You can expect a lawsuit for for trademark infringement based on liklihood of confusion.
An owner of a mark within a certain class is allowed to expand the range of products it offers in that class. Even if they don't make you product now, they can prevent you from using their name to confuse the public.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
Q: "Would picking "REX watersports" for a company name be too close to theirs seeing that we are both watersports related? Also, our domain would be RexWatersports.com. Too close?"
R: No attorney is permitted, or will, give you a trademark "clearance opinion" via a public forum such as this one. For that, you need to speak with your own trademark attorney in private. My gut reaction based only the facts you present is, yes, your adoption of the name would be very problematic. The general rule is NOT that the products branded with the name must be the same but, rather, that they are "related." The product lines you discuss are related. Speak with your own trademark attorney. Good luck -- and kudos for seeking guidance before adopting the name.
The above response is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.
It is not confusion of products or confusion of brand names that is the issue, it is whether some signficant portion of customers seeing the same mark on such similar products would be confused into thinking the products might come from the same source. You know the answer is likely YES.
You are not thinking smart if you are thinking of starting off a business by copying someone else's registered trademark. That is not the way to jumpstart a reputation. Since it is risky and often illegal, it's a way to kill your reputation, get sued, go bankrupt, and KILL your business. Smart is picking a distinctive name that you can protect so other startups will be wondering if they can copy your name when your business takes off. It is good you did a clearance check to find the conflicting mark and did a reality check here. Now do a common sense check and pick a different mark or, if you are committed to this copycat mark, get to an attorney for some legal advice and a review of the conflict to see if there is still a way. Perhaps the registrant does not actually have rights, although that would be rather unlikely.
However, the above general reaction is not legal advice, as for that you need to hire an attorney. You were smart to come her to ask before proceeding. Now follow the general advice and hire a good trademark attorney.
I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is at your sole risk. This is done without compensation as a free public service. I am licensed in IL, MO, TX and I am a Reg. Pat. Atty. so advice in any other jurisdiction is strictly general advice and should be confirmed with an attorney licensed in that jurisdiction.
Almost certainly too close, but I can't give you a definitive opinion. More importantly, you are making a terrible mistake. You should be asking this question to the intellectual property counsel that you hired to assist you in branding, patent clearance analysis, and otherwise laying the proper legal foundation for your business. You cannot use web-sites like this to do your own legal work. You need trademark clearance, patent clearance, and a great deal of other legal advice before you can responsibly begin to operate this company. You are in no position to handle these legal issues without experienced counsel, and no amount of research and questions on web-sites like this will change it. It is good you realize that you have questions like this, but there are probably dozens of other even more difficult issues that you need your IP lawyer to address. If you do not have an adequate budget to retain IP counsel, then with great respect, you are not ready to operate this company. If you do so without retaining legal counsel, you are setting yourself up for great financial distress and business failure. Please don't take offense at thus, but you need to hear it.
I agree with all of my colleagues here who raise great points and I'll add a few of my own:
1. If you don't want to pay a lawyer now, you surely will have to later if you pursue your desired mark, based upon the facts you present - i.e. identical or virtually identical marks.
2. Oftentimes, it helps to change the perspective on this scenario to better understand it. Put yourself (your company) in the perspective of the existing paddleboard company who will see a new flyboard company come along with the same or virtually identical mark...
3. Here are all the factors that attorneys use to analyze if marks are confusingly similar which both the paddleboard company's and your company's attorney (should you decide to hire one) will need to consider. Most important in your case is the interplay between nos. 1 and 2 - a rule that the more similar the marks are, the less similar the goods/services need to be to find a likelihood of consumer confusion.
(1) The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression.
(2) The similarity or dissimilarity and nature of the goods or services as described in an application or registration or in connection with which a prior mark is in use.
(3) The similarity or dissimilarity of established, likely-to-continue trade channels.
(4) The conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing.
(5) The fame of the prior mark (sales, advertising, length of use).
(6) The number and nature of similar marks in use on similar goods.
(7) The nature and extent of any actual confusion.
(8) The length of time during and conditions under which there has been concurrent use without evidence of actual confusion.
(9) The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark).
(10) The market interface between applicant and the owner of a prior mark:
(a) a mere “consent” to register or use.
(b) agreement provisions designed to preclude confusion, i.e. limitations on continued use of the marks by each party.
(c) assignment of mark, application, registration and good will of the related business.
(d) laches and estoppel attributable to owner of prior mark and indicative of lack of confusion.
(11) The extent to which applicant has a right to exclude others from use of its mark on its goods.
(12) The extent of potential confusion, i.e., whether de minimis or substantial.
(13) Any other established fact probative of the effect of use.
Alex Butterman is a trademark attorney with Staas & Halsey LLP (http://www.staasandhalsey.com), a Washington, D.C. IP boutique law firm. Alex is admitted to the bars of Washington, D.C., New York and New Jersey but, unless otherwise specified, the answer is intended to be general enough to apply to any U.S. state and based primarily upon his knowledge and experience with applicable federal laws. The opinions expressed are those of the author and do not necessarily reflect the views of his firm, Avvo or other attorneys. This answer is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship or obligations are established herein, although consulting an attorney to discuss your specific situation is strongly recommended. This is especially true of trademark law because TM law is so fact-specific and full of esoteric nuances and exceptions that could easily result in a critical legal error without proper advice from experienced trademark counsel.
My colleagues offered great advice here.
What you described would definitely be an issue for trademark purposes. That is, if we were representing the other company you would definitely be hearing from us.
Whenever you endeavor into investing in a trademark it is very important that you conduct the proper clearance due diligence upfront and before you submit an application to the USPTO. In the US, this means searching under both federal (USPTO) as well as common law because trademark rights stem from use in this country NOT registration. This means that acquiring a federal registration does not necessarily mean that you are not infringing on another's intellectual property. See the link below for a detailed explanation of the due diligence process.
I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with.
DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed with the law firm of Natoli-Lapin, LLC on the basis of this posting.