My LLC just received a C&D for operating website with same name

[RoundBlock]

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

I own a Nevada LLC which operates community websites. One of our sites has been operating since April, 2011, first under me personally, then by the corp after I setup the LLC. We'll call the domain name "southwesthotrods.com".

An Arizona company by the name of "Southwest Hotrods, Inc" just sent me a C&D letter, stating I'll be facing legal action for using the name "Southwest Hotrods", and Arizona Trade Name. It appears they incorporated in February, 2011. I did not find a record of a trademark in the TESS lookup.

They sell hotrods, we operate a website for southwest hotrod owners and do not sell hot rods.

How does this play out? What can I do to avoid this in the future, with other websites of ours?

 

[quincy]

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

I own a Nevada LLC which operates community websites. One of our sites has been operating since April, 2011, first under me personally, then by the corp after I setup the LLC. We'll call the domain name "southwesthotrods.com".

An Arizona company by the name of "Arizona Hotrods, Inc" just sent me a C&D letter, stating I'll be facing legal action for using the name "Arizona Hotrods", and Arizona Trade Name. It appears they incorporated in February, 2011. I did not find a record of a trademark in the TESS lookup.

How does this play out? What can I do to avoid this in the future, with other websites of ours?

Are you using their "Arizona Hotrods" trademark, or are you using "Southwest Hotrods?"

A trademark does not have to be registered to be offered protection under trademark law. In the U.S., the first to use the name in commerce is the presumed owner of the mark.

It is possible that "Arizona Hotrods" is not federally registered but registered with the state, by the way. A USPTO search will not show state-only registrations.

Finally, I can assume you are both in the same business, doing something with hotrods, but how similar are your businesses? Do you both have the same consumer market? Do either or both of you operate outside the state of Arizona?

 

[RoundBlock]

Are you using their "Arizona Hotrods" trademark, or are you using "Southwest Hotrods?"

A trademark does not have to be registered to be offered protection under trademark law. In the U.S., the first to use the name in commerce is the presumed owner of the mark.

It is possible that "Arizona Hotrods" is not federally registered but registered with the state, by the way. A USPTO search will not show state-only registrations.

Finally, I can assume you are both in the same business, doing something with hotrods, but how similar are your businesses? Do you both have the same consumer market? Do either or both of you operate outside the state of Arizona?

Sorry about that, I edited the original post (should have been Southwest Hotrods rather than Arizona Hotrods). We're using southwesthotrods.com and they're Southwest Hotrods Inc.

I wasn't aware that you could register a trademark with individual states. How would a company such as ours, who operates a website in all 50 states, protect ourselves?

Also added to the first post, they build and sell hotrods, we run a website for hotrod enthusiasts of the Southwest. We have no physical presence in Arizona, and we're incorporated in Nevada.

 

[quincy]

Sorry about that, I edited the original post (should have been Southwest Hotrods rather than Arizona Hotrods). We're using southwesthotrods.com and they're Southwest Hotrods Inc.

I wasn't aware that you could register a trademark with individual states. How would a company such as ours, who operates a website in all 50 states, protect ourselves?

Also added to the first post, they build and sell hotrods, we run a website for hotrod enthusiasts of the Southwest. We have no physical presence in Arizona, and we're incorporated in Nevada.

Does Southwest Hotrods, Inc., also have an internet presence, advertising and selling their hotrods nationwide?

The best way to protect any company trademark is to start with a distinctive name that is unlike all others and, once used in commerce in connection with the business, its products and its services, federally register the trademark. Federal registration puts the country on notice that the name is in active use and should not be infringed.

"Weak" marks as opposed to distinctive marks are offered little protection under trademark law, unless or until they become connected in consumers' minds with the specific product or service being offered.

Weak marks include using family names (e.g., McDonald's Appliances), and the geographic origins of a product or service (e.g., Arizona Sodas), and describing the product or service (e.g., Quick Oil Changes). It can take time for a weak mark to become strong enough to be allowed federal registration (like the McDonald's fast food chain, Arizona Iced Tea, Jiffy Lube). Southwest Hotrods would be considered a weak mark to begin with and would probably not qualify for placement on the federal trademark Principal Register.

 

[RoundBlock]

Does Southwest Hotrods, Inc., also have an internet presence, advertising and selling their hotrods nationwide?

The best way to protect any company trademark is to start with a distinctive name that is unlike all others and, once used in commerce in connection with the business, its products and its services, federally register the trademark. Federal registration puts the country on notice that the name is in active use and should not be infringed.

"Weak" marks as opposed to distinctive marks are offered little protection under trademark law, unless or until they become connected in consumers' minds with the specific product or service being offered.

Weak marks include using family names (e.g., McDonald's Appliances), and the geographic origins of a product or service (e.g., Arizona Sodas), and describing the product or service (e.g., Quick Oil Changes). It can take time for a weak mark to become strong enough to be allowed federal registration (like the McDonald's fast food chain, Arizona Iced Tea, Jiffy Lube). Southwest Hotrods would be considered a weak mark to begin with and would probably not qualify for placement on the federal trademark Principal Register.

They have a website, but they do not sell online. Local brick and mortar, as far as I can tell.

I did a national search with the USPTO, but I didn't know you could trademark a name on the state level. I've learned so much since I've started this, I won't make the same mistake twice. I would certainly consider this a 'weak' mark, I just hope the courts would agree.

 

[quincy]

They have a website, but they do not sell online. Local brick and mortar, as far as I can tell.

I did a national search with the USPTO, but I didn't know you could trademark a name on the state level. I've learned so much since I've started this, I won't make the same mistake twice. I would certainly consider this a 'weak' mark, I just hope the courts would agree.

Without a personal review of all of the facts, it is hard to say whether any claims of trademark infringement by Southwest Hotrods are valid ones or not.

Trademark holders are responsible for enforcing their own rights in their marks. If they fail to do so vigorously enough, they risk losing their rights in the mark entirely. For this reason, trademark holders tend to send out many cease and desist letters, even when the use of their mark does not infringe and an infringement lawsuit could not be supported. Cease and desist letters are a relatively cheap way for trademark holders to notify users of the rights they have in a mark and to let the users of the mark know they should stop using it.

And, if a mark holder can demonstrate consumer confusion has been or is likely to be created over another's use of the same name, and there are demonstrable profits made by the user or demonstrable losses to the TM holder, a suit might be seriously considered and pursued.

It is, as a rule, not smart to just ignore any cease and desist letter, until what led to the C&D can be reviewed.

 

[RoundBlock]

Without a personal review of all of the facts, it is hard to say whether any claims of trademark infringement by Southwest Hotrods are valid ones or not.

Trademark holders are responsible for enforcing their own rights in their marks. If they fail to do so vigorously enough, they risk losing their rights in the mark entirely. For this reason, trademark holders tend to send out many cease and desist letters, even when the use of their mark does not infringe and an infringement lawsuit could not be supported. Cease and desist letters are a relatively cheap way for trademark holders to notify users of the rights they have in a mark and to let the users of the mark know they should stop using it.

And, if a mark holder can demonstrate consumer confusion has been or is likely to be created over another's use of the same name, and there are demonstrable profits made by the user or demonstrable losses to the TM holder, a suit might be seriously considered and pursued.

It is, as a rule, not smart to just ignore any cease and desist letter, until a review of what led to the C&D can be reviewed.

Very good to know, I appreciate all the information. This is all very helpful. I'll certainly be consulting an attorney as soon as possible (likely tomorrow).

 

[quincy]

Very good to know, I appreciate all the information. This is all very helpful. I'll certainly be consulting an attorney as soon as possible (likely tomorrow).

Having an attorney in your area look over the cease and desist letter you received can better help you decide what to do next. Good luck.

 

[RoundBlock]

Would it be better to get an attorney local to me, or an attorney in Nevada, where the LLC was formed?

 

[quincy]

Would it be better to get an attorney local to me, or an attorney in Nevada, where the LLC was formed?

An IP attorney local to you is fine.