Trademarks are phrases, symbols, or keywords used to identify a company or individual who provides goods or services. Trademarks are valuable to businesses because they can make a product stand out in a crowded market. When the trademark is infringed, it lowers the value of a company’s brand’s value and damages sales and reputation. After their trademark violation, the trademark proprietor can file a civil case to safeguard rights.

What is an infringement, and how does it happen?

Infringement of intellectual property (IP) happens when a trademark is used, reproduced, or sold without the proprietor’s authorization of the IP rights. Intellectual property laws protect trademarks, copyrights, and patents, among other things. Infringement laws are essential because they assist IP creators in preventing others from utilizing their work without permission.

Despite several exclusions, claiming infringement necessitates demonstrating that:

  • The victim, in these cases, owns the copyright, patent, or trademark, and the intellectual property was accessible to the person accused of infringement.
  • The accused infringer exploited the intellectual property without the proprietor’s authorization because of their access to it.
  • There are no exceptions that allow for unauthorized intellectual property use.

What are the consequences of infringement?

Trademark infringement varies depending on the extent to which a trademark has been violated. The legitimate notice is sent to the infringer to stop using the trademarked product or service with the most typical penalty for trademark infringement. The intentional breach of trademark law can also result in criminal or civil sanctions, albeit uncommon. The United States Patent and Trademark Office does not enforce trademarks, and these marks are not self-enforcing either. If trademark proprietor wishes to safeguard their rights, they must constantly watch their mark to ensure that others are not using it. If trademark proprietor fails to protect their intellectual property, their mark’s originality may be eroded, and they may lose exclusive rights of their mark. When trademark proprietor notices an unauthorized use of their mark, they can issue the cease and desist notice. These notices can be the first step toward negotiating an end to your trademark’s unapproved use, which is going to court. The infringer may agree to change their brand name after receiving the cease and desist notice to avoid a lawsuit.

Suppose the proprietor has a registered trademark. In that matter, the proprietor can file a civil suit against the person infringing on your mark and ask the court to issue an injunction, a form of the court order that tells the defendant to stop using your mark. Once an injunction is issued, the violation must either change its trademark or cease operations entirely. When registered trademark proprietor sues the person infringes on their mark, the court may award monetary damages. The amount for civil damages and further calculation is based on the losses incurred by the trademark owner. The court may award damages that may exceed the actual amount of profits lost if it is determined that the trademark violation was deliberate. In terms of attorney’s fees and court costs, trademark lawsuits are frequently highly costly. If the court rules favour the plaintiff, the defendant may be ordered to pay the plaintiff’s attorney and court expenses. Instead of going to trial, most defendants will try to reach a settlement to avoid incurring these costs. The trademark violation can also result in serious criminal and civil consequences, especially if the infringer was selling counterfeit goods under the mark. Further, damages under Section 35(c) of the Lanham Act can be claimed for the Use of Counterfeit Marks.

The Lanham Act provide monetary damages under the following situations:

  • Infringement of a trademark;
  • Inequitable competition; and
  • Dilution on purpose.

The following are examples of monetary damages that were awarded under this Act:

  • Profits made by the defendant as a result of the infraction;
  • Damages suffered by the plaintiff as a result of the infringement; and
  • In exceptional circumstances, the plaintiff’s legal fees.

Case Study:

Recently, Facebook announced the rebranding of Facebook Company to Meta last week. While this may have come as a surprise to some people, it has also impacted a few businesses with a similar name. Meta Company has filed a lawsuit against Facebook for allegedly stealing its reputation and “livelihood” through this rebranding. The remark was made by Meta Company CEO Nate Skulic, who said that Facebook had attempted to procure the brand name from them in the past three months but had been turned down for various reasons. Initially, the offer was too low, and it would not have covered the cost of the losses the company would have suffered due to the rebranding. Furthermore, they were interested in learning about the client’s intentions. At the time, Facebook was adamant about not disclosing the information.

Nate Skulic claimed that after Facebook failed to buy them, they planned to “bury” the company through the media. In an unusual turn of events, Meta Company, a Chicago-based software startup, sued Facebook for alleging that the social network stole its name and “livelihood” after it was named Meta. Skulic, the founder of Meta Company, claimed that after Facebook failed to buy them, they planned to “bury” the company through the media.

In a public letter dated October 28, Skulic stated, “Facebook decided to conduct trademark infringement and brand themselves, Meta“. “Facebook couldn’t buy Meta, so they used the media to bury. These measures should come as no surprise from a firm that consistently says one thing and does another,” Skulic went on to argue. Meta Company has decided to pursue legal action against Facebook. Further, “this communication could be interpreted as a public cease-and-desist,” Skulic explained. “Not only to Meta but to all of humanity, Facebook and its operating officers are deceptive and behaving in bad faith.” Faced with mounting scrutiny over user data privacy, Facebook founder Mark Zuckerberg announced last month that Meta would be renamed. Zuckerberg, predictably, downplayed the fact that this rebranding, the first in Facebook’s 17-year history, is intended to deflect an onslaught of negative press.

Moreover, Zuckerberg said that the name “Facebook” doesn’t fully encapsulate what the firm does now and is still tightly associated with a single product. “However, I hope we become known as a metaverse company over time.” Facebook attorneys have been hounding Skulic “to sell our name to them” for the past three months, according to Skulic. “Meta turned down their offer on several grounds. The modest price wouldn’t cover the costs of changing our name. Meta insisted on disclosing the client and their intentions, which was denied“. At least two law firms were involved: one in the United States that needed the trademark and domain name and another in Europe aggressively contacted to “sell domain registration“.

Meta trademark was issued in 2016, with the registrant owner based in Chicago, Illinois. However, the Chan Zuckerberg initiative is recognized as the proprietor of a 2015 trademark for Meta. “It’s sad to have worked for a firm so mired in controversy and obsessed with dominance. We want to set ourselves apart from Facebook’s authoritarian future vision. We hope that the unfavourable link with Facebook and its creator will fade away, but we will not overlook the harm that has been done” Skulic went on to say more. It will be interesting to see how things unfold in future.

Exciting update: Meta PC has the ‘Meta‘ trademark for most general tech categories, but the company founders are willing to sell it to Facebook for $20 million. On Twitter, the PC manufacturers are also having a good time with the situation. “To represent who we are and what we aim to create, we are happy to announce that we are now ‘Facebook,” the memes are making fun of Facebook’s rebranding as a result of their ambitions in the AR/VR arena. 

While it’s all fun and games right now, Facebook faces an uphill struggle because other companies have already used the “Meta” moniker. In addition, the corporation will almost certainly face a slew of litigation in the future years as smaller businesses scramble for a piece of the Facebook money pie.

Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.

Author

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    Abhishek is an intellectual property Attorney. He specializes in the registration and maintenance of patents, designs, trademarks, and copyrights. He regularly assists companies in relation to crucial technology issues. He also helps organizations or individuals to develop patent portfolio management strategies for exciting new inventions and processes. Abhishek has past work experience with reputed firms like SaiKrishna and Associates Advocates, L.S. Davar and Co., Masilamani Law Partners, and Ripple IP Services (NCR).