Discussion:
California.
Can someone let me know what my options are here...here's my situation.
We resell "name-brand" printers over the web. Today, I receive a letter from one of our manufacturer's attorneys accusing us of trademark infringement along with "bait-and-switch" tactics because some software that is used with a printer showed up on the top of our searches (on our website) before the manufacturers' printers. For instance, when a user entered "jaguar" into the search field on our website, it showed "Number8" software first and then the "jaguar" printers. The "Number8" software does not compete in any way with the "jaguar" printers and are in fact, complementary.
The printer manufacturer is based out of new york, the attorneys are in south carolina and I am in california.
We did not receive any prior notice (either oral or written) about this until today when the attorney had some papers delivered to us accusing us of trademark infringement. We made some changes immediately so that the software does not show up in the search results but they still want to sue us for monetary damages...they are a billion dollar company and we are a small startup with revenue under $3M.
Thoughts? I feel like I'm getting bullied by the big company with deep pockets....I really don't know what they intend to gain….shouldn’t the manufacturer have some common courtesy to contact us “informally” before rushing to bring the attorney’s in? We never objected to this stuff and were simply unaware of their “perceived” infringement (even though I don’t believe it really is an infringement of any type)
Thanks,
-Ed
Answer:
We did not receive any prior notice (either oral or written) about this until today when the attorney had some papers delivered to us accusing us of trademark infringement. Have they filed suit, or are they just accusing you of infringement?
shouldn’t the manufacturer have some common courtesy to contact us “informally” before rushing to bring the attorney’s in? There is no legal requirement to do so.
We never objected to this stuff and were simply unaware of their “perceived” infringement (even though I don’t believe it really is an infringement of any type) They are accusing you of infringement because (at least from the facts you've given), if a customer types in a trademark into your search engine, something that is not made or licensed by the tradermark holder pops up -- potentially "confusing" the customer over whether the software is made by the TM holder or not. This "confusion" is the basis for infringement. You don't have to use someone else's logo to infringe -- sometimes it can be much more subtle than that!
I feel like I'm getting bullied by the big company with deep pockets And you may very well be!
I really don't know what they intend to gain Two things, potentially. First, trademark law requires a TM holder to constantly "defend" his or her mark in order to retain it -- so, if a TM holder lets too much infringing activity go on for too long, they could potentially lose the right to enforce the mark.
Second, if they can scare up a few bucks by having a lawyer send a letter, why not? There are more than a couple of companys out there today that create nothing, but buy up patents from failing companies and then go around enforcing them against companys with $$$ -- kind of an IP protection racket, of sorts!
Bottom line -- if you've been served with a lawsuit, you need to see an attorney like yesterday. Second, even if you haven't been sued, just accused, you still need to see a lawyer right away -- because if you've been accused, but not sued, you may have some leverage (declaratory judgment, etc.). Either way, see a lawyer. Based on what you've written, they may have a case, but a lawyer who can review ALL of the facts may see things differently...
Answer:
Well, their attorneys sent me a letter and asking that I fix the search (which we did by dropping the fact that the items are compatible with their printers) and sign a settlement agreement....the settlement agreement calls for monetary damages....
Have they filed suit, or are they just accusing you of infringement?

There is no legal requirement to do so.

They are accusing you of infringement because (at least from the facts you've given), if a customer types in a trademark into your search engine, something that is not made or licensed by the tradermark holder pops up -- potentially "confusing" the customer over whether the software is made by the TM holder or not. This "confusion" is the basis for infringement. You don't have to use someone else's logo to infringe -- sometimes it can be much more subtle than that!
And you may very well be!

Two things, potentially. First, trademark law requires a TM holder to constantly "defend" his or her mark in order to retain it -- so, if a TM holder lets too much infringing activity go on for too long, they could potentially lose the right to enforce the mark.
Second, if they can scare up a few bucks by having a lawyer send a letter, why not? There are more than a couple of companys out there today that create nothing, but buy up patents from failing companies and then go around enforcing them against companys with $$$ -- kind of an IP protection racket, of sorts!
Bottom line -- if you've been served with a lawsuit, you need to see an attorney like yesterday. Second, even if you haven't been sued, just accused, you still need to see a lawyer right away -- because if you've been accused, but not sued, you may have some leverage (declaratory judgment, etc.). Either way, see a lawyer. Based on what you've written, they may have a case, but a lawyer who can review ALL of the facts may see things differently...
Answer:
I guess then you have three choices:
1. Fix your system (which you've done) and pay the money, and be done with it;
2. Ignore it, and hope it goes away;
3. Talk to a lawyer and try and figure out what the best course of action is based on ALL of the facts of the situtation.
If the amount of money they are asking for is relatively small (like less than the couple of grand a lawyer might charge to get involved), then it may be worth it just to pay it and be done with it -- although you still may want a lawyer to look over the settlement agreement to make sure it is fair, and doesn't open you up to any future liability.
If there is more money involved, then go talk with a lawyer -- he or she may still tell you to pay them off, but at least you will have some idea as to what your potential exposure is.
I wouldn't recommend 2, but it's up to you...