Infringement
Infringement occurs when customers are likely to confuse your mark with another trademark having a prior right. Very often, companies don't wait for actual customers to show confusion. The law allows them to demand you cease and desist using the mark in question, merely based on the propensity for confusion to occur.
If this happens, you will most likely be forced to stop using your trademark immediately. If you have product on shelves, you may be required to recall and re-label them. All packaging, advertising and other materials bearing the infringing mark will likely have to be destroyed. For both service businesses and those with hard goods, it may be that the most damaging result of having to stop using your trademark is the loss of customers who cannot find you after a name change.
Willful Infringement
Furthermore, if you know about a prior right in a trademark that is superior to your own, and willfully continue using that trademark, then you stand to loose a lot more than giving up the mark. You may have to pay monetary damages to the other party. This usually means disgorging all your profits, except those you can prove are not due to the infringing conduct. This is an extremely difficult burden of proof for you to carry, so you may end up paying damages to the other party that over-compensate them for any acutal harm done to them. This is particularly true if the trademark you willfully infringe is a federally registered mark. In that instance, you can be required to pay treble (triple) the amount of calculable damages.
And even if the damages calcluations is not steep, as when you are a startup business with minimal sales, keep in mind that trademark litigation is more expensive than most, and fees and costs alone average $75,000 if you go all the way to trial.
