Legal Question in Intellectual Property in Indiana

As a Franchise Attorney I can say the following. Ultimately, the issue boils down to whether or not there is "likelihood of confusion." The fact that you are in a completely different industry - and assuming the customers of each business are also different - are strong factors in your favor. Geographic area of operations and only common law rights are also big factors in your favor. Legal precedent doesn't mean you can be sued by someone for a frivilous claim - it happens all the time. Since you've been sued, you need to defend and possibly counterclaim. Consult with a good trademark or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation

I mostly agree with the Franchise Attorney, although the ultimate issue is actually 3 issues: likelihood of confusion, registration status and PRIORITY. Your information suggests these resolve as follows:

likelihood of confusion (LOC) - unclear, more details needed. We would need to review the Polaroid factors, which come from the famous case of Polaroid Corp. v. Polaroid Elects.

Corp., 287 F.2d 492 (2nd Cir.), cert. denied, 368 U.S. 820 (1961). In the Polaroid case, the

Second Circuit listed the following factors as being determinative of the likelihood

of consumer confusion. These are commonly called the Polaroid factors, after the

case.

1. The strength of the plaintiff�s [complaining party, usually the owner of the

senior mark] mark;

2. The degree of similarity between the plaintiff�s and the defendant�s marks;

3. The proximity of the products or services covered by the marks;

4. The likelihood that the plaintiff will bridge the gap;

5. Evidence of actual confusion of consumers;

6. The defendant�s good faith in adopting the mark;

7. The quality of the defendant�s product or service; and

8. Consumer sophistication.

registration status (RS) - unknown. This is easily checked. Since the other side is confident enough to file suit, I would be surprised if they do not have a registered US Trademark, probably an incontestable one. My guess, since you did not mention registration, is that you just have a domain name registration. If the other one is "famous" (a complex legal determination) trademark dilution principles may catch you. A good litigator will be able to evaluate that.

priority of use (POU) - You, as the second adopter, have a duty to avoid any likelihood of confusion with existing marks. Strategically, in litigation, this is a crucial factor since you being second cannot stop the other party from using their similar name even if you win. However, if they win, they can stop your use and perhaps collect damages. So, the downside risk in this suit is all yours. The other side only risks spending money, and that money adds value to their mark and may even help due to the advertising value of the publicity. On the other hand, you risk spending money and losing your name and getting a reputation as a trademark thief. This imbalance allows them to be very aggressive in litigation and makes it hard to settle on a basis favorable to you.

The other company is aggressively trying to protect its trademark, service mark and/or trade name. That is what smart trademark owners who have priority do. They are doing nothing wrong.

Back to LOC. For purposes of risk evaluation, you should assume they may have evidence of actual confusion (someone writing, calling or emailing them when actually intending you instead or vice versa). That will be one of the first things a good litigator will want to determine. That would be very important to determining if there is likelihood of confusion, particularly if such misdirected communications occur with any frequency. If there is such actual confusion, your chances of winning drop dramatically.

Did you do a trademark search before adopting your mark? If no, your chance of winning decreases and your opponent's chances of getting enhanced damages increase. If yes, the other mark should have appeared, putting you on notice. That can go either way, depending on the advice you were given at the time.

Lesson to be Learned: Trademark infringement, once suit is filed, is a complex risky business with strategic considerations that only an experienced litigator is going to be adept at handling. Get expert help and get it NOW.

You need a trademark litigation specialist to analyze this as it is very fact intensive. You did not say WHERE suit was filed. That will have a bearing on who to choose for such a specialist. Call and I can refer you to a specialist in the jurisdiction where your suit is currently filed. Lawguru is not a good place to seek advice when sued, by the way, as you need advice from a litigator and you need quick defensive action, as time is your enemy until your defense is fully prepared. Lawguru is more for general questions. However, Lawguru is not bad for seeking a quick referral.