Entrepreneur magazine’s zeal on behalf of enterprising business owners apparently has its limits.

While Web-site domain names have become a common battleground in American business, with companies shelling out hundreds of thousands of dollars to buy their own names from Web squatters, Irvine-based Entrepreneur Media has taken the name game a step further: It’s threatening legal action against anyone using the word “entrepreneur” in a Web site, even combined with other words or letters.

The company is suing Scott Smith, president and publisher of Sacramento-based Entrepreneur Illustrated, a quarterly publication containing press releases about various entrepreneurial companies that uses the domain name www.entrepreneurpr.com.

Meanwhile, Greg McLemore, founder of Pets.com, Toys.com (later sold to Santa Monica-based eToys) and most recently WebMagic and Entrepreneurs.com, has managed to fend off if only temporarily a similar suit from Entrepreneur Media, the parent of Entrepreneur magazine. But more than a dozen other small startups have agreed to change their domain names at the behest of Entrepreneur Media’s attorneys.

A popular name

The domain name entrepreneur.com was originally registered by James Borzilleri, founder of FreeClub.com. He sold the weighty moniker last year, and it’s now the online home of Entrepreneur magazine. A story in Forbes reported that he sold the name for $50,000. Mark Finkelstein, one of the Latham & Watkins attorneys representing Entrepreneur Media, said the amount is confidential.

Entrepreneur Media says it has exclusive trademark rights to the word “entrepreneur,” while the entrepreneurs say “entrepreneur” is a generic word from the dictionary and can’t be marked for exclusivity. “We have an obligation to try to protect our mark,” said Finkelstein.

Smith received a “cease and desist” letter in January 1998 from Latham & Watkins. Smith said he originally agreed to negotiate, and Entrepreneur Media President Peter Shea visited him in an effort to settle. But Smith said he later decided to stick to his guns.

Finkelstein acknowledged that the firm tried to negotiate a settlement with Smith. “We try to resolve all of them,” he said. “All he has to do is stop using the mark and we’ll drop the suit.”

But Smith says he has “zero plans to change its name. It’s not only frustrating, it’s unjust,” he said.

Thus far, he said, he’s spent not only his time but also a lot of money battling Entrepreneur Media. His company had $400,000 in revenue last year, and this year he expects to take in $3.5 million.

Smith’s Entrepreneur Illustrated is a quarterly publication that is ad-free and has no subscribers. It is distributed to various media outlets and earns revenue from its clients entrepreneurs who place their stories in the publication for a fee. Smith contends that his magazine does not compete with Entrepreneur magazine, which is a glossy, ad-filled, monthly subscriber-based magazine.

Smith suggests the reason for the lawsuit against him is that his is a relatively small firm, with only five employees and limited resources to bring to a fight. He points to fellow entrepreneur McLemore, who isn’t being sued, Smith says, because of his wealth.

Finkelstein denies the allegations. “It has nothing to do with how big they are,” he said.

McLemore’s company isn’t in direct competition with Entrepreneur magazine because it’s not a magazine, Finkelstein said. On the other hand, he believes consumers could easily confuse Smith’s publication with Entrepreneur magazine.

Trademark infringement rules

Finkelstein explains that a word can be trademarked for certain uses. For instance, if someone started a shoelace business called Entrepreneur Shoelace, Entrepreneur Media wouldn’t be able to sue and wouldn’t care because a shoelace firm doesn’t compete with a magazine.

As for “entrepreneur” being a dictionary word, Finkelstein points out that the dictionary word “apple” is trademarked by Apple Computer.

But McLemore has a few bones of his own to pick with that argument.

“Apple (the company) is not using the Apple brand name to sell apples,” McLemore said. Meaning that magazines and Web sites targeting entrepreneurs should have the right to say so in their company or domain names.

Entrepreneur Media dropped a suit against McLemore last year.

“We weren’t going to let them get away with taking a name away from me,” McLemore said. “They didn’t come up with the word (‘entrepreneur’).”

When McLemore received his “cease and desist” letter, he fired back with a letter from his attorney, Frisco, Colo.-based Carl Oppedahl, who has made a name for himself in the realm of Internet domain-name trademarks.

McLemore suggested that the reason his business wasn’t pursued was that, if a suit were filed, Entrepreneur Media’s trademark claim would be closely scrutinized.

Finkelstein says that’s not the case, and Entrepreneur Media may still file a suit against Entrepreneurs.com in the future. “We can only sue so many people at a time,” Finkelstein said.