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We sold all proprietary interest in a medical evaluation

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We sold "all proprietary interest" in a medical evaluation system called The Blankenship System. Our last name is Blankenship. We are being sued by the company that purchased this system because we were using the name Blankenship to market other items and to operate a Physical Therapy Clinic. The lawsuit claims it is a copyright, trademark, service mark or trade name infringement because the name Blankenship has "acquired secondary meaning and protection in the marketplace" to which they are entitled to enjoy exclusively. What is your legal opinion of this claim?
Submitted: 5 years ago.
Category: Business Law
Expert:  Law Pro replied 5 years ago.

Were you already operating and selling items with the name "Blakenship" attached thereto when you sold the medical system to them?

 

What if anything did the agreement state about the name "Blankenship"?

Customer: replied 5 years ago.
We had been using The Blankenship System name since early '90's. We sold this in 2002. We opened the clinic in 2006. We have a new corporation Blankenship, Inc. which we established in 2006 but it does not do business as yet (we just wanted to reserve the name for future use). We are planning to work with another company to develop some new products and want to be able to use our name on these and/or our company. Is this what you needed?
Expert:  Law Pro replied 5 years ago.

Yes. So you opened up the clinic and are proposing use or naming other products with the name after the sale. Yes, you very easily could have sold the name "Blankenship" in like or similar products.

 

If the products are similar and you in any way would be competiting agaist them or in a similar product line - I would be most likely to state you are infringing upon their purchased "trademark", etc.

 

You are really going to have to retain counsel to really look into the matter because damages in these types of situations can be extreme and the litigation very costly.

Customer: replied 5 years ago.
Clarification please - "The Blankenship System" copyright, trade name, etc. is what we conveyed. The clinic is a physical therapy clinic using our name simply to identify ourselves locally, we do not compete with the new owners in anyway at all through this business. Does this info change your thoughts, exempt our clinic name from their ownership? If we produce a new product and use a name that does not include Blankenship in it, can we do that? If we market this new item through Blankenship, Inc., is that acceptable?
Expert:  Law Pro replied 5 years ago.

What do you call the PT clinic?

 

Yes, certainly you can produce a new product that does not use the Blankenship name - unless you signed a "non-compete" agreement with the purchasers. If that is so, then it's what the agreement states.

 

Using the name "Blankenship, Inc." is certainly not a trademark infringement in and of itself. There are many companies (thousands) who use similar names.

Customer: replied 5 years ago.
Blankenship FCE/PPD Center (we perform Functional Capacity Evaluations and Impairment Ratings). Many of the insurance companies, doctors, attorneys, etc., know us by name and like our work, so we used our name for instant marketing. None of our customers are The Blankenship System customers.
Expert:  Law Pro replied 5 years ago.

You do admit that your name had instant recognition then.

 

Is that what the Blankenship System also did - functional capacity evaluations and impairment ratings?

Customer: replied 5 years ago.
Yes. But we only use it now on a local level for a different market than The Blankenship System. The clinic's customers are insurance companies, doctors, case managers, etc., buying a service. The Blankenship System sells equipment and software to hospitals, physical therapists, etc., for their use.

We have had a clinic in Macon since 1990 (had a different name originally), so we have local recognition that is totally separate from what we have worldwide with The Blankenship System. Our clinic customers don't even know what The Blankenship System is, they just know they like our work with their patients.
Expert:  Law Pro replied 5 years ago.
If you believe that they are separate products and/or services and a customer cannot be confused as between the two - your safe. However, if there could or might be any confusion as between the two companies/services/products - you will probably be liable for infringement.
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Category: Business Law
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Customer: replied 5 years ago.
OK - thank you!
Expert:  Law Pro replied 5 years ago.
You're welcome. Good luck!

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