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How to know if you are infringing a trademark - The two things every business owner needs to know about trademarks

Every business has a trademark, and most of the problems that businesses have with trademarks is because they do not understand two principles that trademark law is based on. Some business owners tell others to stop using a trademark when they don't have the right to do so.  But more often, a business owner uses a trademark that is not available based on a misunderstanding of the law.  Two principles that I teach to help clients understand whether there is consumer confusion are : 1) Consumer confusion as the basis of trademark law, and 2) Use of a trademark in the marketplace as prerequisite to legal trademark rights.

1) Consumer confusion: the touchstone of trademark law

The first is that trademark law is designed to protect consumers.  Even though you "own" your trademark rights, the law looks at the experience of the consumer to make a decision.  Trademark law is designed to prevent consumer confusion.  When there is potential for consumer confusion, then a trademark owner can use the law to stop others from use of the trademark.  The first question of trademark law is: "are consumers likely to be confused".  The strange thing about this question from a legal standpoint is that it is not really based in facts, but in hypothetical situations.  The court is not asking if consumers are confused, but if they are likely to be confused in the future.  

What kind of consumer confusion is a problem?  When consumers are confused, or rather likely to be confused, about the SOURCE of what you sell, then we have the confusion we are looking for.  

An example case is one where a company was using PetMeds, and another company started using MedPets.  The court determined that the similarities were likely to confuse consumers as to the source of the goods sold.  Consumers are likely to think that they are dealing with the same company, or even be confused about whether they are dealing with the same company when purchasing from MedPets.

2) Trademark Rights Based on Use Not Registration

The second thing that business owners need to know is that trademarks rights are based on USE of a trademark, and not on a registration.  This is connected to and supports the first principle because consumers cannot be confused unless they already know about a trademark, and they can only know about a trademark if it is in use in the marketplace.  

If you are not using a trademark you cannot sue someone else for using it.  There is a way to reserve the rights for a limited time when you are planning to use a trademark in the future, but you do not have rights to prevent others from using it until you have used it.  If you stop using a trademark there is the chance that someone else will start using it and you will not have rights to stop them.  

A trademark registration  enhances your trademark rights in several important ways, but without actual use in the marketplace you do not have enforceable trademark rights.

Trademark Symbol: How to (legally) use ® and ™