What happens when you file a trademark on your business name and then find out someone has been using that name? There are many answers that we are going to cover in this episode. The best advice is to get educated on all of the options and the possible outcomes so you can make the best possible decision for your business.
In this episode, we’ll cover:
- Who has rights to a name
- Petitioning to cancel a Trademark
- Consent agreements
- What is Trademark infringement
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Episode 204: Filing a Trademark – Questions Answered
Andrea: [00:00:03] Welcome to the Legalprenuer Podcast. I’m your host, Andrea Sager, founder and CEO of Legalpreneur, Inc. As a serial entrepreneur and someone that works exclusively with small business owners legally protecting their business, I’m dedicated to covering common legal issues faced by business owners, providing you with the business knowledge you need to catapult your businesses growth and showing you just how some of the world’s most elite entrepreneurs have handled these legal and business issues themselves in true attorney fashion. The information in this episode is not legal advice. This is for informational purposes only, and you should always consult with your attorney before implementing any of the information in the show. Hey there. Welcome back to another episode of The Legalpreneur podcast. We’re going to be talking about trademarks today and whether you can file if somebody’s already using the name but they don’t have the trademark. This is a question that comes up a lot, and so I want to make sure we get it covered today.
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Andrea: [00:01:57] So more specifically, let me paint the picture. You have this brand new business idea. You have the perfect name and you go and search the trademark database and on us gov and you’re like, Great, nobody has the name, it’s not registered, I can use it. And then you start searching Google social media and then you find somebody actually is using it, but they have not filed the trademark. Can we still use it or what? What can you do now? There’s a lot to unpack here, and I’m going to try to explain it as cleanly as possible. Now, ultimately, whoever is in business first has priority to the name. That means they have the rights to the name. So if somebody is already using it, they have the rights to the name. So let’s paint. Let’s paint that picture. Somebody has the rights to the name you don’t know or you don’t care. And you’re like, I’m going to go ahead and file the trademark because they haven’t done it. And I want this name. I see this all the time, actually. I’m like, Hey, you know, somebody else is using it. So it is trademark infringement. Like, Well, I’m not changing my name, so I’m just going to follow the trademark, like I told you everything I could. So if that happens and you get the trademark. What I would avoid doing is going after that other person. That had the name first for trademark infringement, because if they find out about you right now, they can petition to cancel your trademark.
Andrea: [00:03:35] Now, this can be very lengthy, very costly. And I’m talking if you’re working with an attorney, I mean, this can be 20, 30, $40,000 plus. If they want to petition to cancel and you want to fight it, whatever. So it can be very costly, but they can come and petition to cancel your trademark. However. If you have the registration for. Five plus years and you do that first renewal. They can actually no longer petition to cancel your trademark because. They only have until that first trademark renewal, which what happens between five and six years, they only have up until that time to cancel your trademark for priority. Now, if you stop using it, they can still petition to cancel. And there’s a lot of things in between there, but we’ll leave it simple at that. So remember that they have priority. They have the right to the name. However, you can still get the registration. And if they don’t petition to cancel your registration within 5 to 6 years, they can no longer petition to cancel. So they kind of lose that priority. So that’s what can happen, what is likely to happen. So that is if they petition to cancel and you battle it out, that’s kind of a worst case scenario. But what I see happen many times is maybe they find out about you, you forget that they have priority and you pursue them for trademark infringement. Whatever happens, they find out about you and they hire an attorney or they start coming after you and they’re like, Hey, we were in business first.
Andrea: [00:05:22] If that happens, most likely what will happen is their attorney, if they hire an attorney because the attorney is going to explain to them, look, we can do this, but it’s going to cost a lot of money. So the attorney will actually propose typically a consent agreement. A consent agreement essentially says, hey, we acknowledge that we both have the same or similar name selling similar goods or services. And so we actually agree that it’s not trademark infringement. We agree to let each other coexist. So essentially, you will be agreeing to both use the name in writing. So you kind of at this point, you probably already knew about them and so you’re essentially already co-existing with them. They just now know that they are co-existing with you. And it’s on paper. This is really helpful. It happens a lot. We see these all the time in trademark infringement cases because it’s the cheaper route to go. However, if it’s a bigger company, most likely they’re not going to want a consent agreement because they’re just going to bury you in attorney fees. However, I will say that we have pushed back before on a lot of these bigger companies because they’re just bullies and they. Try to go after even any remote similarity and nobody ever pushes back on them. So sometimes I’ll tell the client, Look, even if we can just push back a little bit. Maybe. Fine. So those are the typical scenarios that you’ll see if you.
Andrea: [00:06:58] File for a trademark and get the registration, but somebody else is actually using the name first. And when clients come to me with this situation, I’m like, Look, we can file and we can get the registration. However, you will not be able to pursue these people for infringement. So at that point, it’s really just being aware of the risk involved and knowing that you could get the registration, but they could come after and petition to cancel your registration. So. Just know the risk. I’m not going to say, hey, don’t go file. I mean, I tell people, look, this is trademark infringement. You’re infringing on their name. But a lot of times the conversation is also do they look like they’re a serious business owner if it’s somebody that just has an Instagram page that they haven’t posted on for a year? They had a podcast. They posted two episodes two years ago. That’s a different conversation. So it’s really a matter of. Figuring out who is this business owner? Do they look serious? Are they consistent? And making that determination of how risky are you willing to be and are you open to choosing a new name? I’ve had a million different conversations with people, so I know the responses to this can run the gamut. So make sure that you’re just being educated and you know how to make the correct decision for yourself. All right, guys, let me know if you have questions.
Andrea: [00:08:30] Here at Legalpreneur. We’re committed to providing a supportive legal community for all business owners. I know how scary the legal stuff can be. If you found this information helpful, I would be so grateful if you could share it with a fellow business owner. And quite frankly, it doesn’t cost anything to rate, review or subscribe to the show. Your support helps me reach more listeners, which allows me to support more business owners in their entrepreneurial journey. Have any questions or comments about the show? Feel free to drop me a line on Instagram, I promise. I read all of the messages and comments and if you want to be a guest on the show or know someone that would make a great guest, simply fill out our application form and a team member will reach out if we think it’s a good fit. I’ll see you in the next episode.