What Trademark Infringement Can Cost You
As a small business owner, how much risk do you have with your name, logo, and slogan? Well, it is important to ensure that you are not infringing on anyone’s trademarks. If you start your company and do not look into possible trademarks, you open yourself up to potential legal action.
Disgorgement of Profits
What costs can be associated with infringing on a trademark. One possible cost could be a disgorgement of the infringer’s profits. This means that any profit you made from using another company’s trademark can be included in what you owe the trademark owner. The idea here is that any profit you made by infringing on someone else’s trademark rightfully belongs to the trademark owner. The reasoning here is that it is very possible that the consumers bought from the infringer thinking it was actually the trademark owner. This means that the profits are rightfully the trademark owner’s.
Actual Damages
In addition to disgorgement of profits, a trademark owner may be able to recover actual damages from the infringer. These damages are economic losses that the trademark owner suffered due to the trademark infringement. Actual damages typically must be proven by the trademark owner by showing economic loss that was the result of actual confusion caused by the infringement. Economic loss may include lost profits due to consumers confusing the infringer for the trademark owner and purchasing from them instead. Another example of economic loss may be a loss of reputation due to consumers confusing the infringer for the trademark owner and the infringer had poor customer service or inferior products causing consumers to lower their opinion of the trademark owner. If a trademark owner can prove this, they may also recover actual damages for the costs of advertising they had to take to correct their public perception.
Reasonable Royalty
Alternatively, a trademark owner may recover reasonable royalties instead of actual damages. This is compensation based on the amount the infringer would have reasonably paid to the trademark owner had they paid for a license to use the trademark. The reasonable amount is typically calculated by looking at previous licenses between these two companies if they had previous licensing dealings. The other possible calculation is what would have occurred in a hypothetical negotiation between a willing trademark owner and a willing licensee.
Attorneys’ Fees and Costs
Finally, a trademark infringer may be required to pay the trademark owner’s attorneys’ costs and fees in exceptional cases. Exceptional cases are typically cases in which the infringement was malicious or deliberate. In cases where the infringer did not know that they were infringing on a trademark, they were not typically required to pay for the trademark owner’s attorneys’ fees and costs.
Avoid Infringement Lawsuits
A good way to avoid a potential lawsuit for trademark infringement is to consult an experienced attorney. At Bold City Legal, we have experience in helping small businesses with trademarks in San Diego, California as well as Jacksonville and Saint Augustine, Florida. Sign up for a consultation so we can look at your advertisements, logos, and company names and advise you on ways to ensure you are not infringing on a trademark. We can conduct a trademark search to make sure there are no trademarks that you are in danger on infringing upon. We can even assist you in filing for your own trademark registration so you are protected from other companies from using your name or logo for their profit.
Have questions about trademarks or other small business issues? Contact us today for your consultation. We are happy to assist you.
Thank you to Andrew Hunt, a law student at Florida State University for writing this article for us.
