How serious is a cease and desist letter and can't i just stop using their brand after receiving it?

This would be an extremely bad idea. This would clearly constitute trademark infringement and worst of all you are doing it for a commercial purpose. In addition, since you are not licensing the character, you would be depriving Disney of royalties rightfully due them.

Lastly, there is no way to be sure Disney would not go immediately to court rather than send you the warning you envision. If you are making money off their trademark, you can almost certainly expect litigation.

Disney has always been very protective of their inventions, brands and characters.

I agree with Mr. Garner that your proposed approach is not a wise one.

Good luck to you.

NOTE: This answer is made available by the lawyer for educational purposes only. By using or participating in this site you understand that there is no attorney client privilege between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed professional attorney that practices in the subject practice discipline and with whom you have an atttorney client relationship along with all the privileges that relationship provides. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question.

The C&D letter is simply the beginning. It is to inform you of the wrong you are doing and to warn you of further legal action. The fact you already know you are acting improperly will create "willful infringement" and that could really increase any damages you will be required to pay if you lose a lawsuit.

My advice is to approach Disney before using their property and ask if you can.

As the others have pointed out Disney is extremely protective of their intellectual property and would have no problem suing you. I hope you have a few tens of thousands of dollars that you have nothing better to do with then to spend on litigation that you cannot possibly win.

The following link from Disney:

https://licensing.disney.com/Home/display.jsp?contentId=dcp_home_help_help_become_licensee_en&forPrint=false&language=en&preview=false&imageShow=0&pressRoom=US&translationOf=null&region=0&ccPK=null

is a description of their licensing program for consumer products.

You'll want a lawyer to help you through this.

Non-legal advice that is applicable to a lot of folks in business: If someone else's character is going to give a big boost to your product, it is likely worth the investment in the licensing effort. If the investment in a license is too high for the expected return, the risk of litigation is likely higher than the boost you are likely to get.