No, it's not legal, it oinfringes on the team's IP rights, uless you've gotten a license from them, and your question is silent on that issue.
The test isn't whether your service business would be confused with the school, or whether you're making money. You clearly want the benefits of promotional giveaways by affiliating your business with the team.
The test is: Would consumers think that your service using the team's nickname and mascot is sponsoring or is affiliated with your business? I don't see how the answer could be anything but yes, especially if your business is targeting the team's supporters, which you obviously want to do or you wouldn't want to use the team's IP.
I'm only licensed in CA. 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.
While I would need to know more facts and details, I doubt that this would be legal. You seem to recognize that the main problem is whether there is a likelihood of confusion. But you misunderstand the phrase "likelihood of confusion." I have no doubt that your service business would not be confused with a high school. But that begs the issue. The issue is whether your use of the trademark/nickname and mascot could lead some members of your community into believing that the high school endorses your business, or that there is an official association of some kind between your business and the high school. In effect, you are trying to capitalize upon the goodwill of the high school team name and mascot for purposes of promoting your business. In addition to trademark and trade name problems, a high school (or other educational institution) has rights to publicity that prevent others from using their image and name to promote unrelated products without compensation.
Think about it this way---suppose I advertised my services as "Michael's Yankee Entertainment Law Services." Don't you think I would face a problem with the New York Yankees or its Yes network? You bet I would have a problem. Your situation is no different.
Here is the good news, however. Many high schools are more than happy to grant permission to businesses to use their names and/or mascots in exchange for minor compensation and/or recognizition of some kind. Why not seek permission and work out a deal to use the name. I help clients do this all the time---there is a good chance that the high school officials will "play ball" provided that you run a reputable business and are willing to pay or "contribute" something of value to the high school. If you want to pursue this, you should retain IP counsel to negotiate this deal on your behalf--and make sure to get it in writing!!
What you are looking to do would be defensible if there is another use of the name beyond the school mascot. For instance, a high school might be 'wolverines.' Michigan is also the wolverine state. There are dozens of companies in Michigan using the name Wolverine. But none would likely involve, for instance, selling University of Michigan football memorabilia.
Many team names are common words with lots of trademark uses beyond the team use. The other posts are correct. The issue is whether your use would make consumers think you were endorsed by, owned by or affiliated with the school. Also remember, a trademark does not need to be registered to be valid and protectable. Common law trademark rights attach immediately once someone uses a brand in commerce.
I am not as certain as my colleagues here seem to be.
I think Mr. Schaefer is hinting at the idea that the mascot may not be a protectable term. However even if it's a unique or original term its use may still be defensible.
Last October Virginia Tech sued Hokie Real Estate Inc. to prevent them using the name "Hokie" but the US District Court in WV denied a motion for preliminary injunction and HREI has filed a counterclaim to cancel the university's registration.
To win a motion for preliminary injunction you have to show likelihood of success on the merits. Apparently the court did not think VTech had demonstrated they would likely win on the merits, as they could not show any actual confusion or even likely confusion, or in fact exclusive use.
A lot depends on what the mascot is and whether other people use the mascot name. You ought to talk to a lawyer.
It could be okay depending on many more facts than you've given.
Please consult an attorney but in the meantime you can read the opinion in the VTech case to get an idea of what I'm talking about.
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