By Nathaniel T. Martens
Has your business received a cease and desist letter demanding that you stop using your business name or the name of a specific product line because that name (at least according to the letter) infringes upon the sender’s trademark? If you have, it’s important to understand the legal basis for the letter as well as the respective rights of each party.
In general, the law defines a “trademark” as any word, name, symbol, or device used to identify a person, business, or unique product. A trademark may also be used to identify the services of a specific person or business (but is more accurately referred to as a service mark in this context). Although trademarks may be registered with the United States Patent and Trademark Office, federal registration is not necessary for a person to claim ownership of a specific mark. “Common law” marks may be claimed whenever a person uses an identifying mark in commerce within a specific geographic area. The owner of a common law trademark may even have superior rights to the owner of the same, federally registered mark when the individual claiming common law rights can show prior use in the specific geographic area. When faced with a cease and desist letter, it’s important to understand the nature of the trademark rights which the other individual or business is claiming.
A federally registered trademark owner is entitled to use, and should use, the ® symbol indicating federal registration. This designation not only signals federal registration, but also carries with it a “legal presumption of the registrant’s ownership of the mark and exclusive right to use the mark nationwide on or in connection with the goods or services listed in the registration” (see https://www.uspto.gov/trademarks/basics/register.jsp). (Also note that the commonly-seen ™ designation does not signify federal registration, but rather common law claims to the mark). Important here is the following observation: if the letter you received doesn’t designate federal registration then the sender is most likely claiming common law rights which will be much more limited in geographic scope.
Trademark law, perhaps more than any other area of the law, prompts the use of cease and desist letters, because it is generally recognized that trademark owners have an obligation to “police” their mark. This obligation arises in part from the requirements that must be met in order to make a federal or state law claim of trademark “infringement” or “dilution.” Kansas for example, like many other states, has laws mirroring federal legislation which make it unlawful to infringe, or use, another’s mark without their consent. Likewise, under the dilution statute, the owner of a “famous” mark can legally stop another person from using its mark when doing so would lessen the famous mark’s distinctiveness. Because intentional infringement or dilution will subject the infringing party to monetary damages, a cease and desist letter may later be used in litigation as evidence that the infringement was intentional from at least the date of the cease and desist.
Beyond simply providing notice of potential infringement, a cease and desist letter may also be necessary so as to preserve strong damages claims against future infringers. If the lawful owner of a mark allows one infringer a “free pass” then a subsequent infringer may be entitled to argue that the owner’s damages are not what he claims because others have used the mark as well.
This isn’t what’s going to catch your eye when presented with a cease and desist letter though. Rather, it’s the specific demands made in the letter that are most worrying to its reader. Those demands may be quite varied, but will often include demands to: destroy all allegedly infringing items or inventory; cease production of or manufacturer of products using the mark; refrain from advertising using the mark; surrender domain names; provide a written agreement that use of the mark will not continue; etc.
Determining how to respond to these demands will turn on your rights to use the mark at issue. Obviously, it would be ill-advised to give in to all demands without first evaluating the legitimacy of the claims against you or your business.
First and foremost, an attorney experienced in trademark law is in the best position to evaluate the respective rights of each party, and to determine how to respond to a cease and desist letter. Avoiding litigation is often the goal of any response, and a letter which responds to the cease and desist by properly analyzing the situation and offering measures to permit coexistence (in the event there is actual or likely infringement), is generally the first step in this direction.
Proper analysis of the situation requires a factual investigation as to who has prior use; what is the geographic area of each party; and what is the nature of the goods or services at issue. Each of these items may provide for a legal defense to a trademark infringement or dilution action. And, both parties’ awareness of such defenses may be key to an amenable solution to the problem.
Furthermore, evaluating a cease and desist letter necessarily requires a thorough review of the marks themselves. When marks are similar, but not identical, there can be no infringement when there is no “likelihood of confusion” between the respective marks. Whether there is a likelihood of confusion, however, is often a difficult question to answer. Courts look at several factors such as:
1) The strength of the mark;
2) The similarity of the marks at issue (e.g., the sound, appearance, commercial impression of the marks);
3) Similarity of the goods or services at issue;
4) Degree of care exercised by the consumer in relation to the purchases of the relevant goods or services;
5) The “infringer’s” intent
6) Or specific evidence of actual confusion.
Needless to say, there’s rarely a clear cut answer when a cease and desist letter has been sent. Your knowledge of the mark and relevant markets combined with an attorney’s knowledge of the law and understanding of its typical application will certainly provide you with the best defense to any allegations of infringement.
The general information contained in this article is not a substitute for legal advice. For assistance with legal issues related to trademarks or other intellectual property, contact Kent Meyerhoff, Dan Lawrence, Sam Foreman, or Nathaniel Martens.