Trademark Infringement

You're the CEO of an up-and-coming Web start-up called "Widgets.com." Your company sells widgets over the Internet to people throughout the United States. One day, you're reading The Wall Street Journal and discover a new competitor calling itself "Widgets-R-Us." What do you do?

Your options depend at least in part on whether you've properly protected your trademarks.

To protect a trade or service mark, you need to correctly use and register the mark. Once you decide upon a particular mark, file an application with the US Patent and Trademark Office. The timelines of your application could make a difference if your company later becomes involved in a trademark legal dispute. Even if your business isn't yet off the ground, you can still file an application, based on your intent to use the mark in commerce. When you begin to use the mark, there are a number of things to keep in mind:

• Use the "TM" (trademark), "SM" (service mark) wherever your slogan or trademark appears.
• The "®;" symbol can only be used when your product or service is registered in the US Patent and Trademark Office.
• Always use your marks in a consistent way.
• Use trademarks as adjectives, not as nouns. Don't use your marks in a plural or possessive form. And set your mark in all capital letters or initial capital letters. All these recommendations are designed to retain the distinctiveness of your mark.
• Train your employees in the proper use of trademarks and consider appointing someone in your company to monitor your marks and their use - a sort of "trademark Czar."
• If you license your marks to others, be careful to monitor and control the quality of the goods and services offered and the licensee's use of your marks.
• Keep written records regarding use of your marks.
• Above all, consider speaking to an experienced trademark attorney to make sure you do everything properly.

Assuming correct use and registration, Widgets.com could go after Widgets-R-Us for trademark infringement. Although a claim of infringement isn't dependent upon federal registration, it greatly improves the position of the company or individual making the claim.

Trademark infringement depends on the likelihood that there will be confusion in the marketplace. The party claiming infringement has the burden of proving ownership of the mark as well as the potential for confusion. In the case of two direct competitors with similar product lines, confusion is easier to prove. Most cases aren't this clear cut. That's why courts consider a number of factors when they hear an infringement case:

The similarity in the overall impression created by the two marks (including the marks' look, phonetic similarities and underlying meanings);

The similarities of the goods and services involved (including an examination of the marketing channels for the goods);

• The strength of the plaintiff's mark;
• Any evidence of actual confusion by consumers;
• The intent of the defendant in adopting its mark;
• The physical proximity of the goods in the retail marketplace;
• The degree of care likely to be exercised by the consumer; and
• The likelihood of expansion of the product lines.

Generally, courts consider the first two factors to be the most important. But it may never come to that. A strongly worded letter from an attorney may be sufficient to stop the infringement.

If it should come to litigation, the trademark owner has several remedies if infringement is found. Courts can grant a permanent injunction so the infringer can't use the disputed mark. Money damages may also be awarded. If you've federally registered the trademark, attorney's fees can be recovered by the successful plaintiff. This is a huge factor and another big reason to register the mark with the Patent and Trademark Office. But the best way to protect your trademark is to register it immediately and begin using it in commerce as soon as possible.