Choosing a business name may be more complicated than you think. If you accidentally select a name that’s too similar to another company, the company can sue you for trademark infringement. Trademarks aren’t just limited to a business’s name. A business can also trademark:
Trademark infringement is when a business uses the name, logo, or domain name of another business without authorization, or uses one that is similar enough to potentially confuse consumers.
In a trademark infringement case, the court will typically first compare the two trademarks for similarities. They will also examine which trademark was established first and whether the two companies sell similar goods or services. Even if your business isn’t directly competing with the other, the original trademark holder can make a reasonable argument that the goods or services may be related in the mind of consumer. When that happens, you could be found guilty of trademark infringement.
Trademark infringement occurs when someone uses a trademark that is identical or confusingly similar to a registered trademark without permission, potentially leading to customer confusion. There are several types of trademark infringement that businesses should be aware of:
This happens when another party uses a trademarked name, logo, or slogan without authorization in a way that directly competes with or mimics the registered trademark. It often causes consumer confusion about the source of goods or services.
Contributory infringement involves indirectly enabling or facilitating trademark infringement. For example, a company may provide tools, services, or platforms that knowingly assist others in violating trademark rights.
Counterfeiting is the production or sale of fake products that bear an exact copy or nearly identical version of a registered trademark. This type of infringement is particularly common in luxury goods and poses a significant risk to brand reputation.
Dilution occurs when a well-known trademark is used in a way that weakens its distinctiveness or tarnishes its reputation. Even if there is no direct competition, unauthorized use can damage the value of a brand by associating it with unrelated or lower-quality products.
Cybersquatting happens when someone registers a domain name that is similar or identical to a trademark with the intent to profit from the brand’s reputation. This often involves attempting to sell the domain back to the trademark owner for a profit.
While parody and satire are often protected under free speech, misuse can still lead to infringement claims if the use damages the reputation of the trademarked brand or creates confusion among consumers.
When businesses use trademarks in advertising to compare their products or services to competitors, misuse occurs if the comparison misrepresents or creates false impressions about the trademarked brand.
Each type of infringement poses different risks, and understanding them is important for protecting intellectual property rights.
For example, let’s say you create a company called Ruff Mutt that makes dog treats. A few months later, you are sued for trademark infringement by a self-serve dog wash company named Ruff Mutts that has been in business for five years and has trademarked their name. Although you sell a product (dog treats) and they sell a service (dog washes), both have confusingly similar names. The original trademark holder can therefore make a solid case that your name infringes on their trademark and confuses their customers.
Unfortunately, ignorance of the other company isn’t a valid defense for a trademark violation. You would likely lose the case and be forced to change your business name, costing you time, money, and potentially some of your customers.
The “registered” part of a trademark means that it has been officially recognized and granted legal protection by the U.S. Patent and Trademark Office (USPTO). This provides exclusive rights to use the mark in connection with your goods or services, and it allows you to take legal action against anyone who tries to use it without permission. A registered trademark also offers additional benefits like nationwide protection and the ability to use the ® symbol, signifying its official status.
Here are five steps small business owners can follow to avoid a violation of trademark and a potential infringement lawsuit:
Before you settle on a name, logo, or domain name, make sure it is not already trademarked. You can start the process by checking with the S. Patent and Trademark Office. Check for the exact name you want to use, as well as similar names.
While you may think you’re in the clear if there is not an exact match, that’s not necessarily the case. Before continuing any further, consider hiring a trademark attorney. They have access to other databases, including state trademark records and common law marks. It will also likely cost you less to pay a professional to do a search than it is to defend an infringement that may result in a name change. You can also outsource this work to a trusted trademark search company.
If you are sued for trademark infringement, general liability insurance can help pay for your legal expenses, including:
Not only do you want to avoid infringing on another company’s trademark, but you should also consider protecting your own intellectual property. If you’ve established a logo, name, or domain name that is unique and memorable, take steps to protect it by trademarking it.
In case a dispute arises, timestamps and documentation can help support your case. If you can provide documents that prove exactly when you registered your trademark, it can help if you are sued by another, newer company. It can also come in handy if you need to go after another business for infringing on your trademark. By investing some time and money upfront to search for potential trademark conflicts, you could save time, money, and the hassle of rebranding your business.
Trademark infringement can lead to serious legal and financial consequences. Businesses found guilty of infringement might face court-ordered injunctions, requiring them to stop using the infringing mark immediately. They may also be required to pay damages, including lost profits, legal fees, and, in cases of willful infringement, punitive damages.
In some cases, counterfeit goods bearing the trademark can be seized and destroyed. Beyond financial penalties, infringement can harm a business’s reputation and lead to long-term legal battles. Addressing potential trademark issues early and consulting legal professionals can help businesses avoid these risks.
If your business is sued for trademark infringement, the first step is to consult an intellectual property attorney immediately. They can help evaluate the claim and develop a defense strategy. Review the validity of the trademark in question and assess whether your use could reasonably cause confusion. Gather evidence of prior use or differences between your branding and the plaintiff’s mark. You may also explore settlement options to avoid prolonged litigation, especially if changes to branding can resolve the dispute. If the case proceeds, your attorney will help you respond to the lawsuit properly and present a defense in court. Taking quick, informed action is key to minimizing potential damages.
You can determine if a trademark is in use by conducting a search through the U.S. Patent and Trademark Office (USPTO) database. It’s also a good idea to search business directories and domain registrations to ensure there are no conflicts.
A trademark attorney can conduct thorough searches and provide legal advice to ensure your chosen name, logo, or slogan doesn’t infringe on existing trademarks. They can also guide you through the trademark registration process.
If someone infringes on your trademark, you can enforce your rights by sending a cease and desist letter, filing a claim with the USPTO, or pursuing legal action to stop unauthorized use and seek damages.
Yes, two businesses can legally use the same name if they operate in different industries or geographic regions, where there is little to no likelihood of confusion between the two brands. However, this should be carefully evaluated to avoid potential conflicts.
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I liked it when you mentioned that doing research is a vital step before deciding to create a trademark for your business. It is very important to make sure that you do not accidentally copy other businesses' trademarks otherwise you could get sued. I would like to think if a company accidentally gets into this situation, they should hire a reliable attorney who can help out to solve the issue.