Ask HN: Help Is it worth rebranding (trademark infringement)?

I'm one of the Cofounders of a startup called Super Owl and we are busy working on an iPhone app which delivers spoken word content weekly to subscribers. We have recently been featured as part of a Next Web article about 'How Startups Choose their names' - http://thenextweb.com/insider/2011/12/03/9-startups-explain-how-they-chose-their-names/

This was a nice bit of early press for us and we were surprised but delighted to be approached. However, very soon after this article went out we received a letter from a company stating that we have "breached their trademarks". This company is another startup, yet to launch their app publicly, however they claim that they are an established business - see their first letter to us here - https://skitch.com/aishay/guy25/letter1

I e-mailed the following reply:

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"Hi ,

I haven't heard of * before - just looked at your website and it looks like a great service.

I'm slightly confused about the letter attached as you state that Super Owl breaches your trademarks - have you registered a trademark for the name 'owl', '' or 'super owl'? Obviously, if it's the latter I can appreciate your concern.

First of all to clarify Super Owl is not a streaming service for audiobooks so it's quite different from what you're doing (we are aggregating spoken word audio podcasts for download). As yet, we also are not related to anything in the book space and our future plans don't include audiobooks.

Owls and audio are what we appear to have in common and I hope we can agree to differentiate ourselves in the market through product, logo, marketing, service etc. A quick search in the iTunes store reveals several apps with the word 'owl' included and I haven't seen this as a major setback or concern.

I hope this puts your mind at ease, however do feel free to contact me if you would like to discuss anything further. You can get in touch by e-mail or give me a call directly on *.

Best of luck on your launch.

Regards,

Aisha Yusaf"

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I have now received the following letter as a reply to my e-mail - https://skitch.com/aishay/guy2a/letter2

So, here's my dilemma, do we change our name?... I don't feel like we are infringing any trademarks even though we do share the word 'owl' in both our business names. As we haven't even got a product out as yet we don't want to waste our time or money on legal fees or petty issues but rather concentrate on building, selling and promoting what we make.

The business that has been pursuing us on the trademark issue also doesn't have a product out (even though they speak as though they have) and although we can rebrand what we're doing, as it's not going to make or break our app, I am concerned that by doing so we are being bullied or coerced into doing something which is not even necessary.

At this stage no one really cares about our product and if we're lucky some people might care once its available to use and buy, so we don't have time or energy to spend on the wrong things (such as this).

Any advice, help or suggestions would be most appreciated.

Thanks :)