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HELPING
HAND
Trademark
Cease and Desist Letters
You've been in business for years. Then someone new comes into the
market with the same similar name. Now what do you do?
by Geoffrey Parnass
Trademarks identify the source of
a product or service. The strength and even validity of trademarks
improve through actions taken to protect them. It’s survival
of the fittest: Weak trademarks that are vigorously protected can
grow stronger while those that are not well enforced can wither
and eventually die away.
Many companies at one time or another receive a letter from a law
firm demanding that they cease and desist from using a specific
name or design in connection with a product, business practice or
advertisement. The company on whose behalf the letter is sent is
trying to accomplish several things. First, of course, it would
like to have the recipient of the letter conform to the demand and
stop using the trademark. A second, and generally unstated, reason
for the letter is to show later parties and even courts that the
company has vigorously enforced whatever trademark rights the company
has in the mark.
Evidence of vigorous prior enforcement can help transform a descriptive
word or phrase with little or no protection into a strong mark.
A CASE IN POINT
To illustrate this point, imagine the plight of a drapery retailer
called “Windows and Things” that has operated a few stores
in the suburbs of an American city for the past 10 years. The stores
sell draperies, window coverings and an assortment of home decorating
accessories.
One day, the owner of the stores receives a certified letter, return
receipt requested, from a downtown law firm that represents a fast-growing
chain of stores also called “Windows and Things.” The
chain store sells many of the same products sold by the local store
and is rumored to be opening a new mega-store in the mall. The letter
reads as follows:
Dear Sir or Madam:
We represent Windows and Things, LLC, a Delaware limited liability
company, which owns United States registered trademark #123456
covering the mark WINDOWS AND THINGS (the “Registered Trademark”).
A copy of the Registered Trademark is enclosed.
It has come to our attention that you are infringing the Registered
Trademark by operating a retail establishment under the name
Windows and Things. Notice is hereby given that this activity
constitutes a direct and willful infringement of the Registered
Trademark. This firm has been instructed to exercise any and
all remedies available under the law to protect our client’s
rights in the Registered Trademark, including instituting legal
proceedings for injunctive relief and monetary damages. This
firm will undertake such action unless, within 10 days of the
date of this letter, you cease and desist from infringing the
Registered Trademark.
Sincerely,
Dim & Witty LLP |
The letter has its intended effect on the owner of the store, who
is frightened and feels wronged by the demand. But the trademark
registration document enclosed with the letter looks very official
and has the seal of the U.S. Patent and Trademark Office on it.
The owner begins to calculate the cost of hiring his own lawyer
to respond to the letter. He also thinks about the impact of having
to change the name of his store. What would this do to his business?
What would he tell his customers?
The owner decides to call his attorney before capitulating. The
attorney does a little investigating, including a quick check of
the trademark on the Web site of the U.S. Patent and Trademark Office.
There, she learns that the registration covers only the specific
form of graphic presentation used by the company to render the phrase
Windows and Things. The registration doesn’t actually cover
the phrase itself, just the graphic depiction currently in use by
the chain.
The attorney calls her client and explains that the key issue in
trademark infringement is whether a consumer is likely to be confused
by the names used by competing parties. The degree of confusion
depends on the strength of the mark, the degree of similarity between
the marks, how close together the products or services are in the
marketplace and other similar issues.
The attorney also explains the following:
• The fact that the chain store obtained a federal registration
for the trademark doesn’t eliminate the rights of the local
store in the name. Trademark rights in the United States are based
on the actual use of the mark, not registration with the Patent
and Trademark Office.
• The chain store has been using the name Windows and Things
for the past three years in other cities and has adopted a national
advertising campaign through cable television and advertisements
in national magazines. The local store has been using the name for
10 years and has advertised the name through local radio and newspaper
channels. Many people in the area are familiar with the name of
the local stores and they enjoy good customer support in their market.
• The local store has a stronger right to use the name in its
area than the chain store.
• The name Windows and Things is not a very strong mark. It
probably falls under the category of “descriptive” marks;
that is, marks that describe something about the product or service.
Marks that are arbitrary and fanciful (such as “Cingular”
or “Altria”) have the strongest protection, as they are
most likely to designate a particular source of the product or service.
Marks that are “suggestive” (such as “Citibank”)
suggest something about the product or service, and these also enjoy
strong trademark protection.
But marks that merely describe the product or service are weak,
as they don’t by themselves identify the source of the product
or service. Descriptive marks can become stronger over time as they
acquire an association with a single source through advertising
and customer familiarity.
• The federal registration owned by the chain store covers
only the specific graphic depiction of the mark, not the phrase
itself. The local store uses a similar name with a different graphic
display. The distinction is important, because infringement of this
kind of trademark occurs only where the competing mark uses the
same or a very similar graphic depiction.
• The local store’s continuous use of the trademark in
the suburbs of the city gives it priority over the chain store in
that area. The chain store doesn’t have the right to force
the local store to change its name in this area. If the local store
wants to open stores in another area, it would have trouble doing
so under that name.
• Because the local store is the prior user in its area, it
may have the right to block the chain store from using the name
Windows and Things in this area. The owner discussed with his attorney
how they might take advantage of this leverage. They decided to
pursue a strategy of trying to push the chain store to the other
side of town where it wouldn’t be as much of a competitive
threat (or source of confusion).
The bottom line is that trademark rights are based on actual usage.
A small company may have rights to a trademark or trade name in
its market that are as strong or even stronger than the rights of
companies that spend a good deal of time and money on consumer advertising.
The next time a cease and desist letter arrives, look into the matter
closely. Your rights may be stronger than you think.
Editor’s Note: This article is intended to be of general help
with some of the many issues that businesses in the window coverings
industry face. It is not intended to replace the specific advice
of an attorney in a specific case.
Geoffrey Parnass is an attorney who practices with the law
firm Vandenberg & Feliu in New York. He can be contacted at
(212) 763-6820.
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