Receiving a formal notice that your business may be infringing on someone else’s trademark can be a stressful experience. It often arrives in the form of a cease and desist letter, creating a sense of urgency and confusion. However, taking a deep breath and following a measured, strategic approach is the best way to protect your business. This guide will walk you through the essential steps to take, what to do if you believe the claim is unjust, and the serious consequences of ignoring the issue.
First Steps: What to Do Immediately
Panic can lead to poor decisions. Instead of firing off a quick, emotional response or ignoring the letter altogether, take these initial steps to handle the situation professionally.
1. Do Not Ignore the Notice
The single biggest mistake you can make is to ignore a trademark infringement claim. Doing so will not make the problem disappear. In fact, it can escalate the situation significantly, potentially leading the trademark owner to file a lawsuit against you. Acknowledging the seriousness of the letter is the first step toward resolving it.
2. Consult with a Trademark Attorney
Before you do anything else, contact an attorney who specializes in trademark law. This is not the time for a general business lawyer; you need an expert who understands the nuances of intellectual property. An experienced trademark attorney can help you understand the validity of the claim, assess your risk, and outline your legal options. Their guidance is crucial in navigating this complex process and avoiding costly mistakes.
3. Review the Claim Carefully
With your attorney, analyze every detail of the infringement claim. The notice should identify the trademark in question, the owner of the mark, and the specific ways they believe you are infringing upon their rights. Key elements to review include:
- The asserted trademark: Is it a registered trademark with the U.S. Patent and Trademark Office (USPTO)?
- The goods or services: Are their goods or services similar to yours? Trademark infringement often hinges on whether consumers are likely to be confused about the source of the products or services.
- The geographic area: Where does the trademark owner operate? Do their rights extend to your area of business?
What If You Believe the Claim is Unjust?
Sometimes, trademark claims are unfounded. The other party may be overstating their rights, or they may simply be mistaken. If you and your attorney believe the claim against you is incorrect or unfair, you have several avenues for recourse.
Gather Your Evidence
Your first move is to build a case that supports your right to use the mark. This involves collecting documentation that shows when you first started using your business name, logo, or slogan in commerce. Evidence can include:
- Business registration documents
- Dated marketing materials or advertisements
- Website launch records and archives
- Invoices or sales records showing the mark in use
This information can establish “prior use,” which can sometimes be a powerful defense against an infringement claim, especially if the other party’s trademark rights are recent or geographically limited.
Explore Potential Defenses
Your attorney will help you determine if any legal defenses apply to your situation. A common defense is that there is no “likelihood of confusion” between your mark and the accuser’s. This argument asserts that consumers are not likely to mistake your brand for theirs because the marks, goods, or marketing channels are sufficiently different.
Another possible defense is “fair use,” which allows the use of a mark for descriptive or informational purposes. For example, a repair shop might use a brand name to advertise that it services those specific products.
Challenge the Claim
If your position is strong, your attorney may advise you to respond to the cease and desist letter by formally challenging the claim. This response, drafted by your legal counsel, will lay out the reasons why you believe you are not infringing on their trademark and present the evidence you have gathered. This can open a dialogue for negotiation and may lead to the other party withdrawing their claim. In some cases, you may even be able to seek a declaratory judgment from a court, asking it to rule that you are not infringing.
The Risks of Willfully Ignoring a Valid Claim
If your attorney confirms that the infringement claim is valid, continuing to use the trademark is a high-risk gamble. Choosing to ignore the notice and carry on with business as usual can lead to severe legal and financial ramifications.
Lawsuits and Financial Penalties
When a trademark owner sees that you are knowingly continuing to infringe after being notified, they are highly likely to file a lawsuit. This is known as “willful infringement,” and courts do not look upon it favorably. If they win the case, the court can order you to:
- Pay damages: This can include any profits you made while using the infringing mark.
- Pay treble damages: For willful infringement, the court can triple the amount of damages awarded.
- Pay the plaintiff’s attorney’s fees: You could be responsible for all legal costs the other party incurred while suing you.
- Destroy all infringing materials: This includes signage, products, packaging, and marketing collateral, all at your own expense.
These costs can easily reach tens or even hundreds of thousands of dollars, a financial blow that could be devastating for any business.
Damage to Your Business Reputation
Beyond the financial penalties, a public lawsuit can cause significant harm to your brand’s reputation. Being labeled as a business that knowingly copies others can erode customer trust and damage your standing in the industry. The time, energy, and resources spent fighting a lawsuit also divert focus from what truly matters: growing your business and serving your customers. The negative publicity and distraction are often as damaging as the legal fees themselves.
Conclusion: Protect Your Business by Acting Responsibly
Receiving a trademark infringement notice is a serious matter that requires a calm and strategic response. By engaging a qualified trademark attorney, carefully evaluating the claim, and understanding your options, you can navigate the situation effectively.
Whether the claim is valid or unjust, taking deliberate, informed action is the best way to protect your assets, your reputation, and your company’s future. Responding properly can lead to a resolution that might involve anything from a simple brand adjustment to successfully defending your right to the mark. Ignoring it, however, almost guarantees a much more difficult and expensive outcome.
Law 4 Small Business (L4SB). A Slingshot company. A little law now can save a lot later.
