A trademark can be one of the most valuable assets of a business. If you have infringed on a third party’s trademark rights, it can have a significantly negative impact on your business. It is important to understand what constitutes trademark infringement to know how to avoid it and take proactive steps to prevent it. 

What is Considered Trademark Infringement? 

Trademark infringement is the unauthorized use of a third party’s trademark in relation to your goods or services, such that there may be confusion between the source of your goods or services and those of the third party. 

For example, if a third party has rights to the mark Acme Solutions for calculators and you subsequently adopt the same mark to sell calculators, customers may be confused as to which entity they are purchasing their calculators from, since the marks are identical.

What Can You Do to Avoid Trademark Infringement? 

Taking proactive steps to avoid trademark infringement can help protect your business from costly lawsuits and negative impacts on your brand/business. There are several steps you can take including:

1. Conducting research prior to adopting a trademark
2. Understanding the basics of trademark law
3. Keeping sufficient records of your research
4. Investing in insurance
5. Registration of your trademark(s)

Do Your Homework 

Prior to adopting a new trademark, you should always conduct a search to clear the mark. A search would uncover any potentially conflicting marks that are already in use by a third party. You can read more about different types of searches here.

If a potentially conflicting mark is discovered in a search, it can provide you with the information you need to decide how to move forward before you invest significant time and money into a new brand. It can also prevent costly litigation expenses that may be incurred if you adopt a mark that infringes on a third party’s trademark rights. Finally, it can help you avoid the time and costs of rebranding your trademark in the future.

Develop an Understanding of Basic Trademark Law 

As a business owner, it is important to develop a basic understanding of trademarks and the type of protection afforded to both registered and unregistered trademarks in the United States. 

A party can acquire trademark rights through the use and/or registration of its mark. Unregistered rights to a trademark are derived primarily from use in specific geographic areas. If you are planning to adopt a new trademark on the West Coast and a third party has already been using the same trademark in that area for the same goods or services, you may be infringing on their trademark rights.

If that party also owns a trademark registration for their mark, the geographic scope of their rights is expanded to cover all of the United States. 

Your exclusive right to use a trademark is limited to the goods and services you offer/sell utilizing the trademark. If you are offering calculators under the Acme Solutions mark and another party is offering air conditioning units under the same mark, there may be no infringement.

Keep In-Depth Documentation 

Keeping records of all aspects of the selection, adoption, and ongoing use of your trademark can be key to avoiding trademark infringement.

If you conducted a search prior to the adoption of your mark, and there was no indication of the third party’s use of the mark, it may help to show that you did not intentionally infringe on another party’s trademark rights. This can help to avoid costly punitive damages if you are not successful in a trademark infringement lawsuit filed against you.

You should keep records of your earliest trademark adoption and use. If you are accused of infringing a third party’s trademark rights and you are able to show that you are the earlier user of the mark, you may be able to show you did not infringe on the third party’s trademark rights. In fact, you may have a claim that the third party infringed on your trademark rights.

Keeping records of your search reports and use of the mark can be key to preventing and defending against a claim of trademark infringement. 

Invest in Insurance Against Infringement of a Trademark

Businesses may obtain insurance to protect the tangible assets of their business, however, insurance to protect intellectual property is often overlooked. Trademark litigation can be very costly, whether you are the infringed party or the infringer. High costs can often become the deciding factor on whether you are able to enforce or defend your trademark rights. Investing in insurance at the outset may avoid having to choose between two costly options that could cause irreparable harm to your business: engaging in costly litigation or rebranding to avoid costly litigation.

Consider Registering Your Own Trademark 

Registration of your trademark can help you protect your mark from trademark infringement and also provide options to enforce your rights against potential infringers. You can read more about the benefits of obtaining a trademark registration here.

Speak With a Trademark Lawyer 

If you are a business owner and seeking to adopt a new trademark and/or create policies and practices to avoid trademark infringement, speaking to an intellectual property attorney specializing in trademarks can be very helpful. 

Our attorneys are experienced in handling all types of intellectual property and trademark matters. We can help you clear a potential new trademark, help develop best practices for your team when considering the use of a new mark, and offer guidance throughout the process. Feel free to schedule a consultation with an IP attorney at our firm or give us a call at 212 520 7881.