Trademark is law that protects the consumer from confusion as to the source of goods and services in the stream of commerce. Let's take an example: there is a company out there whose official name is International Business Machines, Inc.; most of us know it as IBM. IBM is a registered trademark of International Business Machines. However, if Imogene's Business Machinery, a local mom-and-pop computer shop in Nome, Alaska, chooses to also use the IBM abbreviation, International Business Mechanics has a case for trademark infringement against Imogene; those letters are locked in as a trademark within the stream of commerce that sells business machines.

If Imogene sells a product that is similar to that being sold by another company, she MAY be okay if she doesn't use the same name AND IF the product does not have a patent protecting any part of it. Thus, if Imogene decides to sell hog's-hair brushes, she had better be certain that Fuller Brush has no patent on its hog's-hair brushes or that, if they do, her brushes are patentably distinct from any patent that protects Fuller Brushes.

You should have your lawyer take a good, hard look at your contract before you go into a competing business on your own.

THIS POST CONTAINS GENERAL INFORMATION AND IS INTENDED FOR ENTERTAINMENT PURPOSES ONLY. IT DOES NOT CONSTITUTE LEGAL ADVICE, NOR DOES IT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP. FOR LEGAL ADVICE ON YOUR PARTICULAR MATTER, CONSULT YOUR ATTORNEY.

Be careful not to confuse the protection given by each of the three commonest statutory intellectual property protection systems: patent, trademark and copyright.

Creating and marketing a product that resembles someone else's product is perhaps more likely to result in patent issues than trademark problems. However, trademark protection doesn't stop with protecting just the name being used to market a product -- it includes other aspects of the design, packaging, etc, that help a consumer identify the source of the product. A good example is the shape of the Coke bottle. That is part of the trademark.

In your case, since it sounds as though you have already had some discussions with the prospective competitor. which have gotten to the point where you were given some disclosures or other inside information after signing an NDA, I think you owe it to yourselves to take further steps. Your post is too brief and too nonspecific to give an attorney a clear idea of whether your risk is slight or serious.

I would feel a lot more comfortable about giving you a thumbs-up (or down) if you gave us six or eight paragraphs of information, rather than one. Understandably, you don't want to go far beyond a generic question on a bulletin board, but I think more information is absolutely necessary to give you a competent assessment of risk.