Is there trademark infringement when my company name (phrase) uses a trademarked word? I received a Cease and Desist letter.

First of all, you shouldn't post specific details and confidential information on this site - it's public, and you can't assume that the other party or their lawyer won't see this.

You also don't seem to understand that what this TX company is arguing is that your use of a name that includes their mark, "(Company name Removed by Avvo)" can confuse consumers because your company also provides computer-related services, and uses don't need to be exactly identical to be infringing, they only need to cause confusion or the the possibility of confusion.

If your business name includes someone else's trademark, and you're more or less in the same business, customers searching for their company might mistakenly find them, or vice versa. The USPTO considers a mark's first word more important than a 2nd word, and may find confusion where any two names contain an identical 1st work, so simply using "(Company name Removed by Avvo)" in another name, even if you add "Creative Group" may continute to not distinguish your company from their company.

You don't mention whether you've registered your business name as a trademark, but it appears that you've never consulted anyone about clearing your business name (or domain name, or trademark, etc.) of any name you use or intend to use, so that's what you need to do now - hire an IP lawyer to see what uses are out there, analyze how long you've been using your name, how long it's been since the TX company registered their mark, what this cease and desist letter says, etc..

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

The below does not constitute legal advice, does not form an attorney-client relationship, and should not be relied upon to take or refrain from taking any action.

A few things of note to add to Ms. Koslyn's information:

1. Because trademark rights arise ONLY through use, the first to use a particular trademark owns the mark -- even if someone else latter begins to use the same mark and then registers the mark with the Trademark Office. So a threshold question is which of you began to use "(Company name Removed by Avvo)" first. If you, then the other company has no legal basis to stop you from using "(Company name Removed by Avvo)." It's federal registration does NOT give it any such power.

The registration does, however, give the other company the right to constrain your company from doing business beyond the geographic area where it did business at the time the other company applied for its trademark registration. In short, your trademark rights are confined to the geographic area where you have historically done business. There is a significant limitation on this rule though: Even with a federal registration in hand, a trademark owner has NO right to enforce its mark against anyone (a prior user OR a subsequent user) who uses the same or a confusingly similar mark in an area of the country where the mark owner is not doing business. For example, a furniture company that sells its goods in a few stores in California and Oregon has no right to enforce its trademarks against a furniture company that sells the same goods in one or more stores in New England.

Your own trademark attorney will have to determine who's the senior user of "(Company name Removed by Avvo)" and how to evaluate the effect of the geographic remoteness of your two companies.

2. All of the above assumes, however, that you're using "(Company name Removed by Avvo)" as a trademark and not simply as a trade name (trade name rights are different than trademark rights -- and most often are better protected under state rather than federal law). Your attorney has to make that call.

3. If you are the senior use of "(Company name Removed by Avvo)" then you should consider initiating a "cancellation proceeding" with the Trademark Trial and Appeal Board to cancel the other company's registration for "(Company name Removed by Avvo)." While I don't think your graphic design services are related to its custom software development services the other company clearly does and has likely admitted such in its cease and desist letter. Which is a definite downside when being overly aggressive in "enforcing" trademark rights.

All of which is to say that you need to speak with a trademark attorney licensed to practice in your state. Good luck. And don't post anymore information about this dispute.

Quick edit to my previous response:

"For example, a furniture company that sells its goods in a few stores in California and Oregon has no right to enforce its trademarks against a furniture company that sells the same goods UNDER THE SAME MARKS in one or more stores in New England."