Receiving a cease and desist letter or lawsuit alleging trademark infringement can be alarming, particularly when your business depends on the accused mark. However, not every infringement claim has merit, and even legitimate concerns can often be resolved through negotiation rather than litigation. Understanding the defenses available to you and how to respond strategically helps you protect your business interests while appropriately addressing the trademark owner's concerns.
Initial Assessment of the Claim
Before responding to an infringement accusation, carefully evaluate the merits of the claim. Review the accusing party's trademark registration, if any, including the goods and services covered and the registration date. Compare your mark and use to theirs, considering whether consumers are actually likely to be confused about the source of your goods or services.
Investigate when you began using your mark and in what geographic areas. If you have priority of use, you may have defenses or even counterclaims against the accuser. Document your trademark use history including the date you first used the mark, how it has been used, and evidence of consumer recognition in your market area.
Challenging the Plaintiff's Mark
One defense strategy attacks the validity of the plaintiff's trademark rights. If their mark is generic or merely descriptive without secondary meaning, it may not deserve protection. Abandoned marks lose legal protection, and you can defend on the ground that the plaintiff stopped using their mark or failed to control its quality sufficiently to maintain trademark significance.
Prior registration by another party, fraud in obtaining registration, or functionality of the claimed mark can all defeat infringement claims. Research the plaintiff's trademark history and use patterns to identify potential validity challenges. Even if these challenges do not completely defeat the claim, they may weaken the plaintiff's position and improve your negotiating leverage.
The Fair Use Defense
Fair use defenses allow certain uses of trademarks without liability. Descriptive fair use permits using trademarked terms in their ordinary descriptive sense rather than as a trademark. If you describe your products using common words that happen to be someone's trademark, this defense may apply, provided you are not using the term as a source identifier for your own goods.
Nominative fair use allows using another's trademark to identify their products when making comparisons, offering repair services, or otherwise referring to their goods without suggesting affiliation. This defense requires that you use only as much of the mark as necessary and do nothing that suggests sponsorship or endorsement by the trademark owner.
Challenging Likelihood of Confusion
Even if the plaintiff has a valid mark, you can defeat an infringement claim by showing that confusion is unlikely. Analyze the confusion factors used by courts in your jurisdiction, looking for differences that reduce confusion risk. Differences in the marks themselves, the goods or services sold, and the channels of trade all potentially undermine confusion claims.
The sophistication of the relevant consumers affects confusion analysis. Purchasers who exercise care and attention when buying expensive or specialized products are less likely to be confused than impulse buyers of inexpensive goods. Evidence of your actual sales and marketing practices can demonstrate that your customers understand the distinction between your brand and the plaintiff's.
Prior Use and Geographic Defenses
If you used your mark before the plaintiff obtained federal registration, you may have a prior use defense. This defense typically limits your continued use to the geographic area where you had established goodwill before the plaintiff's registration. Evidence of your use including dated advertising, sales records, and customer testimony establishes the scope of your prior use rights.
The senior user defense can protect established businesses against newer competitors who obtain federal registration. Even if the plaintiff has a registration, your prior common law rights in your territory may allow continued use. However, this defense does not permit expansion into new areas; it merely protects existing use.
Responding to Cease and Desist Letters
Cease and desist letters demand that you stop using the accused mark and often threaten litigation if you do not comply. Before responding, have an attorney evaluate the claim and your options. Ignoring the letter is rarely advisable because it may prompt litigation and suggests you are not taking the matter seriously.
Your response might challenge the claim's validity, propose modifications to your use that would eliminate confusion, or offer to negotiate a coexistence agreement. If the claim lacks merit, a strong response explaining why can often resolve the matter. If the claim has some validity, early negotiation often produces better outcomes than waiting for litigation.
Coexistence and Settlement Options
Many trademark disputes resolve through coexistence agreements that allow both parties to continue using their marks under defined conditions. These agreements might limit geographic areas, specify product categories, or require disclaimers to distinguish the marks. Creative solutions can preserve your business while addressing the trademark owner's legitimate concerns.
Settlement negotiations should consider your business needs, the strength of both parties' positions, and the costs of continued dispute. Even when you have strong defenses, the expense and distraction of litigation may make settlement worthwhile. Conversely, surrendering too quickly may encourage future challenges from others.
Litigation Defense
If negotiation fails and you are sued, vigorous defense protects your business interests. Beyond the substantive defenses discussed above, procedural defenses such as lack of jurisdiction, improper venue, or statute of limitations may apply. Discovery can reveal weaknesses in the plaintiff's case and support your defenses.
Counterclaims for declaratory judgment of non-infringement, cancellation of the plaintiff's registration, or unfair competition may be available depending on the circumstances. An aggressive defense that raises credible challenges often encourages reasonable settlement even when the plaintiff initially seemed unwilling to negotiate.