As to the response, the target will have to consider whether or not there is any defense. If there is not, the obvious choice is for the target to cease using the mark in question. If there is a defense, the target has to consider the relative merits of the target's case versus the relative merits of the case on the other side. Next, and assuming that the target intends to resist as opposed to immediate capitulation, consideration must be given to the relative size of the parties and whether or not the threatener is willing and able to carry out the threat.

In our particular case, Small (the target) could very well refuse capitulation for a number of reasons, including but not limited to joint use of the mark by the parties for an extended period of time. Assuming capitulation is ruled out, Small could quite reasonably consider as a negative the awkward timing of the threat. Specifically, Cpaatty was away from the office for an extended period of time and would face logistical problems for that reason. Secondly, Small could quite reasonably assume that the other side was willing and able to carry out the threat. Third, Small would be at a disadvantage if Big instituted the action in some distant federal court and Small and Cpaatty would have to hire outside counsel in that distant location to defend.

There is still room to consider discussion and compromise and perhaps Small could have pressed more vigorously to see if some kind of settlement could be reached, short of litigation. From Small's standpoint, the risk of this approach is that, given the considerations set forth in the preceding paragraph, Big could at anytime terminate the settlement negotiations and take advantage of Cpaatty's absence and the economic burden of defense in a distant location.

It is ordinarily safe to assume that you can discuss settlement with the opposite side without undue concern that such discussion (as opposed to immediate capitulation) will lead to immediate litigation. While it is true that the Bigs of this world have an advantage, economically, it is also true that even the Bigs have enough to fear about what can happen in courts (as well as what it will cost them to go there) that they may be willing to talk a bit about something other than immediate capitulation.