If you search on Google® for “demand letter +copyright”, most of your first pages of hits will be articles written by individuals who received cease and desist letters, or attorneys who want to represent them. These writers focus on how outrageous and upsetting it is to receive a demand letter, how the recipient does not necessarily have to pay the amount demanded, and that even if caught with your hand in the proverbial digital cookie jar, you can negotiate.
All these things are true. However, would you rather receive and be resentful over a demand letter, or a summons and complaint? Being sued first, and asked questions later, can be an expensive proposition, especially because a court can award a plaintiff’s attorneys’ fees. Maybe receiving a cease and desist isn’t such a terrible thing, when you consider the alternative.
Similarly, the copyright holder needs to decide whether to send a demand letter or commence a lawsuit, sometimes with a request for an injunction to immediately stop the infringing conduct. The demand letter obviously can save on fees, but only if the infringer is responsive and truthful in negotiating a resolution. A cease and desist demand can also show a court that the content provider tried to resolve the matter without burdening the infringer or the court, but that the defendant’s failure to take responsibility compelled the lawsuit – and such failure is additional proof that could sway a judge to award attorneys’ fees to the plaintiff.
On the other hand, a demand letter warns the infringer of the copyright owner’s plans, giving the would-be defendant the time and opportunity to hide or sell off the infringing goods. It’s a balancing act, and demands the exercise of careful business judgment: the amount of damages from past and continued infringing conduct, the chance to determine the source of infringing goods, and the cost of enforcing your rights.