A company’s name and its goods are important assets. But what if you learn that another company is using a similar name, or if you are threatened by another company claiming ownership of a similar name?
When a potential danger is identified, many firms promptly write a stop and desist letter or agree to halt usage of a certain mark. However, there are a variety of elements to examine when determining the credibility of a prospective trademark dispute.
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ikelihood of Perplexity
The question of whether there is a probability of confusion is central to every trademark dispute. Courts assess the likelihood of misunderstanding based on a variety of variables, but the problem boils down to similarities between the marks and similarities between the products or services. Confusion is less probable when two parties use a similar mark but on completely distinct items. The less comparable the products or services, the less similar the marks must be. The more the resemblance between the marks, the less similarity is necessary between the products or services. As a result, the first examination is nearly always whether there is a chance of consumer misunderstanding between the two marks used with their respective products or services.
The Mark’s Strength
Parties in a trademark dispute should also assess the strength of the challenged mark, as well as whether the term or phrase can even operate as a trademark. A trademark’s power is measured on a scale that ranges from imaginative to generic. When a mark does not specify or characterise the products or services associated with the mark, it is considered stronger and more unique.
Occasionally, a party would claim ownership of a descriptive or widely used term in the business. That party may have even been able to have the mark registered. However, if the mark is just descriptive or generic for the products or services provided by that party, the party is unlikely to have wide rights to the mark. Furthermore, as the markings are less recognisable, slight alterations in the marks become important.
Priority — that is, who used the mark first – is a crucial criterion in choosing whether to pursue a trademark dispute. Priority of use of a mark usually protects a possible infringement of another party’s trademark.
Assume a company possesses a trademark registration and finds another entity utilising the same mark. Even though the firm has a federal trademark registration, if the other party used their mark earlier, that party may have rights to the mark that exceed the registration owner’s. If the registration owner’s mark has been registered for less than five years, the registration may be subject to revocation by the other party due to that party’s priority.
In rare situations, if both parties used the mark without registration at the same time in distinct geographic places, both parties might wind up having rights to the mark in their respective geographic areas.
If a company has a registration or claims rights to a mark, it should always perform some preliminary due diligence to verify whether it has primacy of use of the mark before asking that another party stop using it.
The Bottom Line
When confronted with a possible trademark dispute, a company should constantly assess if there is a probability of confusion and who has primacy to the mark. Businesses might also consider hiring trademark lawyers, who may be able to analyse other factors before participating in a trademark dispute with another company.