How to Handle a Trademark Violation of Your Small Business

Just like parents picking the name of their children at birth, business owners agonize over the words and logos that will represent their business.

Every entrepreneur should make sure that his or her business name is legally available and then register it with the U.S. Patent and Trademark Office in order to protect it. But, even that protection doesn’t guarantee that another shop won’t open with the same name and confuse customers.

When a small business owner comes across a business with an eerily similar name or trademark it’s important to do your research and act fast.

“First, make sure that it is a real infringement and determine the scope of your trademark rights,” recommended Chappaqua, NY-based Attorney Kyle-Beth Hilfer.

For example, Hilfer said small business owners should figure out if they are “using the mark in interstate commerce with a registration that provides rights throughout the United States or using the mark in a limited geographic area, while the competing mark is in a completely different geographic region.”

If the business name or mark is being infringed upon, Los Angeles-based attorney Konrad Trope warned small business owners to “put the infringer on notice to “cease and desist” and collect evidence of first use and infringement.”

“First use” establishes that a business owner held the name first.  “First use in commerce is the key. Dated letters with letterhead, product sold with the mark, advertisements, all are examples of first use,” said Trope, “Make sure you can show the date that the advertisements were published or broadcast.“

Putting an entrepreneur on notice to stop using the name or logo is done through a cease and desist letter drafted by an attorney.

“A cease and desist letter puts the infringer on notice that the business owner is serious about intellectual property rights and will prosecute to the fullest extent of the law,” said Hilfer, “Frequently, these letters shake the infringer out of complacency, allowing negotiations to commence.”

But if negotiations don’t follow, the process gets serious and expensive. “What happens next depends on clients’ tolerance level for pain and spending money,” said Lewisville, Texas-based attorney Tamera Bennett. “Entrepreneurs need to consider how much money it will cost to send the letter, how much it will cost to sue and home much it will cost to negotiate a settlement.”

According to attorney Konrad Trope, the process can take up to 18 months and usually costs around $3,000.

Entrepreneurs should note that under certain circumstances, a business with the same name can exist. “If the business does not operate in the same trade channels or if the goods or services are completely different, it may be possible that the trademark can be used by two or more owners,” added Hilfer, “Also, if the mark is a weak mark, meaning it is primarily descriptive or the marketplace is flooded with similar marks, it may be more difficult to prevent others from using the same mark.”

Business owners should also be diligent about trademark maintenance. A trademark registration is good for ten years. The U.S. Patent and Trademark Office requires that, between the fifth and sixth years, business owners submit additional evidence of continued use.  Between the ninth and tenth year the business owner must file a declaration of use again and an application for renewal.

“An issue we see popping up for clients is how they are using the mark ten years later does not look like what they registered,” said attorney Tamera Bennett, “the trademark office could consider that a material change and the business owner will have to file a new application.”