Ex-business partner started competing company with almost identical name - what are my options?

I co-founded a marketing agency called "Spark Digital Marketing" in San Francisco 5 years ago. My partner and I had a falling out last year and he left. We didn't have a formal partnership agreement (I know, stupid mistake).

Now I just discovered he's started a new agency called "Digital Spark Marketing" in the same city, targeting the same clients. He's even reaching out to OUR existing clients, and at least one has told me they were confused and thought it was us with a rebrand.

Do I have any legal recourse? I never registered a trademark but I've been using the name for 5 years. This feels like he's deliberately trying to steal my business.

IP attorney here. Let me give you some good news: you don't need a registered trademark to have trademark rights.

In the United States, trademark rights arise from USE, not registration. This is called "common law trademark." After 5 years of continuous use in commerce, you have established strong common law trademark rights in your geographic area and industry.

The key factors courts consider in trademark infringement cases:

• Likelihood of confusion: Would consumers be confused? (Sounds like yes - one already was)
• Similarity of marks: "Spark Digital Marketing" vs "Digital Spark Marketing" - very similar
• Similarity of services: Both marketing agencies - identical
• Geographic proximity: Same city - high overlap
• Intent: Your ex-partner knew your business, which suggests intentional copying

You have a strong case. First step: send a cease and desist letter. If he doesn't comply, you can sue for trademark infringement and unfair competition.

This is textbook unfair competition. California Business and Professions Code Section 17200 (the "UCL") prohibits unfair, unlawful, and fraudulent business practices.

Your ex-partner trading on your established goodwill by using a confusingly similar name is exactly what this law was designed to prevent. The fact that he's actively reaching out to your existing clients makes it even worse - that shows intent to deceive.

Under the UCL, you can seek:

• Injunctive relief (court order forcing him to stop)
• Restitution (money paid by confused customers)
• Attorney's fees in some cases

Combined with a common law trademark claim, you have multiple legal theories to work with.

Had something similar happen to me a few years ago. Former employee started a competing agency with a name that was one word different from mine.

Had an attorney send a cease and desist letter. Cost me about $800 for the letter. The person backed down within two weeks and rebranded. Sometimes that's all it takes - the threat of litigation is expensive for both sides, and if your case is strong, the other party often folds.

If he doesn't back down after the C&D, then you need to decide if you're willing to actually litigate. That gets expensive fast.

Thank you all. This is more encouraging than I expected.

A few follow-up questions:

1. Since we were partners, does he have any claim to the name? He was there when we started the business.
2. Should I register a trademark now, or wait until this is resolved?
3. How much should I expect to spend if this goes to actual litigation?

Great questions:

1. Partner's claim to the name: This is the complicated part. Without a partnership agreement specifying IP ownership, there could be an argument that both partners had rights to the name. HOWEVER, he's not using the same name - he's using a confusingly similar name. That's different. And when a partnership dissolves, typically the continuing business retains the name rights while the departing partner cannot use a confusingly similar name to trade on the old business's goodwill.

2. Trademark registration: Yes, file now. Don't wait. Registration provides significant benefits including nationwide priority, presumption of validity, and ability to recover statutory damages. You can file based on your existing use. The pending application itself adds weight to any C&D letter.

3. Litigation costs: Trademark litigation is expensive. If it goes to trial, you're looking at $50,000-$200,000+ depending on complexity. But most cases settle before trial. A strong C&D and early mediation might resolve this for $5,000-$15,000 total.

One more thing to consider: how did the partnership end? Did your ex-partner formally withdraw? Was there any dissolution agreement or buyout?

Even without a written partnership agreement, California law implies certain terms under the Revised Uniform Partnership Act. One of those is a duty of loyalty that extends during wind-down of partnership affairs.

If he's soliciting clients that were originally partnership clients, there might also be a breach of fiduciary duty claim depending on how the separation was handled.

The partnership ended badly. He basically stopped showing up and contributing, so I told him it wasn't working. He said "fine" and walked away. No formal dissolution, no buyout. He just left. I kept running the business, kept the clients, kept the name.

That was about 14 months ago. He started his new "Digital Spark Marketing" about 3 months ago based on the LLC filing date I found.

Started the trademark application process today. Also consulting with an IP attorney this week about the C&D letter.

The 14-month gap is actually helpful for you. If he wanted to claim rights to the name, he would have done so when he left. By walking away and not asserting any claim for over a year, he essentially abandoned any rights he might have had.

Then starting a NEW company with a DIFFERENT (but similar) name shows he knew he couldn't just use your exact name. He's trying to get as close as possible without being identical. That's the behavior of someone who knows they're in a gray area.

Marketing consultant here, not a lawyer. Beyond the legal stuff, think about the practical business side too.

Reach out to your existing clients proactively. Let them know about the situation (professionally, without badmouthing). Something like "We've become aware that there's a new company with a similar name in the area. Just to be clear, we are still Spark Digital Marketing, and any communications from 'Digital Spark Marketing' are NOT from us."

This protects your client relationships and also creates documentation of actual confusion in the marketplace, which strengthens any legal claim.

UPDATE: Had my consultation with an IP attorney. She agreed I have a strong case and sent a cease and desist letter on my behalf last week.

The letter demanded that he (1) stop using "Digital Spark Marketing," (2) stop soliciting our existing clients, and (3) respond within 15 days or we'd pursue legal action.

Just got a response through his attorney. He's refusing to change the name, claiming he has "equal rights" to it as a former partner. His attorney also made a counterclaim that I owe him money from the partnership dissolution.

My attorney says the "equal rights" argument is weak given the circumstances, but the counterclaim complicates things. We may need to pursue this in court.

The counterclaim for partnership money is a common tactic - it's meant to create negotiating leverage and make you think twice about pursuing your claim. Don't be intimidated by it.

His "equal rights" argument actually supports your trademark claim in a way. If he's arguing he had equal rights to "Spark Digital Marketing," then why didn't he use that exact name? Because he knew he couldn't. So he tried to get close with "Digital Spark Marketing." That shows consciousness that he couldn't use your actual name.

Trust your attorney's judgment here. If she thinks you have a strong case, you probably do. Sometimes you have to actually file suit to get someone to take you seriously.

FINAL UPDATE: We reached a settlement!

After we filed the lawsuit and he got served, his attorney reached out about settlement discussions. We went to mediation last week. Here's the outcome:

• He has to change his business name within 60 days to something not confusingly similar
• He's prohibited from soliciting any of my existing clients for 2 years
• He acknowledged my exclusive rights to "Spark Digital Marketing" in writing
• His counterclaim for partnership money was dropped
• Each side pays their own legal fees (mine were about $12,000 total)

Not a complete victory but I'll take it. My business name is protected, my clients are safe, and I didn't have to go through a full trial.

Lessons learned: GET EVERYTHING IN WRITING. Partnership agreements, IP ownership, exit terms - all of it. Would have saved me $12k and a lot of stress.

Excellent outcome. This thread is a great case study in trademark and unfair competition issues.

Key takeaways for business owners:

• Trademark rights arise from USE, not just registration - but registration provides significant benefits
• Always have a written partnership/operating agreement that addresses IP ownership
• Cease and desist letters often work - but be prepared to follow through
• Document everything, especially evidence of customer confusion
• California's UCL (Bus. & Prof. Code 17200) provides additional protection against unfair competition