FAYETTEVILLE, Ark. (AP) — When Judy Paynesmith left her job as a medical transcriptionist, she wanted to open her own business.
The goal: Help people eat better and live healthier lives for a few years until she retires.
She's operated Lean Green Cuisine at 908-D Rolling Hills Drive since February 2010, offering prepared organic, vegan food to Northwest Arkansas customers who pick it up once per week or have it delivered.
"I'm really not making any money, but I love what I'm doing," she said.
What she didn't expect was a letter from Nestle, the company that owns Lean Cuisine frozen foods. A lawyer representing Nestle contacted her in April asking if she would be willing to change the name of Lean Green Cuisine.
Paynesmith at first agreed to those terms, but now says she can't afford the thousands of dollars that would be required to enact the name change, nor can she afford a lawyer to assist her.
"They really feel threatened, but we're not a franchise," she said. "We're the only one with the name."
The owner of Lean Green Cuisine is learning a real-life lesson that many small-business owners have to deal with when opening a new venture.
"Whenever you're dealing with the same area of commerce and there are similar names, there's always going to be the risk of crossing the line," said Ned Snow, an associate professor with a specialty in copyright and trademark law at the University of Arkansas School of Law.
The likelihood a new business will cause consumer confusion with an existing brand is one issue that would be considered by a judge in a trademark infringement case, Snow said. Other factors are how long the two brands have existed and if the second brand would dilute the value of the existing brand.
It's not uncommon for small businesses to run afoul of another company's trademark. In August, Dairy Queen filed suit in federal court against Northwest Arkansas business J.J.'s Grill over the use of the term "grill-N-chill." Dairy Queen holds the trademark for the term "grill and chill."
The University of Arkansas deals each year with about a dozen companies in the state that it believes infringes on its trademark of "Razorbacks," said Brian Pracht, the university's athletic director for marketing and licensing.
"We encourage businessmen and women to do research and get some counsel before they use a similar name or logo to an organization or other business," Pracht said. "What companies want is to avoid any confusion."
The university issues licenses to about 500 companies to sell products bearing its trademarks, but takes issue with businesses using a trademark such as "Razorback" in their name.
"There's no real benefit to the university associating with various businesses," Pracht said.
Several Northwest Arkansas businesses are able to use the word "Razorback" in their names because they were established before the university trademarked the term in 1987. If a new Razorback business were to open today, the university would quickly contact the owner about a name change.
Usually that contact is enough to settle the matter without the need to go to court, Pracht said.
Of course, the best thing a new business owner can do is to avoid a name conflict before opening.
Steve Clark, Fayetteville Chamber of Commerce president, said the chamber doesn't get involved in conflicts between two businesses, such as with Lean Green Cuisine and Nestle, but that all new businesses in the community are advised to check with the secretary of state's office to make sure a name isn't reserved.
"Litigation over intellectual property can get very expensive," he said.
Snow recommends checking the federal government's list of trademarks at www.uspto.gov, and even hiring a lawyer to assist in the search.
"The safest thing is to do your homework ahead of time to avoid litigation," he said.
But with only the threat of a lawsuit hanging over her head, the owner of Lean Green Cuisine is finding herself in a situation where it would cost her thousands of dollars to change her website and signs.
"I really, truly cannot afford it," Paynesmith said.
The lawyer representing Nestle who contacted Paynesmith did not respond to an email about Lean Green Cuisine.
Paynesmith contends that her business offers a very different service from Lean Cuisine. She takes orders for vegan food through her website, leangreencuisine.com, with customers picking up the food on Mondays. She also offers delivery from Bella Vista to Fayetteville. She gets 60-70 orders every week. Most business comes from word-of-mouth, Paynesmith said.
"No one has ever called in because they were confused," she said. "It's ridiculous."