Insureon Blog

Why Goliaths Keep Suing Davids over Trademark Infringement

29. June 2016 08:00

big fish ready to eat a small fish on a black background

Pop quiz: what do Caribou Coffee, Chanel, Zara, and Starbucks have in common?

Answer: Each of these big-name brands has sued small businesses over trademark infringement. But before you shake your fist at The Man, you might want to hear their perspective.

We talked to Tamera Bennett (@tamerabennett), the owner of the Bennett Law Office, PC and an attorney who specializes in trademark law. She's here to tell you why Goliaths bother fighting Davids over trademark infringement.

You Have to Defend Your Trademark

A trademark, says Bennett, is a brand identifier that helps consumers distinguish one product from another. She says these brand identifiers were established for consumer protection. A person knows the quality of the goods or services they buy based on the trademark.

The trademark's protection is twofold:

But that protection comes with some obligations.

“As a trademark owner, you have an obligation to police your trademark,” says Bennett. “That means if third parties are using the same or similar name or design on their product or service, you may have an obligation to try and get them to stop.”

She says if you don’t take steps to protect your brand, you weaken it and the value of your trademark, which can make it difficult to defend.

“Maybe it’s not the first guy who is the problem. By the fifth or the tenth person, potential infringers could argue you’ve done nothing to stop anybody else, so why do you think you can stop me?” Bennett says.

According to Bennett, this explains why a well-known brand – or really, any brand – makes a point of searching for businesses that “are using the same or similar name or design on their product or service.”

Key takeaway: The Goliaths don't file trademark infringement lawsuits to stomp out the little guy. They’re protecting their business and consumers, just like you would if the situation were reversed.

How to Protect Your Business from a Trademark Lawsuit

Bennett says the standard for trademark infringement is the likelihood of consumer confusion.

“What are the odds consumers are going to think the Delta brand faucet in their bathroom comes from the same company that flies airplanes?” she asks. “But let’s say it’s a company that sells insurance and a company that sells financial services. The services suddenly become a whole lot more closely related because a financial services company could also offer insurance.”

Many businesses make an effort to resolve the situation with a phone call or a letter. However, when those efforts are ignored, a trademark owner may choose to file a suit.

Take, for example the lawsuit Caribou Coffee recently filed against Blue Caribou Café in Michigan. According to the Star Tribune, attorneys for Caribou Coffee only sued after several letters asking the restaurant owners to change the name went unanswered.

But the article also says Blue Caribou Café offers all-day breakfast, a full coffee bar, homemade desserts, and dinner. Would that have been enough of a difference for a ruling in its favor?

It’s hard to say because the café owners decided to settle, saying they couldn’t afford to fight “this corporate giant.” They still have to pay their legal fees and the cost of rebranding, though.

Key takeaway: Money spent upfront can save you money in the long run.

“Talk to a trademark attorney and have them explain to you how you pick a strong brand, how you pick a brand that is not confusingly similar to another brand, and have them do a thorough trademark search,” says Bennett.

At the very least, you may want to search the free database from the US Patent and Trademark Office.

What to Do If You’re Accused of Trademark Infringement

First step: stay calm.

“A cease and desist does not mean the sky is falling,” Bennett says. “But go to a trademark lawyer to help you understand what your risks are.”

Next step: notify your General Liability Insurance carrier. General Liability often covers advertising injuries like trademark infringement. If your policy does, it may help you pay for:

Key takeaway: General Liability Insurance may save your business if you're accused of trademark infringement. Get the details in “Small Business Insurance Saves the Day in Trademark Infringement Cases.”

About Tamera H. Bennett

Tamera Bennett

Tamera H. Bennett is a wife, mom, lawyer, mediator, blogger, podcaster, and legal writer. For more than 16 years, she’s helped clients protect what they create by practicing trademark, copyright, and entertainment law in Texas and Tennessee. Texas lawyer Tamera Bennett is also a trained trademark mediator assisting both the Davids and Golaiths with alternative dispute resolution.





Advertising Injury | General Liability Insurance | Lawyers | Small Business | Small Business Risk Management | Tips for All Small Businesses

Permalink | Comments (0)
Compare insurance quotes for your business
Save money by comparing insurance quotes from multiple carriers
Can't find your profession?