When deciding whether to adopt a new trademark (brand or business name, logo, etc.), a primary consideration is what other businesses are using similar marks. You do not want to adopt a mark that will result in a costly legal confrontation.
However, some businesses are much more likely to cause you problems than others. Evaluating the nature of the other users is key to determining the risk of litigation or other conflicts. Here are some guidelines for evaluating users of similar marks.
1) Big Companies are Litigious
Big companies know the value of brands and of trademarks. They are paying attention to who is using what trademarks and to what trademarks are being registered with the United States Patent and Trademark Office (PTO). If you try to register a trademark similar to theirs, you can bet they will find out.
PTO records are for the most part a matter of public record. They do not have crystal balls, but if your business grows large or your product becomes popular, they will most likely find out if you are using a similar trademark, even if you choose not to register it.
And once they find out, they will come after you. They are perfectly willing to oppose or petition to cancel your trademark application or registration, or to file a lawsuit for trademark infringement. If you are willing to agree to limitations on your use of the mark, you may be able to continue using it- on the other hand, you may have to change the mark. And if you do not want to comply, they are perfectly willing to spend tens of thousands of dollars fighting you.
So if the conflict is with a Fortune 500 company, you should usually just forget it. There is no point in inflicting the cost of a complete name change and marketing redeux on yourself, not to mention the concomitant legal fees. Find a new name.
2) Small Businesses Are Oblivious
On the flip side, for much smaller businesses with a more local or regional clientele, trademark issues are not as important. Few are willing to pay for the cost of trademark monitoring to make sure no confusingly similar trademarks are being registered. Many very small businesses do not even register their trademarks or have a basic understanding of trademark law.
They are, in general, very unlikely to discover your use of a similar trademark or to understand their options if they do. The only way you are likely to get into trouble is if your business gets huge and suddenly people start thinking about ways to get into your deep pockets. But by that time, your trademark may be incontestable, making it difficult for anyone yo cancel your registration.
When a smaller business gets in a trademark conflict with a really big company, it is often because the smaller business is blindsided by an accusation of trademark similarity that it never saw coming. Large corporations will go after trademarks that are even slightly similar. Small business usually will not.
3) Close Competitors are Unforgiving
The closer a competitor another user is to you, the more likely they will discover your use of the mark and make it an issue. Being in the same industry or the same geographic region and marketing to the same end-users or through the same stores or distribution methods are all factors contributing to closeness between competititors.
Businesses are more familiar with the companies and brands in their industry and geographic region. When business share distributors or end-users, confusion is more likely, and any similarity between marks is more likely to be brought to their attention.
On the flip side, companies that are not direct competitors are less likely to discover or care about your similar mark, and working out an agreement is easier if a conflict does arise.
Look in the Mirror
Finally, consider some characteristics of your own business that could make your trademarks more or less vulnerable to challenge.
Size/Growth -Size works both ways. A bigger company leaves a bigger footprint and its trademarks are more likely to be noticed. Size can deter weak challenges from medium or large firms looking for a quick and inexpensive trademark enforcement action.
However, size can also sometimes encourage conflicts, especially when infringement is clear, because the potential damage to the other party is greater and because there is the potential for a payoff.
If your company is small but growing fast, a conflict may be unlikely now but foreseeable and damaging in the future. Growing companies may also get more publicity and spend more on advertising, increasing awareness of your trademarks.
Web Presence – Web presence can function as a proxy for size. A relatively small business can have a very big impact online. That means that, like a big business, its trademarks are more likely to be found and to confuse consumers.
However, a web presence does not carry the benefit of deterrence. Your strong Internet presence can be a liability when it comes to avoiding trademark conflicts.
Conclusion
These are just some of the factors that affect the likelihood of a conflict between your business and another business that uses a similar trademark. A trademark attorney can help you to evaluate the risks. Is there anything important that I have left out? Any related stories you have to share? Any questions? Leave them in the comments.