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.
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.