What Are Trademark Infringement Penalties?

Trademark infringement penalties are levied when the rights of a trademark holder have been violated. Phrases, symbols, or words used to identify the business or person providing a good or service are considered trademarks. Businesses value trademarks because they can help a product stand out in a busy marketplace. When a trademark is violated, it can reduce the value of a business's brand, which often impacts their sales and reputation. The owner of a trademark can protect their rights by filing a civil lawsuit after their mark has been violated.

What Is Infringement?

Intellectual property (IP) infringement occurs when a mark is used, reproduced, or sold without the permission of the IP rights holder. Trademarks, copyrights, and patents are all materials that are protected by intellectual property laws. Laws against infringement are vital because they help IP creators prevent others from using their IP without permission.

Although there are some exceptions, proving infringement requires showing that:

  • The copyright, patent, or trademark is owned by the victim in the case.
  • The person accused of infringement had access to the intellectual property.
  • The accused infringer was able to take advantage of their access to the intellectual property to use it without the owner's permission.
  • No exceptions exist allowing unapproved use of the intellectual property.

What Are Some Common Copyright Infringement Penalties?

There are several penalties available for copyright infringement, including:

  • Damages and lost profits that can be as much as $150,000 per infringement.
  • An injunction that will stop the unauthorized use of the copyrighted material.
  • Prison time for the infringer.
  • Recovery of attorney and court fees that must be paid by the defendant.

There may be very similar penalties for cases of patent or trademark infringement. However, several factors can influence the exact penalties, including:

  • Federal and state laws related to patents and trademarks.
  • The exact nature of the infringement.
  • The level of harm experienced by the plaintiff.

What Is the Penalty for Violating a Trademark?

Depending on how extensively a trademark was violated, trademark infringement penalties can vary from case to case.

The most common penalty for trademark infringement is an injunction or cease and desist letter directing the infringer to stop using the trademarked material. It's also possible for criminal or civil penalties to result from an intentional violation of trademark law, although this is rare. The USPTO does not enforce trademarks, and unfortunately, these marks also aren't self-enforcing.

A trademark owner that wants to protect their rights must continuously monitor their mark to make sure it is not being used by third parties. If a trademark owner is not diligent about defending their intellectual property, the originality of their mark may be diluted, and they may lose exclusive rights to their mark.

When a trademark owner detects an unlawful usage of their trademark, they can respond by sending a cease and desist letter. These letters can be the first step toward negotiating an end of the unapproved usage of your trademark, which is preferable to litigation. After receiving the cease and desist letter, the infringer may agree to alter their marketing materials to avoid a lawsuit.

If you have registered your trademark with the USPTO, you can bring a civil lawsuit against the person violating your mark and request that the court grant an injunction, which is a type of court order that commands the defendant stop using your mark. Once an injunction has been ordered, the violator must either alter their trademark or stop doing business altogether.

When the owner of a registered trademark sues the person infringing on their mark, it's possible that the court may award monetary damages. These civil damages are determined based on the losses suffered by the trademark holder. When it is ruled that the violation of the trademark was intentional, the court may award damages that greatly exceed the actual amount of profits lost.

Trademark lawsuits are often very expensive, both in terms of attorney's fees and court costs. If the decision favors the plaintiff, the court may require the defendant to pay for the plaintiffs' attorney and court costs. To avoid paying these costs, most defendants will attempt to negotiate a settlement instead of going to trial.

There are also several severe criminal and civil penalties that can result from a trademark violation, particularly if the infringer was using the mark to sell counterfeit items.

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