If you have gone through the effort of undertaking a United States Patent Trade Office (USPTO) filing, confirmed your company holds the registration to a mark, say “XYZ Performance”, documented its use, and you sell a commercial product or service retail or via Amazon.com, you deserve protection.
Trade Name Infringement
In a recent case presented to our office, a fitness trainer out of Texas created a webpage promoting “X Training Systems” which offers virtual one-on-one fitness coaching. He then began selling “X Supplements” via Facebook. His website and his Instagram pages are extremely similar to a client of ours.
In our review of the facts, our client has a good case in terms of liability; his goal being to shut down the competitor rather than trying to win damages unless he can actually prove damages.
The first step in the analysis is whether there is infringement. A federal court would apply the DuPont factors (named after the DuPont company) to decide the outcome. Both entities operate in the nutritional supplements space, which is within Class 44 of the USPTO manual. The likelihood of customer confusion is VERY high as the websites are extremely similar (it may be that both came from the same third-party template, like Wix or Square Space), and it may be that his competitor actually tried to copy our client. The typical customer probably makes their purchase decision after occupying the same social space – websites and lifestyle choices in line with pursuing fitness goals – and likely purchases online where the similar presentation is troubling. That said, our client’s company has about 700 followers on Facebook and the offender only has about 100, so we are not likely worried about thousands of mistaken purchases (which deflates any damages claim worth pursuing).
Our client’s LLC can document its first use in mid-2017 while the offender’s first use is about 1.5 years later. Our client made it onto Amazon which is a huge step in legitimizing his brand.
We searched the design sub-codes on the USPTO website and could not turn up X Supplements, only X, so I am concluding that X Supplements has not registered their trademark (not surprising). Our client’s LLC, therefore, should have the right to exclude this offender from the nutritional supplement market space.
The rest of the infringement analysis is mostly whether the two competing companies exist in the same geographic space. Despite our client operating out of Jersey City, NJ, his competitor operates out of Texas, both sell on the internet with very similar company names, URLs, and social media presences.
Everyday persons can get confused. Being primarily internet-based companies, this factor goes to our client’s company’s favor.
The next step is evaluating the remedies. Unless there is proof of loss of revenue which can be proven to have gone to X Supplements in TX, our claim for damages will be low. As I stated, the main goal should be shutting down the TX entity in the short term to prevent that damage, both because the claim becomes stronger and because it best serves our client’s goals. A cease and desist letter was issued as soon as possible in order to document the infringement.
The last step will be filing legal action in federal court as the infringement is outside NJ as it’s primarily internet-based. There might be other things we can do, such as sending Facebook, Twitter, YouTube and Instagram notices that they are potentially supporting this infringement. We can word this in a way that implies liability on their part, which might not scare them per se, but would almost certainly result in their very prompt suspension/investigation of the competitor’s pages or hocking his wares.
To discuss your NJ Business Law matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq., of Hanlon Niemann & Wright, a Freehold Township, Monmouth County NJ Business Law Attorney