Trademark infringement is a nightmare: either you face a trademark litigation in court, or settle an amicable condition with the other party.

Undeniably, today’s trademark ecosystem is evolving, organically changing, and rapidly increasing. When the number of pending trademark applications is too high, it gives you the risk of obtaining trademark infringement. 

As the rate of this legal issue tightens your market opportunities, the fight for trademark registration is all or nothing. To make your fight with a clearer goal, this article will guide you on the costs of trademark infringement and how to avoid its risks. 

What is trademark infringement? 

Trademark infringement occurs when a defendant conflicts with the sources of goods and services against the plaintiff – either in a mistaken belief or an overt intent. In other words, trademark infringement violates the exclusive rights of the owner who has the sole authority to sell, use, and market his brand. 

The Lanham Act provides that the rightful owner of the trademark has exclusive rights to use the registered trademark for “designated goods” or “designated services” listed in the application for trademark registration. It has a limited term for 10 years duration from the date of registration. 

As a general rule, when a party uses a registered trademark, then he is deemed to infringe trademark rights. 

What constitutes trademark infringement? 

The cases of trademark infringement are very subjective, depending on the case involved, whether a registered trademark or unregistered trademark. 

In registered marks 

When a defendant infringes a registered trademark, the plaintiff must provide clear and convincing records that he has established trademark registration before the assertion of the case.

The plaintiff needs to show that defendant’s infringement caused likelihood of confusion affecting, whether by mistake or deception, through selling or advertising goods or services from unauthorized reproduction, copy, or colorable imitation. 

In unregistered marks

When a defendant infringed an unregistered trademark, the plaintiff needs to provide evidence that the mark was used in commerce to designate particular goods and services. 

Here, the plaintiff needs to prove that the defendant’s use of the mark caused the “likelihood of confusion” that deceived or confused the nature or origin of a product or service. 

What is the Likelihood of Confusion? 

The issue of “likelihood confusion” is the core component of any trademark infringement claim. It takes place when consumers would mistakenly believe that the alleged infringing mark is the source of goods and services, associated with the registered mark.

Moreover, every circuit court uses a different set of rules or standards for identifying the likelihood of confusion of a trademark or a service. As a potential trademark registrant, the Lapp test is the most common standardized test to identify the likelihood of confusion. 

The Lapp Test 

The Lapp Test is a multi-factored test that uses these factors in establishing a likelihood of confusion, including: 

1. the similarity of the target market;
2. the degree of similarity between the owner’s mark and the allegedly infringing mark;
3. the evidence of actual confusion;
4. the strength of the trademark owner’s mark; 
5. the similarity of the marketing channels used;
6. the intent of alleged infringer in adopting the mark;
7. the consumer’s degree of care and types of goods involved the period that the defendant used the trademark without confusing; and
8. other factors showing that consumers would mistakenly expect that the rightful owner manufactures sources in the alleged infringer’s market.

How much can a trademark infringement cost you? 

A trademark infringement has two-fold complications affecting your business: financial costs and marketing costs.  

Marketing Costs 

Your customers are your success magnets. And your trademark establishes the streak of trust and reputation towards them. Some advantages of trademarks are getting you an exclusive right to operate, promoting a distinctive mark, and expanding your market reach.

However, when you get a trademark infringement, you will lose your customers and also decrease your sales – an expected moment to happen, when your customers knew about the source of your goods and services. 

Your trademark is your channel, the starting point of connection towards your customers. But when you are faced with trademark infringement, you’ll end what you have started.

Financial Costs

Obtaining a trademark infringement is not a joke. Aside from becoming emotionally wrecked, it also consumes your time and money that even costs your penny as expensive as 100,000 dollars in court litigation and in amicable settlements.

When a plaintiff proves the “likelihood of confusion” in a trademark litigation, he can recover damages from the profits that the defendant obtained, actual damages he suffered, and the costs of a lawsuit. 

How can you avoid trademark infringement?

Regardless of your industry, if you’re planning to establish a business, consider a unique set of brand identity that won’t overlap and infringe other registered trademarks. 

There are numerous ways to avoid trademark infringement, but here are the best and effective solutions to follow: 

Hiring a Trademark Lawyer 

A trademark lawyer will be your lifeline in cases of trademark infringement. He has the competence in bringing the suit in the court with excellent mastery in trademark litigation. Hiring a trademark lawyer will ease your burden, as he prepares and files a trademark registration application that meets all USPTO requirements – from Office Actions to related legal documents.

That’s why if you’re looking for a world-class trademark firm, Bold Patents is one-call away to provide a free trademark consultation in all your trademark needs.

Understanding the business of trademarks 

Trademark infringement is often overlooked. While some businesses are eager to maximize their profit, they tend to forget the risk of obtaining trademark infringement. As simple as understanding the nature of trademarks, how trademarks work, and the science behind the likelihood of confusion, you will have your ticket to a smooth flowing trademark registration.

Conducting Trademark Searches

Trademark searches will help you find trademarks that you could potentially infringe. There are different reliable trademark search engines available for you, whether for free and state-sponsored trademark search or a fee-based engine. 

If you want to conduct a trademark search for free, then you can access USPTO’s Trademark Electronic Search System (TESS) or the WIPO’s Global Brand Database.

You can also access paid trademark search engines, such as Corsearch, Thomson CompuMark, and TrademarkNow.

Key Takeaways 

Indeed, trademark infringement is a nightmare for all kinds of business, either the start-ups or the established ones. As an entrepreneur, the hustle of avoiding trademark infringement is one of the bolder challenges to undertake. 

Trademark infringement, in its all costs, is the violation of an owner’s exclusive rights who has the sole authority to sell, use, and market his brand. As a general rule, when a party uses a registered trademark, then he is deemed to infringe trademark rights. 

Moreover, trademark infringement can affect your business in two-folds: in the financial aspect and marketing aspects. First, you can pay as high as 100,000 dollars in court litigation and amicable settlements. Second, you can lose your brand’s reputation and your customers’ trust.

But it’s not the end of your battle yet. There are three ways to avoid trademark infringement, such as:

(1) Understanding the business of trademarks;

(2) Doing your trademark searches; and 

(3) Hiring a trademark attorney.