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May 24, 2011

How to Respond to a Cease and Desist Letter Claiming Trademark Infringement?

Cease and desist letters claiming trademark infringement have an intimidating effect on their recipients. Most San Diego business owners are bewildered and have no idea how to respond. They have been in business for months if not years, and have constructed signs, circulated business cards, advertising and other promotional materials, published websites, formed a corporation and built goodwill and customer loyalty all under their existing name. Now some company they have never heard of is telling them they need to abandon their identity and start all over, a costly endeavor. Ideally, businesses will conduct a trademark search before deciding on the use of a name and logo and then file their own trademark registration, but this is of course hindsight. There are two very important things to keep in mind upon receipt of a cease and desist letter claiming trademark infringement: don't panic and don't ignore it.

742579_when_lightning_strikes.jpgDon't panic because in many cases the issues can be resolved without having to abandon your business' identity. Your mark may not actually infringe on the claimant's mark, you may have a common law trademark giving you the right to use the mark in your geographical area, or the claimant may be willing to license use of the mark, place some limited restrictions on use or request some reasonable modifications to the mark. Remember that pursuing trademark infringement claims is an expensive endeavor and it is often economical for the claimant to work out an agreement with alleged infringers. Usually, a San Diego trademark attorney can assist in resolving the dispute for a reasonable cost. Of course, in some circumstances the claimant will not walk away so easily. It depends on the size of the claimant's business, the strength and recognition of the claimant's mark and the geographical scope of the claimant's customer base. A business won't get very far opening a hamburger joint called McDonald's and utilizing a big yellow "M" at the forefront of its logo's design. McDonald's will pursue a trademark infringement claim no matter the expense.

Don't ignore it because some companies will pursue their claims even if they are not as big as McDonald's. Once a trademark infringement claim is filed in Federal court, you lose significant bargaining power. Even if you capitulate and agree to change your business' name, the claimant will almost certainly want to be recuperated for bringing the action including attorney's fees and other costs associated with filing suit. With or without an attorney, open the lines of communication.

If hiring a lawyer is not economically feasible, start by calling whoever sent the letter and ask them whether there is room for negotiation. However, be careful about making any admissions, especially in writing. For instance, your case will be significantly weakened if you send a letter to an attorney for the other side admitting that your mark infringes on theirs and apologizing for the mistake. Instead, let them know that in the interest of avoiding legal fees and litigation costs you are willing to work something out. Ask what it will take. If you feel you have a strong position, tell them why - your mark has been in use in San Diego County for 10 years well before they obtained their federal trademark registration (giving you a common law trademark). Or suggest that the two marks really aren't that similar and there isn't any likelihood of confusion. If your position is weaker, suggest alternatives that won't involve reinventing a marketing campaign. Maybe the design of your website is too similar to theirs requiring a simple fix. Maybe they'll be willing to license the mark for a nominal fee given that the marks are being utilized in two different states. However, it's best not to play attorney with these folks. Be conciliatory so that they understand your willingness to cooperate. If at any point it seems like you are in for a battle, that's probably the time to contact a trademark lawyer regardless of the cost.


May 23, 2011

How to File for a Federal Trademark?

Few doubt the importance of protecting a business' name and logo with a federal trademark. Yet, many business owners focused on more immediate problems and concerned about the cost and time associated with applying for a trademark put the task aside. Some local businesses that have had a name and logo in continuous use prior to other trademark registrations will benefit from common law trademarks. However, if those businesses begin marketing themselves on line (even if only locally), they may run up against trademark infringement claims. In addition, the common law trademark will only protect a business' name within a limited geographic area where the business is located. While there is no need for all business owners to fall victim to the "you can't afford not to trademark" doomsday threat, it is important to evaluate your risk. Consider consulting a trademark attorney for guidance.

375185_record_shop_1.jpgIf you do need a federal trademark, the process is relatively straight forward but can be challenging for the lay person. The first step is to be sure that someone else hasn't already trademarked the name. This does not necessarily mean that your trademark cannot include the same words as other trademarks. The question is whether your trademark is similar enough to an existing trademark for a similar product or service such that it creates a likelihood of confusion to the consumer. Registering a trademark without an attorney requires some research to better understand this concept and evaluate your trademark against existing registrations. The actual search for existing trademarks is simple enough and can be conducted on the United States Patent and Trademark Office (USPTO) website using the Trademark Electronic Search System (TESS). If there is a potentially conflicting Trademark, be sure to check its status. It may be that the trademark registration was canceled. Finally, qualifying for a federal trademark requires that the mark at issue be in use in interstate commerce. A restaurant that serves customers from other states does business in interstate commerce as does just about any internet business.

The next step is to draft a description. This includes a description of the mark and the goods and/or services the mark will be used with. Refer to the USPTO's manual Acceptable Identification of Goods & Services for valuable assistance in preparing your description. You will also need to select a classification. The classification options are listed on the USPTO website. The trademark application also requires an actual representation of the mark. The mark can consist of the words only in standard letter format or can be a designed logo.

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