Some colleagues and myself recently started a business venture. We named the company, Smartel, LLC (located in Atlanta). We've been doing business since July 2015. We've recently received a cease and desist letter from a Smartel, Inc (located in Colorado). They claim that our national marketing campaign is affecting their business and that our name is causing confusion for their potential new customers. Smartel, Inc has been in business since 2008. They do wireless expense management services. We sell the actual wireless service for national carriers such as AT&T, Verizon, T-Mobile, and Sprint. Two different types of business, but in the same industry (wireless/mobility) We checked recently on trademark status, and it appears that Smartel, Inc just filed for a trademark six days prior to their attorneys drafting the cease and desist letter that we received.
All of our business is done through eCommerce and we have a national presence. It appears that Smartel, Inc also markets nationally for their services as well.
I'm going to preface all of this by saying that before you decide one way or the other you really should sit down with an attorney and discuss this in private, and in detail; that is the only way you'll really get the guidance and suggestions you need to make the best decision. That being said, here are some general considerations for you.
Trademark rights arise from use, not from registration. Registration carries with it quite a few benefits, so it's usually a good idea to register your mark if you can (especially if it is the name of your business). The rights that arise from use apply to the geographic area in which you use the mark. Does a nationwide ad campaign and some degree of use in a wide range of geographic markets give common law rights to every pocket of every state? Probably not, but it's possible. What it does do, however, is tend to give the first company to use the mark senior rights to the mark for nationwide use. They have those rights whether they are federally registered or not. If another company comes along almost a decade later and starts using a mark that is so similar that it might cause consumers to become confused as to which company is providing which service, or lead them to think the two are one in the same, then the second mark is likely infringing on the first.
The services provided do not have to be the same services. They simply have to be related. It would be reasonable for someone familiar with Smartel, Inc.'s wireless management service to see Smartel, LLC's wireless services to national carriers and assume that Smartel, Inc must have added a service to this closely related area. If it were wireless management service and lawn care you wouldn't tend to have the same result.
What probably happened is that Smartel, Inc never thought about getting their trademark registered until they realized someone else was using a virtually identical mark for a related service. You prompted them to do what they should have done back in 2008.
You are going to need to go over all of this with your own attorney, but the likely result is that you'll need to start looking for a new name. When you start looking for a new name you'll want to make sure that name is not already in use, and that means getting someone to do a trademark clearance for you BEFORE you start using the new name and investing in nationwide advertising.
Attorney McCollum has already provided you with a very thorough and generous response.
I'll further note that now you're on notice an actual legal dispute has arisen your company has a legal duty to initiate a "document hold" -- that is, an obligation to preserve all evidence [documents, emails, notes, etc.] that relate to any potential claim that could be brought against your company or any defense it may have against the claims.
You must immediately hire a Georgia-licensed intellectual property attorney with significant litigation experience. Do NOT discus this matter any further in public. The other side's attorneys will almost certainly read this public exchange and a court will likely deem the circumstances you've described to be admitted facts. You and your attorney need to discuss whether you should ask to remove your question. Good luck.
You received some good responses already. This scenario illustrates well the outcomes that can occur when people invest in trademarks but do not do any homework upfront. It seems pretty clear, but I offer no conclusion here of course, that you both are operating in the same sandbox so as to cause some market confusion. The big question is likely going to be whether this other mark holder can claim that they were operating within the scope of your market penetration and reputation prior to you using the trademark. In an internet age and given the nature of your industry this seems at least entirely possible right? I would do nothing before getting some specific and actionable legal advice on a best course of action.
That said, at this point you really need to have a proper clearance conducted and this is not something you are going to want to do yourself. It is very possible that neither you nor this CO competitor are clear to use the name. Know as well that merely registering your business name with a state or county agency or acquiring a domain does not convey any right to use that name in commerce as a source identifier or trademark. For example, I can presumably register my new tech start up "Boogle" with the GA secretary of state because there is no other business already doing business there under that name, but this does not mean that I would not be infringing on the Google trademark, which I would be. The onus is on you to ensure the name you choose is not a problem.
If you have never actually properly cleared your trademark, this would be your best next step because for all you know there could be someone located elsewhere but doing business in your area or who has a federal registration and prior rights. Your trademark will be one of if not the most important and valuable business assets you will have and you will ultimately spend more money in support if it than you will anywhere else (advertising, marketing, PR, branding, packaging, etc.). So you owe it to your business and yourself to make sure you handle this properly upfront and the first order of business always starts with a proper and comprehensive clearance.
Whenever you endeavor into investing in a trademark it is very important that you conduct the proper clearance due diligence upfront and before you start spending any money in support of it or submit an application to the USPTO. In the US, this means searching under both federal (USPTO) as well as common law because trademark rights stem from use in this country NOT registration. This means that acquiring a federal registration does not necessarily mean that you are not infringing on another's intellectual property. See the link below for a brief article from Fox Business News on the importance of the due diligence process and our overview guide.
I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with and know you are free to work with counsel located anywhere as you have many options available.
http://smallbusiness.m.foxbusiness.com/quickPag...
http://www.attorneyqna.com/legal-guides/ugc/the-import...
Best regards,
Frank
Natoli-Lapin, LLC
What is sometimes difficult for businesses to understand about this area of law is that the law steps in to protect consumers when confusion, deception or mistake is likely. One need not wait until consumers are actually confused, decieved or mistaken and the goods or services at issue need not be identical for confusion to be likely. You need to stop discussing this publicly and find a seasoned IP lawyer asap that can help you work this situation out before you end up in federal court. If you do end up in court, I highly recommend getting this matter to a registered mediator knowledgeable in IP disputes like this.
Trademark rights are based on the nature and extent of use, both in time and geographically. The company that wrote to you may have prior rights, however, their rights may be confined to a local geographic region. You need to have an experienced trademark attorney analyze your specific situation and the adverse party's rights to advise you on how to respond. However, take the threat seriously and choose an attorney who's background and experience you have confidence.
I suggest that you contact an experienced Trademark/IP litigation attorney who can evaluate your rights and advise you in confidence. Many IP firms, like ours, offer an initial free conference by telephone, video conference or in person if you are available locally and would be happy to speak with you. Call and speak with an experienced Trademark infringement Attorney who can assist you.
