How Can You Prove Another Business Stole Your Name?
A business name is not only crucial to a company’s identity. It is also a piece of intellectual property that must be protected. This is why federal and Florida state laws make it possible to sue for infringement trademarks and service marks.
Infringement means that someone is either using your protected mark to sell their own goods or services without your consent. It also covers situations where a competitor may use a name that is similar to yours but is still “likely to cause confusion” among consumers. That said, not all cases where two businesses in the same field using similar names qualify as infringement.
Judge Rejects Initial Complaint Over Disputed “Casey Key Resort” Name
A recent decision from a federal judge in Tampa provides a useful illustration. This case involves two companies that operate resort hotels within one-half mile of one another. The plaintiff’s business is called Casey Key Resort. The defendant’s business used the name Casey Key Resorts for two distinct properties, Casey Key Resorts–Mainland and Casey Key Resorts–Beachfront.
The plaintiff sued, alleging the defendant violated the Lanham Act (federal trademark law) and Florida law prohibiting unfair competition. In an October 20 opinion, however, the judge granted the defense’s motion to dismiss the case without prejudice. This means the judge determined that the plaintiff’s complaint did not meet the necessary pleading standards but the plaintiff can refile if they can correct the defects.
So what were the defects? First, the judge said the plaintiff failed to allege sufficient facts with respect to its actual service mark. For example, the plaintiff must establish that it used the name “in commerce” before the defendant did. But here, the plaintiff’s complaint provided no detail as to when and how it started using the “Casey Key Resort” name. At a minimum, the plaintiff needs to allege enough facts that, if proven at trial, shows that it used the name before the defendant.
A second problem the judge identified was the plaintiff’s decision to also sue the individual who is the managing member of the defendant hotel, which is organized as a limited liability company (LLC). Generally speaking, you cannot sue the individual owner or member of a corporation or LLC for alleged wrongdoing by the business. That would defeat the entire purpose of limited liability.
Now there are situations where a plaintiff can “pierce the corporate veil” and hold an individual owner or member liable. Indeed, federal courts have held individuals responsible for trademark infringement when they personally directed or committed the offending acts. But again, the judge found the plaintiff’s complaint in this case devoid of any specifics beyond a general assertion that the member should be held liable for the LLC. Absent something more, the judge was required to dismiss the individual defendant.
Speak with a Florida Business Lawyer Today
Trademark infringement is a complex area of law. If you are involved in a legal dispute of this sort and need advice or representation from a qualified Sarasota business litigation attorney, contact Moran, Sanchy & Associates today to schedule a consultation.