A federal law known as the Lanham Act is often used for a variety of unfair competition claims brought by competitors, including infringement of unregistered trademarks. (At the state law level, most states have some version of a Deceptive Trade Practices Act that also prohibits unfair competition.) You should never assume that a cursory search of exact matches in the USPTO or Secretary of State databases can provide the all-clear to proceed with a brand idea.
While we don’t recommend leaving your trademarks unprotected, unregistered or common law trademarks are entitled to some protection. While lawsuits related to unregistered trademarks are less common, they do happen, especially where your brand is either getting confused with one of your competitors or is being marketed in the same space as a competitor with a very similar brand identity.
Because of this, any time you plan to put significant marketing dollars behind a brand name, logo, or slogan, you should first have a professional trademark search conducted. Don’t just assume that you know who all of your potential competitors are and that you know about all of their trademarks. Determining whether your brand idea is confusingly similar to an idea already being used by someone else is a complex legal question.
Making Comparisons WIth Your Competitors
The Lanham Act is also used to raise false advertising claims, especially claims that your marketing disparaged one of your competitors or their products or services. Truthful, non-deceptive, and objectively measurable comparisons with your competitors are legal, even if you identify the competitor by name or brand name*, illustrate the differences between your products or services, or provide other factual information. But you should be extremely careful when making claims that go beyond measurable facts or when taking on competitors with much larger advertising budgets than your own.
Like trademark infringement claims, false advertising claims can be brought under the Lanham Act or the Deceptive Trade Practices Act. In addition to monetary damages, your competitor could also seek a preliminary or permanent injunction (a court order that you stop the advertising campaign, either while the case is being decided or permanently) and an order requiring you to pay for and run a corrective advertising campaign.
*In case you are wondering, using a competitor’s trademark in your advertisement in these circumstances has been considered a “nominative fair use” when the competitor’s trademark is only used to the extent necessary to make the comparison. Howing, using someone else’s trademark in a way that creates consumer confusion will still lead to trademark infringement claims. Similarly, you should also be careful about copying the design or other artistic elements of your competitor’s marketing materials. Trying to make your ad look like their ad can lead to copyright infringement claims. Something as seemingly simple as copying a camera angle or distinctive video style or background image, or sequence has been found to violate copyright law.