark has become an asset of immeasurable goodwill and value to our client.
It has come to our client’s attention that you have registered “PRINCE.COM” as a domain name with Network Solutions Inc, (NSI) thereby preventing our client from registering its house marks and trade name as a domain name. We are writing to advise you that your company’s use and registration of PRINCE as a domain name constitutes infringement and dilution of our client’s trademark rights in PRINCE, as well as unfair competition, under the Lanham ACT, 15 USC 1051 et. seq.
This matter can be amicably resolved by an assignment of the PRINCE.COM domain name to Prince Sports Group, Inc., in accordance with the procedures of NSI and an agreement not to use PRINCE as part of any new domain name you may select. While we are willing to wait for your orderly transition to a new domain name, we must have your immediate written agreement to assign the PRINCE.COM domain name to Prince Sports to avoid litigation.
We look forward to hearing from you or your attorney in the very near future.”
That letter landed their client in a heap of trouble for instead of meekly assigning the domain name to Prince Sports Group Inc., the English company responded with a claim for groundless threats under s.21 of the Trade Marks Act 1994. Upon the hearing of the English company’s application for summary judgment, Mr. Justice Neuberger granted Prince Plc a declaration that the threat of litigation was unjustifiable and an injunction against the continuance of the threat (see Prince Plc v Prince Sports Group Inc.  FSR 21).
Threats actions are not the only hazards of pre-action correspondence. If a party fails to provide sufficient information to enable the other party to understand the issues, withholds documents that have been requested without good cause or fails unreasonably to consider alternative dispute resolution that party risks financial or other penalties should such conduct give rise to litigation.
The Practice Direction – Pre-Action Conduct and the Code of Practice for Pre-Action Conduct in Intellectual Property Disputes set out a procedure for the exchange of information and documents in intellectual property cases. I have discussed this procedure and the contents of a letter before claim and a letter of response in a short article entitled “IP Dispute Resolution in England and Wales: why sending a US style ‘Cease and Desist Letter’ or old style ‘Letter before Action’ may not be a good idea” which may be downloaded from the JD Supra web site.
When I first came to the Bar it was rare for counsel to settle letters before action. Nowadays, advising on and settling letters before claim and response is probably my single, biggest source of work. I charge about £400 + VAT for settling a letter of claim or response though advising on the strength of a case is usually rather more. Should anyone want to discuss this topic, he or she can call me on 0800 862 0055 or complete my contact form.