Defending the Trademark Infringement Lawsuit: Have You Prepared to Lose?

This is not the most typical advice you will see on a law firm website. Litigation is about parties coming to fight in a courtroom about who is right and who is wrong.

That said, sometimes, you need to prepare to lose.

Maybe a defendant did not know of the Plaintiff for a long time and there are consumers who have confused the parties and that evidence is apparent, or, perhaps the Defendant has ignored several cease-and-desist letters from the Plaintiff. Regardless of the circumstances, Defendants do not go into litigation preparing to fail, but defendants should go into trademark litigation knowing and understanding all paths the litigation may take – be it positive (winning) or negative) losing) or somewhere in between (settlement).

Preparing to lose in a trademark infringement lawsuit is not a common strategy or goal for defendants. Typically, defendants in such cases aim to win or settle on favorable terms. However, it’s essential to be prepared for all possible outcomes, including the possibility of losing. Here are some steps defendants can take to prepare for an unfavorable outcome in a trademark infringement lawsuit:

1. Consult with an Attorney: From the beginning of the case, it’s crucial to have an experienced trademark attorney who can assess the strength of your defense and provide legal advice. They can help you understand the potential risks and consequences of losing the case.
2. Understand the Allegations: Make sure you fully understand the trademark owner’s claims against you. This includes identifying the specific trademarks allegedly infringed, the alleged acts of infringement, and the legal arguments made by the plaintiff.
3. Evaluate Your Defense: Work closely with your attorney to develop and refine your defense strategy. This may involve gathering evidence, interviewing witnesses, and conducting legal research to support your case.
4. Financial Planning: Consider the financial implications of losing the lawsuit. Depending on the judgment or settlement terms, you may be required to pay damages, legal fees, and potentially change your business practices. Develop a financial plan to address these potential costs.
5. Insurance Coverage: If you have trademark infringement liability insurance, review your policy to understand what coverage it provides. Notify your insurance provider of the lawsuit and seek their guidance on the matter.
6. Settlement Negotiations: Throughout the litigation process, be open to settlement negotiations with the plaintiff. Settlement can be a way to mitigate damages and avoid the uncertainty of a court decision.
7. Asset Protection: Depending on the potential judgment amount, you may want to explore asset protection strategies to shield personal or business assets from seizure in the event of a loss.
8. Compliance: If you lose the case and are required to make changes to your business operations, ensure that you comply with the court’s orders promptly. Failure to do so can lead to further legal trouble.
9. Post-Loss Assessment: After the case concludes and you receive an unfavorable judgment, work with your attorney to assess the impact on your business and develop a plan for moving forward. This may include rebranding or making significant changes to your business practices.

Remember that the best strategy in a trademark infringement lawsuit is to avoid infringing on someone else’s trademark in the first place, but that is a calculation that may be complex and difficult. Consult with legal counsel, conduct thorough trademark searches, and seek permission or licensing if necessary before using any potentially infringing marks.