What is Trademark infringement?
A trademark registration gives the trademark owner the legal right to sue anyone who carries on business using a confusingly similar trademark. The infringing trademark does not have to be identical as long as it is confusingly similar or is likely to confuse customers into thinking that there is some relationship between the different businesses.
What is the process involved?
Generally, when a trademark owner learns that someone is infringing their trademark, the owner will have his/her lawyer issue a "cease and desist" letter and deliver that letter to the infringing party. Cease and desist letters usually have a time limit for replying, failing which legal action will usually be commenced.
What's in a Cease and Desist letter?
Generally, the cease and desist letter will identify who the trademark owner is, the trademark registration number of the trademark being infringed, and what actions your are alleged to be taking which is causing the trademark to be infringed. The cease and desist letter also usually contains terms demanding that the infringing party immediately stop doing business using the infringing trademark and, in some cases, may demand certain financial payments to cover the trade-mark owner's costs and lost profit from the infringement.
What if the Trade-Mark is Not Registered?
In cases were a trademark is well known in the marketplace, it may be enforced against would be infringes under the principle of passing off.
What is Passing Off?
Passing off occurs when an infringing party tries to trick potential customers into believing that the products of services the party is selling are actually the products/services of the legitimate trademark owner. Essentially, the infringer passes off his/her goods as those of the legitimate trademark owner. For passing off to occur, the original trademark must be well known to customers, sometimes to the point of being famous in the market where the trademark exists.
Passing off is not easy to prove. In order to prove passing off, the plaintiff will have to show that the trademark has achieved a reputation in the marketplace (i.e. has become famous) AND that the actions of the infringing party are very likely to cause people to believe that the infringing products/services actually come from the plaintiff. The two trademarks must be very similar and there should be close similarities between the products and services offered by the two businesses. If all of these things cannot be shown, then it will be difficult to successfully argue passing off.
What defenses can I use against trademark infringement?
The first defense is to argue that there is no likelihood of confusion between your trademarks and the registered trademarks your alleged to have infringed. If the two marks are different, if the channels of trade are very different, if the products are very different and if the type of customers you have are very different, then it is possible to successfully argue that there is no likelihood of confusion.
It is also possible to argue that the trademark registration is invalid because, at the time the trademark application was filed, the trademark was not distinctive. If two or more separate and unrelated legal entities are using the same trademark for the same products and services, then the trademark is not distinctive and cannot be registered. It is also possible to argue that the registered trademark has lost it's distinctive character because the mark has become a generic descriptor for the particular products and services.
What should you do if your accused of trademark infringement?
The first thing to do is contact a trademark lawyer as soon as possible. Do not communicate with the registered trademark owner other than to tell them that you are seeking legal advice. Have your trademark lawyer review the situation and advise you as to what steps you should take to avoid patent litigation or some other form of legal action. The lawyer will most likely reply to the person/company alleging trademark infringement directly on your behalf without admitting any liability on your part.
What is likely to happen if you don't reply to a cease and desist letter?
In many cases, failing to reply to a cease and desist letter is the worst thing you can do. If you don't reply, the registered trademark owner is likely to commence legal proceedings against you and serve you with a legal action. If you fail to reply to the legal action, they will likely get a default order against you. Enforcing the order may result in the suspension of your business operations and result in considerable additional legal costs. If you defend the action, it may be possible to settle with the patent holder, but usually the costs of doing so will be significantly higher than if the matter was settled before the commencement of legal proceedings. Legal proceedings are very expensive and they can be disruptive to business operations.