I'm not sure that is entirely true. Didn't wolverine knives and wolverine boots get in a conflict ? Wolverine boots won........no more wolverine knives. I think. Please correct me if I'm wrong.
It's very situational. In general, two priciples are at work. First, the origin of the word in question. The word "General" is a common English language word and so General Mills, General Tire, General Tool, and General Insurance have nothing to fear from General Electric. Assuming it's not already taken, you could use the tang stamp "General Knife" safely. Xerox, on the other hand, is a made-up word and so Xerox corporation can control is completely. If you were to stamp your knives "Xerox Knife," you could very much expect to loose that fight.
This is why so many businesses these days try to find a nonsensical name. My favorite recenty entry is Qimonda semiconductor. From their website:
"Qi" stands for flowing or breathing energy, while the combination of the English word "key" and the Latin "mundus" is intuitively understood in the Western World as "key to the world" or as we say: "Qimonda." Our name has universal qualities and it reflects our strong global footprint in R&D and manufacturing, our worldwide customer base and our highly motivated employees who are dedicated to becoming the world's leading creative memory company.
Intuitively understood? Yeah.
Anyway, the second priciple used is that of causing confusion in the marketplace. Does your use of a name or graphical device have the potential to cause confusion in the market? Will people confuse you with the other company?
There is, for example, a company that makes shoes that goes by the tradename Benchmade. Both companies have a trademark on the same word. But, they are in completely different markets, so there is no potential for confusion and, since the word is very close to being the common English word "bench-made," neither really has a case against the other.
Many years ago, the popular musical group The Beatles (whose own name conflicts with Volkswagon's trademark, but they're in different markets), started a record label of their own. For lack of anything better, they called it Apple Records. Steve Jobs started a computer company and, for lack of anything better, he called it Apple Computer. The two have sort of agreed to disagree and be content in separate markets until recently when Apple Computer started to get into the music distribution business and then a licensing deal had to be worked out.