What is Trademark Infringement, and How Do I Avoid It?

Trademark infringement is one of the biggest headaches you can run into as a business owner. And even if you think you’ve done everything right when starting your business, a cease and desist letter could still find its way in your inbox. As a trademark lawyer, I’m breaking down exactly what trademark infringement is and how you can protect against it early on in your business to avoid bigger issues later on. 

Trademark Infringement: What It Is

Trademark infringement occurs when someone uses a trademark in a way that violates the trademark owner’s rights. This can include using the same or a similar business name, logo, slogan, or other trademark in connection with related goods or services, particularly when the use is likely to cause confusion among consumers about the source, affiliation, or sponsorship of those goods or services. In other words, if consumers start asking, “Is this the same brand/company?” you might have a problem. 

Trademark infringement may result in you or your business receiving a cease-and-desist letter demanding that you stop using the allegedly infringing mark. If the matter escalates, the trademark owner may file a trademark infringement lawsuit in federal court. Depending on the circumstances, the trademark owner may seek monetary damages, including potentially the profits attributable to the infringing goods or services, as well as an order requiring you to stop using the mark.

For a business, the consequences can extend far beyond changing a name or logo. You may be required to discontinue branded products, remove or dispose of existing inventory, and undertake a costly rebrand while navigating the disruption to your business and brand. This can significantly impact a small business in a way that may force them to shut down and start over. 

How Does a Trademark Infringement Usually Happen? 

You may think you’ve done everything right. Maybe you checked state records and even Googled your business name to make sure no other business was using it. However, a more comprehensive trademark search, including the records of the U.S. Patent and Trademark Office, may uncover potentially conflicting marks that a basic search would miss.

Simply because no competitor has the exact same business name does not necessarily mean your name is available for use or registration. Likewise, assuming that two businesses operate in unrelated industries does not automatically eliminate the possibility of a conflict. Overlooking these issues can create significant legal and financial risks for your brand and business.

Trademark infringements typically occur when: 

• You launch a business and choose a name/logo without doing a clearance search

• You assume a different industry means no conflict

• You registered a name that was confusingly similar to an existing trademark that is pending or registered; common law (state) trademarks may also pose a problem if you are not careful as well

  
  

A Notable Example of Trademark Infringement

One of the more notable trademark disputes in pop culture involved Adidas and Forever 21. Adidas has a history of protecting and enforcing its iconic three-stripe design as a trademark, and when Forever 21 began selling clothing featuring similar stripe designs, Adidas filed a lawsuit alleging trademark infringement.

Forever 21 argued, among other things, that stripes are a common design element in fashion and that consumers were unlikely to confuse its designs with Adidas’s trademarks.

The parties ultimately settled the dispute out of court. While the case did not establish that every use of stripes constitutes trademark infringement, it illustrates an important point for businesses: even seemingly common design elements can create trademark concerns when they are sufficiently associated with a particular brand.

Before adopting a logo, design, or other brand element, it is important to consider not only whether it looks different from another brand’s assets, but also whether its use could create a likelihood of consumer confusion. Careful trademark clearance can help identify potential conflicts before they become costly legal problems.

Working with a Trademark Lawyer Can Help You Avoid Potential Trademark Infringement Issues

If you just launched a business (or you’re in the process of starting a business) let’s chat today about the steps you can take now so you don’t have to worry about trademark infringements later on. Click here to set up a call with a trademark lawyer today.