Maybe IP category will have a different answer... I hope

[rapid_decline]

What is the name of your state (only U.S. law)? VA

I posted a long diatribe in the business category and got answers I couldn't belive... so before totally going away, and giving up, I decided to ask the same question in the actual IP category, but from the opposite perspecitive, just for a second opinion...So, Here goes.

I want to open a new store in a neighboring city. Problem is, there is already a store there using my same name, doing the same thing (the stores used to be affiliated, before I bought this one). He has started the process of changing to a new name, but still has a valid business license in my same name, and fictious name registered with the city thats good for 4 more years using it...He has however gone to the city, and gotten a new license, and fictious name in the name of a new company through his corporation, however the old license (in the name I want to use) has not expired.

What happens if I open a store around the corner from him using the name he just "gave up"?
Can he sue me?
Can he make me move out of the city? Or do I really have "nothing to worry about...he changed names"? as the business category says...

 

[tranquility]

While you may have some rights (I'm unsure of the statute, but at common law I think it's called "passing off".), for your unregistered trademark, what are your damages? I bet the suit would be expensive to prosecute and you would probably be seeking an injunction with little in damages.

This would certainly not be a do-it-yourself thing for small claims. You would need an attorney, but it seems from your description you're not talking about a lot of money. Is it really worth it?

 

[rapid_decline]

The store has dropped an average of $12,000 an month off last years numbers for the same months. (which was historically one of the worst years ever in this industry, and, during that time period, I was having phone calls re-routed and pointed to the other store by a former partner so they are much lower than they should have been [another story]), if I were to compare it to the prior year, it would be much higher. At this point, It has essentially caused the collapse of a whole business that at one time was doing $300k a year...not a lot to the average person maybe, but it's a lot to me.

Honestly I'd be very happy if he just moved the store to another local city. At least that way he wouldn't be cutting off my customers before they get to me with a New store with my name... "Oh look honey, they got the new store they were talking about last time we were there!"

"Passing off" is what everything I have read (although I always take wikipedia definitions with a grain of salt), seems to be EXACTLY what he's doing! Neither store has, or can get a service mark due to "another store with that name" being in the state, I tryed. So, my understanding is that the store first in the city with the name, has rights to it through common law (and common sense). At least in that city.

 

[tranquility]

The store has dropped an average of $12,000 an month off last years numbers for the same months. (which was historically one of the worst years ever in this industry, and, during that time period, I was having phone calls re-routed and pointed to the other store by a former partner so they are much lower than they should have been [another story]), if I were to compare it to the prior year, it would be much higher. At this point, It has essentially caused the collapse of a whole business that at one time was doing $300k a year...not a lot to the average person maybe, but it's a lot to me.

You don't need to prove you lost money, you need to prove what the damages were to your goodwill because of the use of the mark.

Again, this is not going to be easy and will be expensive to prosecute. You cannot do it yourself.

 

[rapid_decline]

Great..., thank you for your time, and honesty. Glad to know that there is in fact something "wrong" with him doing this (knew there HAD to be, it's way to sleazy, and "just wrong" for it to be "perfectly legal" to step in and "become someone else" it's basically "business identity theft", defined...). Goes back to old addage "Justice isn't blind... it's expencive" I guess.

So, I can't afford to sue him... What if I were to go back to the old name, and post the "explanation why the change" in all it's gory detail for the world to see online under "his-stores-name.com" which I own... It would put it on him to either move, sue me, deal with me, or deal with the public hearing all about exactly how he conducts business if they web search him. Yes? At this point I it's not like it's going to hurt my business to put it out there....I'm dead anyway unless something happens quick to stop the bleed. And, It could resurrect me, if people found out whats going on...who knows.

Thoughts?... Bad Idea?

 

[quincy]

If you cannot afford to sue the company that is expanding into your area using your "old" name, then you probably cannot afford to have any suit filed against you, either. Defending against a legal action can be as costly as pursuing one (and more so, if you lose). I would not, therefore, write anything derogatory about the company online, even if you believe that everything you write can be proved true. It is very easy to stray from fact to fiction in writing, and this fiction can result in a lawsuit (for defamation, trade libel, tortious interference, unfair business practices, etc).

Your obvious best course of action is to consult with an attorney in your area and not try to handle this matter on your own. It is very possible, from what you have posted in both of your threads, that you could have a suit against the company that is worth pursuing. It is very possible, from what you have posted in both of your threads, that you could be awarded damages for any demonstrated loss of profits and good will you have suffered, and that an injunction can be issued against the company to prevent it from continued use of your mark. Even a brief consultation with an IP attorney in your area, so that the attorney can review all of the facts and pertinent documents, can determine if this is the case. It is possible that a simple cease and desist letter issued by this attorney to the other company may be enough to resolve the matter to your satisfaction.

Trademark rights can be lost if a mark is no longer used in commerce OR if there are sufficient indications that the original owner of a mark no longer intends to use the mark in commerce. Although the other company may attempt to show that the latter is the case, based on your actions to operate your company under a new and different name, generally a mark will not be considered "abandonned" until it has not been used for a continuous three year period. The original owner of the mark can (generally) prevent another from using the mark if the original owner can prove that the mark was not abandonned (and a DBA that is still in effect could be sufficient evidence of this for you).

Although you mention in your other thread that your mark is not federally registered because another company in your state is using the same name for their business and has a federal registration on the mark, both your state and the Lanham Act can still provide some protection for your mark against unfair competition. As tranquility mentioned, palming off is an intentional use of another's mark designed to confuse consumers for the purpose of commercial gain, and it may be possible to show that the company moving into your area is intentionally using your old name as a way to confuse your customers into thinking that the old name is, in fact, your old company.

There are definitely complications with your situation which need to be reviewed by an attorney before you make any leap into litigation, however. Before such a consultation with an attorney, I would not attempt to confuse the issues even more by reopening your company under its old name or by writing about the other company in a way that could lead to any action being filed against you.

Again, and to repeat what tranquility said here and cyjeff said to you in your other thread, this is not (or should not be) a do-it-yourself legal matter. The investment you make in an attorney now can prevent the costs you may need to incur for an attorney's help with a defense later, should any suit be filed against you.

Good luck.