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The Name Game

You can shield your trade name from being ripped off by a larger company--if it's distinctive enough.

This story appears in the January 2005 issue of Entrepreneur. Subscribe »

Five years ago, a small Georgia toy company called Peaceable Planet began marketing a stuffed camel named "Niles." The next year, Ty Inc., the maker of Beanie Babies, flooded the market with stuffed camels also named "Niles." Peaceable Planet sued to protect its trademark. Last April, the 7th Circuit U.S. Court of Appeals ruled in favor of Peaceable Planet and ordered Ty to withdraw its stuffed camel.

Normally, lawsuits over trademarks involve a big company trying to fend off a copycat. But under a legal doctrine called "reverse confusion," a small company can fight back when a giant threatens to overpower it by adopting a confusingly similar trade name.

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