How they are handled and what happens if you don’t fight for your trademark?
Nobody wants to get involved in litigation. It is expensive, stressful, time consuming and the outcome is always uncertain. Nonetheless, litigation is one of the risks that comes with trademark use. If you use a trademark that is confusingly similar to another party’s prior existing trademark, they might sue you for trademark infringement. Additionally, if another party adopts and begins using a trademark that is confusingly similar to your trademark, you may be forced to litigate against them in order to safeguard your rights.
A trademark is a form of property, and like any other form of property there are costs involved in the upkeep of the property. For trademarks, these costs include monitoring and enforcement. Monitoring is the ongoing surveillance of the market and trademark register for infringing uses or infringing applications for registration. If you do not maintain your property, for example your house, its value will decrease: the roof may leak, the basement may flood, etc. and if you fail to enforce your trademark rights against infringers the value of your trademark will decrease. If the marketplace includes several trademarks that are very similar to yours, your trademark will lose some of its unique source-identifying capacity and some of its reputational good will and accordingly will become less valuable. Since your trademark is one of your key business assets, your entire business will then become less valuable. This is why it’s so important to enforce your trademark rights. But you must not be overly aggressive in doing so. Nobody likes a trademark bully and the reputational harm that can come from being shamed as such on social media can be very detrimental, especially to companies whose products rely on a broad base of retail consumers. So, it’s critical to walk a middle line when it comes to enforcing your trademark rights. Don’t be so lax that your rights are eroded, but don’t be so aggressive that you are characterized as a trademark bully.
You may wonder how trademark infringement litigation works.
Usually it begins with a cease-desist letter (although this is not necessary). If the parties cannot work out some “amicable” resolution to the dispute, a lawsuit may be the only way to resolve the issue. The questions will be whether use of the allegedly infringing trademark is likely to cause consumer confusion. In other words, will the relevant set of consumers be likely to believe that the defendant’s goods or services marketed with the offending trademark emanate from or are affiliated, licensed by or otherwise connected to the plaintiff? If the plaintiff succeeds in proving there is a likelihood of consumer confusion and the defendant is not able to put forth an affirmative defense (such as if the plaintiff waited too long to assert its claims) the plaintiff will win the case.
Remedies for trademark infringement include an injunction, which is a court order to stop the use of the infringing trademark, and may also include monetary damages.Depending on the facts, any of the following measures of monetary recovery could be applied by the court:
- defendant’s profits;
- plaintiff’s actual business damages and losses caused by the infringement;
- plaintiff’s loss of profits caused by the infringement;
- punitive damages in addition to actual damages, and
- reasonable attorney’s fees incurred in prosecution.
Costs of the action (court costs) are also likely to be awarded to the prevailing party.
To put it in a nutshell, as a trademark owner you can lower your risk of being the target of an infringement lawsuit by properly searching your desired trademark before you begin using it or apply for registration. You can properly enforce your rights by allocating an appropriate budget for monitoring, and if the need arises, taking legal action against infringers after carefully balancing the risks and rewards of doing so. Don’t be too lax and permit infringing activity to continue unchecked, but don’t be a trademark bully. Pick your battles wisely.
Always consult with your trademark attorney before making any changes to the way you use the trademark.