May It Please the Mozzers,
Welcome to another edition of Legal Mondays! I’m very pleased to be back in town with all systems go.
Before I left for vacation in February, we were looking at trademark law basics. Today, we’re building on the basics and moving into problem sets. Today's topic is How screwed am I? Another business has the same name as mine.
Chances are that many of you will receive a nastygram or threatening email from somebody accusing you of infringing on his trademark by copying his business name, slogan, or logo. It's only a matter of time in the online world. Cease and Desist letters are ubiquitous. After reading this post, you will be able to evaluate your potential risk and respond in a a smart, business-like manner.
Before we get into the meat of the post, I need to do that disclaimer thing. This post is not legal advice and I am not your attorney. I am providing you information about the law. If you’re facing a trademark issue, you should consult a qualified attorney. Hopefully, after reading this post, you’ll know what kind of information to gather for your attorney and what questions to ask.
Another Business Has the Same Name As Mine. How Screwed Am I?
The short answer is, “it depends.” It depends on (1) Whether the other business is in the same industry; (2) Whether the other business is in the same geographical market; (3) Who was using the mark first; and (4) Who registered the trademark first.
Let's go over a few basic assumptions:
- This post is equally informative for other kinds of trademarks as it is for business names. Thus, you could substitute "slogan," "logo," or "trade dress" for "business name" in any of the examples below.
- None of the examples below apply to "very famous marks." For reasons described in my basic trademark law post, very famous marks are treated differently under the law. If you've named your business after a very famous mark, it would be a good idea to pick a new name. Even if you had a good argument as to why you were not infringing the very famous mark, the other company could certainly outspend you on attorneys' fees and court costs. My advice is just don't go there. It's not worth it.
- All of the examples below assume that your business name is eligible for trademark. Obviously, the first step when looking at a trademark problem is to determine whether the alleged marks are even protectable. "Best SEO" is not a protectable mark, so you can't keep someone else from using it and they can't keep you from using it. It's purely descriptive. The examples below assume there is at least some potential for trademarkability and that the only remaining question is who trumps who with conflicting marks.
Remember, it is possible for two businesses to own the same or similar marks (e.g., Delta Airlines and Delta Faucets). The guiding principle is consumer confusion. If the two marks identify different products and operate in different markets, consumers are not likely to be confused. However, if the business operate in overlapping markets and have similar names, there are a series of factors we must consider to determine who has priority.
1. Does the business claiming infringement operate in the same industry as your business?
Remember that trademark's guiding principle is "do not confuse the consumer." Thus, if it is really unlikely that the other business's customers are going to be confused because you have the same name, then there really isn't a trademark issue. One of the factors courts look at to determine likelihood of customer confusion is whether the two businesses are in the same industry.
If your business name is identical to another SEO business, then you could be screwed; It certainly requires caution! However, if you provide SEO/M services and the business claiming infringement designs cookware or provides financial services, then there is really not a trademark issue. You're not screwed.
If the other business does website design or traditional marketing, the issue is arguable. It's possible that customers may get confused by the names. You should consider settlement.
2. Does the business claiming infringement operate in the same geographic market?
If your customers are in different geographical areas, there is less likely to be customer confusion because you don't have the same customers. For example, in the old days, a traditional Californian marketing firm was not competing for customers in Florida. Thus, you could have AAA Marketing in Florida and in California without any infringement concerns. They both had a right to the trademark.
However, this kind of traditional analysis has become complicated by the internet. If your business is online and the other business is online, then you may be screwed because your markets may overlap. Exercise caution and analyze the other factors carefully.
If the other business is a traditional marketing firm based out of Florida that has not done much business over the web, then you're probably less screwed. You may be forbidden from performing marketing services in Florida. (Ever wonder why you can’t eat at Burger King anywhere 40 miles south of Chicago?) However, you could use the same name and offer marketing services everywhere else.
3. Which business was using the business name first?
If after looking at the two questions above you've determined that the other business shares your market, then you need to determine who was using the business name first. Trademark rights are established on a first-come, first-serve basis. You want to be the first business to have used the mark so that you can establish yourself as the senior rights holder. If you started using the business name before the other guy, then you're in great legal shape (assuming you can prove it!). On the other hand, if the other guy used the business name first, then you're pretty dang screwed.
4. Who registered the business name first?
This question is related to the third factor, above. In a perfect world, before registering a trademark, you conduct a thorough search of your market to make sure that nobody other than you has been using the trademark. Thus, in the ideal world it would never be the case that you have registered the trademark, but someone else was using it before you. Because the first person to use the business name gets dibs on it, the trademark registry would be a completely accurate database of who owns what mark. Unfortunately, life is messy and sometimes people register trademarks that were being used by other businesses first.
If you start using the business name first, but the other business registered it first, then you still have the right to use the name, but only in the market you were operating in at the time the other business registered the name. Thus, you're only sort of screwed. You basically have no right to expand your market. The business who federally registered the name has priority everywhere else and can prevent you from using the mark in new areas. Thus, it's never too late to register your trademarks!
If the other company registers the mark before you even started using it, then you are very screwed. By registering the name, the other business puts you and everyone else on constructive notice that it owns the mark. Thus, you may find that a competitor has already registered, so settle the claim quickly and efficiently.
Problem Sets
Let's run through some examples.
1. I do not have a federally registered mark, and neither does the other business with the same name.
Let's assume that you own Trojan SEO, a search engine optimization company. You began your business by launching your website in October 2004. However, you didn't get around registering your trademark. Lo and behold, in October 2004, another SEO started the company Three Trojans SEO. This other company with the similar name is also unregistered. Both companies provide SEO services in North America and primarily advertise for clients through their websites.
In this example, both businesses could be sort of screwed. There is clearly potential for consumer confusion because the names are similar and the businesses are operating in the same market. In situations like this, where neither can prove superiority, courts will ultimately adjust one of the marks to lessen the risk of confusion and allow both businesses to continue their operations with minimum of disruption. For example, the Court may order you to change your name to War Horse SEO.
There would be a very different result if either party could prove that it was the first to use the name. For example, if you were using Trojan SEO since 1997 and Three Trojans SEO didn't start until 2001, you would have clear priority over them. You would be entitled to use the name Trojan SEO in that market.
2. Even though I was the first to use the mark in commerce, the other business federally registered the trademark before I could get to it.
Let's assume that Three Trojans SEO has a website they started in 2001 and they federally registered the name at the same time. Your company, Trojan SEO, went online in 1997 and never registered anything. You're the first in time, but how does that stack up against a federally registered trademark?
Well, chances are you will be allowed to continue to use the name in the marketing territory that existed at the time Three Trojans registered. However, you will not have priority in any markets beyond what you were using at the time Three Trojans registered the domain name. Your growth is capped.
Further, if you can prove that Three Trojans SEO knew that you were using the name Trojan SEO before it started using Three Trojans, you will be in a very strong position. Willful infringement is punished severely. Three Trojans SEO might have to cancel its trademark registration if it willfully infringed your trademark.
3. My competitor began using and federally registered the business name before me.
If Three Trojans SEO both registered the mark and was using it before Trojan SEO, then it can force Trojan SEO to stop using the similar name. It may even be entitled to an award of damages. In this situation, you're very screwed. Get out of this situation as gracefully as possible.
4. Both businesses, operating in overlapping markets, registered the same or similar names.
Very rarely, two businesses operating in overlapping markets will register similar marks. It's not supposed to happen, but things slip through the cracks. It usually takes either an administrative proceeding with the Patent and Trademark Office ("PTO") or a lawsuit to resolve the situation. The outcome is difficult to predict and usually depends on how the situation developed in the first place. Unless you have deep pockets for litigation, you should think very carefully about reaching a negotiated settlement as quickly as possible to keep costs low.
5. The other business filed an "intent to use" application before I used the mark.
If you're putting together a business plan and have found a business name you want to use, it is a good idea to file an Intent To Use application with the PTO. If you file an Intent To Use and someone starts to use the same or similar business name before you launch, your rights are protected. Thus, "intent to use" applications are an important part of putting together a viable business plan and protecting your interests during the process.
Conclusion
In summary, friends, the first thing you need to determine is whether you are competitors with the business who holds the conflicting mark. If you are competitors, then you have more analysis to do. If you're not competitors, then there isn't much to worry about. Trademark is designed to prevent consumer confusion. If there is no chance for consumer confusion, then you have very very low risk.
If you determine that you are competitors, then you need to find out who began using the mark first and who registered the mark first. The best case scenario is that you both used and registered the mark first. Alternatively, the next best thing is that you have used the mark first. This will secure your right to use the mark in the market you were using before the other business registered the mark.
If you determine that your competitor has both used and registered the mark before you, then you should probably focus on reaching a negotiated settlement as quickly as possible. You're basically screwed. Sorry.
I hope this post gives you some guidance in evaluating trademark infringement threats. We still have a lot to discuss about trademark, including domains names, cyber-squatting, the various forms of dispute resolution available, and the registration process.
Thanks so much for your kind attention. I look forward to your questions and comments.
Best Regards,
Sarah
p.s. If any of you have worked with an attorney who has a good grasp on technology issues that you would recommend, please email or private message me his or her contact information. I receive a lot of requests for referrals to attorneys for cyber law issues. I would like your help in finding excellent attorneys from all over the world to refer people to. Thanks for your help!
I have selected a name I'd like to use for my new business, but while there is no similar type business in the US with the same name, there is a business in Canada doing almost the exact same thing mine will be doing, that is already using that name. What, if any, are my limitations and/or is my liability to that Canada company, for my using the same name in the US when it's only being used in an entire other country? Or am I free to use it in the US regardless of the fact there is a like company in another country with the same name? EXAMPLE: Going generic just for purposes of this post and using a different kind of business in my example here than I'll actually be doing, my selected name is "XYZ Accounting Services". Theirs is simply named "XYZ" but is also an accounting company that offers many of the same services to some of the same types of companies to what I'll be offering - though I won't be doing any work or marketing in Canada, and I don't believe that they do any in the US. Thanks.
Hello,
what if the name of the 2 company are the same and the type of organization also the same but there are in different country like in U.S. and somewhere in Asia. Will there be any problems?
Thanks!
Great Post on US trademark law. I learned the hardway that some countries don't recognize a common law trademark and the right of first use. I believe UK law operates on the premise of first to file. You can check my LinkedIn profile, Alan Macomber. There are three good IP lawyers there. One in Dallas, Providence and London.
Hi,
Might be a stupid question but, what if there are 2 company names that are same, different countries, same trade but supplying products within their own countries?
Great informative and detailed article. This seems to be a problem for many businesses these days. People must do their research beforehand and be proactive in making the name theirs if planning on really building their business!
Is there any provision for parody of a well known brand?
Great question JR.
Parody is a defense to Trademark Infringement. But make sure it's actually parody. The more critical, insightful, and not-for-profit the parody is, the more likely you will have a successful parody defense.
If the parody isn't really insightful and makes a lot of money, the less likely your parody defense will succeed.
Best Regards,
Sarah
Hiya guys, thanks for the great posting Sarah! Am going to go slightly off-topic, but the story is relevant....
Here in South Africa we've had quite a lot of parody rip-offs of well known brands. Am going to share two with you.
Our primary fixed line telecommunications service provider is named "Telkom". They're a government parastatal that was privatised about a decade ago, and they've always held the monopoly on fixed line telecommunications in our country.Their service levels are generally appalling, and their broadband service can be very dodgy and super expensive compared to overseas offerings.
A spoof website, named "hellkom" was launched, which is aimed squarely at exposing their incompetence and extravagant pricing, with loads of relevant stories and exposes. Suffice to say telkom didn't like this one bit, and sued...they didn't win, and www.hellkom.co.za is still going strong!
Then a popular t-shirt series has done parody rip-offs of many local and international brands, one that springs to mind is Carling Black Label beer....the logo text was changed to "Black Labour" and it further elaborated on how this country was built on black labour in the apartheid years. This hit a big nerve with South African Breweries, and they successfully sued, forcing the shirts to be pulled from vendors.
Point is that a parody of a successful brand can gain widespread popularity very quickly, especially if there is a bit of controversy. To try and then claim the parody as your own brand carries huge risk though, because the big guys will try to bankrupt you with endless court proceedings.
Hi, I'm a website designer in a small town (approx 25,000) and I have the name of my town+restaurants.com registered and the website nearly complete. For example PineBluffRestaurants.com (that's not the real name of the website, but it's a good example). I've found out recently that there is an organization which owns 3 or 4 local restaurants (franchise types) that have a holding company with the same name less the .com. For example: Pine Bluff Restaurants would be their business name but the names of the restaurants are all different and there is no restaurant with the name Pine Bluff Restaurant(s). My website is a restaurant guide ONLY and is completely internet based. Theirs is composed of actual free-standing physical restaurants. Do I have a potential conflict there? Thank you so very much for your help. I'm a bit confused as to what I should do, if anything.
This might be better answered by a lawyer, to make sure that the advice you get is appropriate for your specific situation.
Hello,
i have my company for over 9 years already and tried build over these years good reputation, however i have noticed that theres some company who ruin that because they use realy similar name to mine fir egzample my name is "goodapple" and their name is "apple good"
we are in the same industry and our businesses are in the same geaographical location 5 miles appart.
My potential customers from advertisement go to them based on how similar names are ; mine was 4 years ahead of theirs)
My 5 stars reviews from satisfied customers goes to them ( although they dont advertise at all) but very bad reviews goes on our account whay we have to fight because these people posting them are were not our customers
Need help!!! What to do!!!
Hi, my business name is "J & J AMerica's Best Wing" and i got call from trademark owner of "AMerica's Best Wings".....and asked me to change our business name for they're registered name is "America's Best WING" we have separately logo, menu and every thing is different.....DO I still have to change mybusiness name??
This was really helpful. I've had someone chase me via Nominet saying that because we have domain names with similar meanings. Many thanks :)
Hi, I am screwed. The name I picked for my business 20 yrs ago was trademarked in 1982. I opened in 1995. I am now told to cease using my name (we are in the same industry and they have 15 offices with one that opened a few yrs ago in my geographical area). I know I have to change my name as well as take down my website and my email address (they have that name in both). My question is this, I am an L.L.C. Can I leave that original name and just change dba as to another name?
Can two companies have the same name (but different only by a hyphen) and the same national consumers based on a simple description in their names?
Example:
Two companies that sell dining room furnishings
company name #1: dining room furnishings with website: diningroomfurnishings.com
company name #2: dining room-furnishings with website: diningroom-furnishings.com
Thank you for the sharing of your knowledge. Was wondering if you happen to know about international brand conflicts?
If there is no US Patent for the brand I moved forward with, but there is UK brand with nearly identical brand name, (that is TM) is there a serious conflict. I have not done business outside of the USA but it's likely I will. In the beginning stages so I can still adjust and change my name.
Any help would be cool, Thank you.
"Further, if you can prove that Three Trojans SEO knew that you were using the name Trojan SEO before it started using Three Trojans, you will be in a very strong position. Willful infringement is punished severely. Three Trojans SEO might have to cancel its trademark registration if it willfully infringed your trademark."
In that situation you said Trojan SEO didn't register anything. So how would Three Trojans willfully infringe on a trademark that didn't exist in the first place?
Am I missing something?
How does it work when filing for an LLC? Can LLCs filed in the same state have the same name if they are in different industries and markets?
Hi guys
The Newbie here this blog gave me hope and shattered it again... Not sure where I stand.
I am about to start a new business in Australia, registered it here in the UK first but am in the process of closing it again (form printed and signed but not sent)
I am opening a company called Axenture Limited Axenture, the Australian Adventure. (My Name is Axel, Adventure...) (Recruitement / Education) it provides Internships, Accomodation and Language Courses (through 3rd parties). The candidates pay for the service. I very successfully worked in such a company and placed 500, now wanting to start my own....anyway...
1 month after the company was registered, lawyers urged me in a letter yesterday to rename the company and get rid of all marketing material, etc. They mentioned that Accenture is very well known but no mention of Registered Trade Mark.
I registered the domain www.axenture.co and www.axenture.co.uk a month ago with axenture.de to follow.
Axenture.com diverts to accenture.com (since 01.01.2000 approx.) and there is the problem!
Accenture, the global leader in management consulting doesn't like my work. My web page has been put on 'under construction' for now...I want to start trading around Mid December
My logo is blue, the site brownish and is in no way to be confused with accenture > in red/dark red.
My Students would be from Germany, France etc, the companies only from Sydney. (as far as clients / area go)
I guess what I am doing here is asking for your take on things. accenture operates in Australia but in an entirely different market.
I will never exceed 500 placements per year and think of working with 2 or 3 employees max. Not for lack of conviction but I studied the market and competition.
I am of no risk to them and even have a disclaimer on the front page and the Legal bit:
"Axenture Internships Limited Not to be confused with accenture PLC Dublin, Ireland Management Consultancy."
Thanks guys
Axel
Hi,
We have a company name ioutletstore and we sell used iphones what do you think about having a domain name ios that are the first letters of ioutletstore. Do you think this will be a good strategy? can this be confusing for the customers?
Thank you for your help
Sara,
A company that has trademarked a name is now operating & marketing online under a shorter version of that name, but they have not registered it as a DBA or trademarked the new name. What can be done to stop them or force them to go back to their originally trademarked name? Can you loose a trademark by deviating from that & operating under a different name? This particular business is in the same industry, offers the same product and the name is very similar to our business. What can we do to protect our company from what appears to be intent to cause customer confusion?
Hi Sarah
Thank you for a very infomative post. I have an interesting situation where I registered a .org name where a person is already running a .com by the same name.
The interesting point though is that the name Sodwana Bay is a place name or town. My understanding is that a person can not register a place name as a trademark. Therefore is it true that a person can not claim exclusive rights to a place name as a domain?
Your help would greatly help a nasty dispute. Thanks in advance.
Nice post. I have had a few question regarding this post since quite a while and this post has answered most of them. Thanks !
As I understand it, and correct me if I'm wrong, filing a trademark is a somewhat costly operation $5k and up. What are your suggestions for people who are bootstrapping on a limited budget.
I'm interested in this too, though a UK mark is a lot cheaper: ~£500-600 (of course this = $10m or so at current exchange rates).
This is good info Sarah - question though - how does the dispute over domain names get adressed?
If co A had a trademark "thisisjustus" and then co B bought "thisisjustus.net"?
Great question Rishil. And it is going to be the subject of one of my upcoming posts.
But for now I'll give you the short answer. These cases are typical resolved in one of three ways. I'll list them hear from cheapest to most expensive:
1. Private Mediation/Aribtration. This is when the parties privately negotiate a settlement between them. They don't seek outside help (other than attorneys, perhaps) to resolve the dispute.
2. Arbitration through ICANN and its Uniform Dispute Resolution Policy ("UDRP"). Under UDRP, an authorized arbitrator orders the domain name transferred to the trademark owner if the domain name is identical or confusingly similar to the trademark, the registrant has no legitimate interests in the domain name, and the domain name was registered in bad faith.
3. Civil lawsuit for trademark nfringement, violations of the Anticyber-Squatting Act, and unfair business practices. Filing a lawsuit takes a long time and is expensive, but for some situations it may be the best answer. For example, you may have to go this route if you can't prove that the registrant was acting in bad faith.
I hope that this helps point you in the right direction. Stay tuned for my future post that will cover these options in greater detail.
Best Regards,
Sarah
Excellent, thanks! heres the tricky part - know anything about the UK and resources?
I'm no expert, but if all of the parties are in the UK, you will probably go through Nominet's dispute resolution procedures. This is a good thing because they are generally cheaper and faster than UDRP.
Now, if the domain is registered in the U.S., then Nominet's process is not available. The location of the parties may further influence whether Nominet's process is an option.
I would start with the website above and see if that can answer your questions more specifically.
Thanks for your question. And good luck!
I think our case is very common -- we have our business name (The Education Station) registered for our state, from back in the days before e-commerce, but really it seems that every state has one. Before we all had websites, the only consequence was that we'd occasionally get a box for the store of the same name in Arizona. Now, we have customers walking in to complain that they haven't gotten their order -- which they placed with The Education Station in Canada, who is still ahead of us on Google.
After 16 years in our brick and mortar store, we're not thinking about changing our name, but it is definitely confusing, and probably leads to more problems online than we realize.
Some links to Trademark Cases: https://cyber.law.harvard.edu/property00/domain/CaseLinks.html
I've recently been on the end of an email threatening (in a veiled manner) legal action regarding my local dba. Very unpleasant feeling and I was not impressed by the email at all. I am a local SEO and not trying to tread on the toes of a "famous seo" David
psst! Anyone want to buy three (good PR) domain names???
Duncan and I got smacked down by this kind of thing back when we started our first business in high school (no, I'm not going to say what it was called). We didn't do much research before starting, but I wonder if we could have put up a bit more of a fight instead of folding as soon as we got a nastygram.
I know what you mean - I am in the middle of 40 odd disputes... though none of these are personal.
Sarah,
Great timely post.
We are examining this area at this time ourselves.
We should all be more informed when it comes to the legal issues.
Don't you think a better name would be Legal Mondaze?
I was completely prepared to register my business name with my state and trademark office. However, I found a company with a very similar name providing the same service in England. I will be doing business in the US. Also the website is copyrighted from 2003. This other company has not filed for a trademark in the US. What are the legal issues surrounding this? Thank you.
Great post Sarah, and very informative.
I tried the "conduct a thorough search" link, but it appears to be tied to a session you had when writing the post.
You may want to replace it with:https://tess2.uspto.gov/bin/gate.exe?f=tess&state=vqe5vb.1.1
Again, solid piece and it was great to attend your presentation at SMX West.
Welcome back from your travels Sarah! Got any cool pictures you can share?
Try this link instead https://www.uspto.gov/main/trademarks.htm
Eric your link had a session timeout too. :-)
epic fail
Thanks zegron!
Thanks for the heads up about the link guys! I appreaciate it!
Best,
Sarah
Thanks Eric. And it was great to meet you at SMX West! Thanks for your feedback.
Hi Sarah, thank you for your informative post, I have searched numerous websites online for help on this issue but did not find any. I just found out through Google Search that a company has legally registered itself as "EBITS ONLINE LIMITED" in 2008 yet i have been running my registered business as "EBITS ONLINE" since 2006. I have done serious Internet marketing for my business and its really annoying finding another company in my search results with the exact same name as my business. I don't know what action to take as of now because my business is legally registered in Kenya and the other company is registered in Essex UK. Any help?
Sarah,
I recieved a telephone call the other day from a company in Atlanta that is going by the same BASIC name as my company. Said Atlanta jerks told us that we were infringing on their copyright, I did a copyright search and they aren't listed. Now this guy is telling me I have to change my website and domain name because his customers might get confused. I'm in detroit and he is in Atlanta..
I really have no desire to trademark the company name, also his name is Motor Sports and mine is Motorsports .. Not sure what to do here. The guy is basically pissed because my name comes up first on Google.
A little help?
Thanks Brian
Thanks for this post.
What if two service companies where using the same surname in the same geological area? Would there be any legal action the first one to that area could take?
Oh thank you thank you thank you for writing this post! Being a weekend, there are no attorneys to talk to, and I was SO craving some intelligent discussion about an infringement issue I discovered last night.