Like Mr. Murphy said, more information is needed. But I can give you some general principles from a business law standpoint:
1. At common law (case decisions) a prior user of the name has rights over your later use. So, the question is "Who used the name first?"
2. A federally registered ("trademarked") trade name or trade mark has precedence in the US against everyone except the grandfathered user but even then the grandfathered use is only for the territory where used. (over-simplified: think county of Florida vs. the rest of the US). Most sophisticated business people know to trade mark their company name (our clients at least - its your identity and you don't want to lose it) so apparently they have prior use and/or a federal registration. If so then you may have to give up the name.
3. In our firm before we even send the "cease and desist" letter we obtain federal (and state as needed) registration which means that your use of the name would violate both federal and state law. We call our letter the "Demand Letter from Hell" because if the violation is true, then the unauthorized user is "toast" (legal name for not a good outcome.)
4. Depending on the value of the name the next step would typically be a "TRO" (i.e. lawsuit with application for emergency order stopping your use of the name. Our firm requires an upfront fee of $10-$15,000 just to start or defend this proceeding because (1) all work is on emergency basis (2) first court hearing is in a week (be ready argue) and (3) final evidentiary hearing (trial) is within month or six weeks - i.e from filing to trial in six weeks or so. Total cost about $35,000.00.
5. If you have a business, and it does, say, $500,000 in sales a year, then you are stuck with defending the name. Otherwise, you lose your customer franchise and your "brand" - what you would sell. By the way, the cost for our firm for consultation and to prepare and file for trade name and negotiate through: $835.00, including fees. So, as you can see there is a high cost for not having what I call your "legal brick house" in order. This is only one of many examples.
6. This being said, they may not have the facts or law to write the "Demand Letter from Hell" and in that case we would just evaluate the case and send them a letter to "forget it." (sue if think you can win).
So, as has been said, it would be good to discuss the complete facts with an attorney - you may have a high cost or a low cost solution and we won't know which you have until we look at it. We can schedule one hour consultation if you like. (It is not free up front but it is applied to the cost of other work, so if we do anything else the consultation is free).
Good luck!!
Donald W. Hudspeth
Law Offices of Donald W. Hudspeth, P.C.
3030 North Central Avenue, Suite 604
Phoenix, Arizona 85012
Direct DWH@azbuslaw.com
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Firm TheFirm@azbuslaw.com
Ph 602.265.7997
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