Company executives and marketing professionals who rely on their company’s brand to sell a product or service have no shortage of business articles emphasizing the value a brand confers to the asset portfolio, without discussing much more than marketing practices or the mere necessity of registering a brand as a trademark. This article presents, in plain writing, many of the considerations trademark lawyers make when analyzing whether one brand is likely to confuse consumers with another brand, which in turn affects whether trademark may be registered, cancelled, or sued over. This article illuminates the intersection of marketing practices and the law, conveying a practical understanding of how to make a cursory assessment of whether your brand is being infringed, or potentially infringing another brand and leaving your brand at grave risk.
Trademark infringement law can be boiled down to the basic question “Is Company A’s marketing practice likely to confuse Company B’s protected trademark?” However, as with many simplistic versions of a concept, the complexity lies just beneath the surface and is far-reaching: confusion of who? How is “confusion” defined? At what point in time is confusion measured?
The “likelihood of confusion” standard, or LOC, is the bedrock legal concept in trademark infringement law. Below is a summary of trademark issues related to day-to-day business/marketing decisions. For further information, the concept of LOC is briefly discussed in theoretical terms at the end.
10 likelihood of confusion issues through a practical lens
A litany of case law scrutinizes the meaning of LOC as it exists in the Lanham Act, another name for US legislation on trademark law. As a consequence, any number of questions may need to be explored by a trademark lawyer in a potential conflict to ascertain whether a reasonably prudent buyer is confused as to an affiliation, sponsorship, connection, and/or approval between the rightful brand owner and the owner of the contested mark. Just to muddy the waters a bit, courts have held that “confusion” is a different state of mind than a mere “call to mind”, with the latter being insufficient to find LOC. In analyzing the issues to determine whether this line has been crossed, it’s helpful to break these issues down into their proper evidentiary categories.
This article discusses circumstantial evidence, although evidence of actual confusion and survey evidence cannot be ignored where available. Evidence of actual confusion weighs heavily in a LOC situation, although it is typically not available, and survey evidence deserves an entire explanation on its own and is not discussed here. Circumstantial evidence is where a majority of trademark disputes are won or lost, and ironically it is also where evidence stands to have the least clarity. Following this paragraph is a list of some of the more significant evidentiary issues considered in a LOC analysis:
How similar must two trademarks be for there to be a “likelihood of confusion”?
- Trademarks are usually compared on the bases of sight, sound, and meaning.
- Sight: For word marks, the number of letters in the whole word, the number of identically placed letters, the placement (beginning, middle, ending) of the similar letters, the English construction of the word (usual/unusual formation and/or misspelling), and whether the similar parts are dominant or weak elements of the word and for may be considered in a visual comparison of marks. For design marks, the color(s), shape(s), overall visual impression, and embedded words are all taken into account.
- Sound: vowel placement, alliteration, rhyme, and syllable count are typical factors in making an aural comparison.
- Meaning: even if two marks are completely different visually and aurally, they may still have similar concepts. For example, TORNADO VACUUM CLEANERS and CYCLONE VACUUM CLEANERS may be found to be similar because they share similar meanings.
How similar are the goods/services under the contested mark to the goods/services sold under the prior mark?
- Trademark owners have the exclusive right to use their trademark for the goods/services in the registration and for “related” goods/services. “Related” means any good/service which could be reasonably perceived by the relevant public to emanate from the same commercial source, or to be affiliated with, connected to, or sponsored by the trademark owner. While competitive goods/services are related, they need not be competitive to be related.
If the goods/services are not competitive, what’s the likelihood that prospective buyers would expect the senior user to expand into the field of the junior user?
- Even where a consumer may believe that a senior trademark holder licensed the trademark usage to a seemingly different product, the law may consider those goods services related (for example, clothing containing the name and seal of a university). This is because the trademark owner arguably suffers in reputation if an infringer sells low-quality clothing, and the infringer would unjustifiably benefit from the good name of the university when they sell that clothing. Another example draws upon a past client’s mark for video games where it was successfully argued to have rights over use for graphic novels, on the basis that graphic novels are goods within the video game producer’s natural zone of commercial expansion.
Is the prior mark used on a wide variety of goods/services?
- Where a senior trademark owner’s mark is used on a wide variety of goods/services, it can be argued that the reasonably prudent purchaser would expect that mark to continue to appear on a variety of goods/services; they understand and expect that there is a common connection between those diversified goods/services. Thus, a junior user of a similar mark may be infringing on the senior user’s mark even if the goods/services are seemingly unrelated in a vacuum.
How distinctive, strong, and/or recognizable is the earlier user’s mark?
- The more distinctive the earlier mark is, the wider the scope of protection it has. Distinctiveness is a term of art in trademark law, but in essence, a mark is more distinctive where it is a made up word (ZYNGA or DELIVEROO) or very unusual when used for a particular good/service (BLUE BELLY for furniture, for example). A mark is less distinctive where it has descriptive elements in it (SPEEDY CODER for a software development company). Where a mark is primarily descriptive or generic, it has no protection under the law.
- In certain cases, a mark becomes a “reputable” mark, and these marks have the highest scope of protection. APPLE, COCA-COLA, and BMW are considered reputable marks, as they are household names that even people who are not necessarily shopping for the items produced by these brands know of the brand itself.
- Crowded marketplace is a trademark term referring to elements which are common in a particular market, for example MISS USA, MISS WORLD, MISS AMERICA, MISS UNIVERSE for identifying beauty pageants. While a common trademark in a crowded marketplace may be granted protection, the scope of the protection is narrow and leaves the trademark owner in a weaker position to stop would-be infringers. The holds that the trademark owner choose to enter a crowded marketplace and is not in a position to successfully claim infringement about yet another similar mark in the crowded marketplace absent clear evidence.
When and where must the confusion take place?
- Confusion originally had to occur at the point of purchase, but now, actionable confusion may occur to non-purchasers and at points in time other than the moment of purchase. Notably, this includes initial interest confusion and post-sale confusion.
- Initial interest confusion refers to confusion which occurs before the sale, but that confusion is resolved before the actual sale.
- Post-sale confusion refers to confusion of potential consumers when they see a branded item belonging to someone else.
How similar are the marketing methods and channels of distribution?
- The more marketing mediums which two brands share, the more likely the purchasing group is exposed to marketing messages from both. Where there is a LOC issue, it is more likely that a prospective purchaser of the prior mark owner may be exposed to and confused by a similar mark used by a competitor.
- The type of distribution channels used is particularly relevant where both parties use an unusual channel for their products. For example, if the parties are both consumer electronics companies and both companies exclusively sell their products in electronics vending machines in airports, this factor could weigh heavily on a LOC analysis.
Who must be confused?
- Case law tells us that an “appreciable number” of reasonably prudent buyers must be likely to be confused, that this does not mean a majority is required, and that there is no exact number or percentage. The type of evidence used and the size of the market influence the “appreciable” number. A court may not find likelihood of confusion where the market size is in the millions and there was circumstantial evidence that 30% of that market may be confused, but that same court may find likelihood of confusion where there is actual evidence that just 5 people in a market size of 200 were confused (for example, emails from 5 professors in a market for nano-technology devices for universities). The law holds that even a small infringer should not be allowed to chip away at the rightful brand owner’s rights.
- Reasonably prudent buyers means ordinary buyers purchasing with ordinary caution. They possess “reasonable intelligence and discrimination” for the particular market at issue (surgeons purchasing surgical tools or college students buying energy drinks).
What are the purchasing conditions?
- In a LOC analysis courts will consider the circumstances in which the purchasing decisions are made. Whether the goods at issue are typically purchased with careful attention (cars, enterprise software) or more whimsically (milk, gum) affects the level of attention a prospective purchaser will have. Purchasers in a situation where they pay more attention to a purchase decision are less likely to be confused by subtle differences in the brand whereas the opposite is true for situations where a good is hastily purchased without careful consideration.
Have the prior mark and contested mark coexisted for a significant amount of time with no evidence of actual confusion?
- Where both a senior and junior users’ marks have coexisted on the marketplace for multiple years, and there is no evidence of actual confusion, the junior user can argue that there is no likelihood of confusion because evidence of actual confusion would have already arisen. The lack of it, as the argument goes, is proof that the marks can peacefully coexist.
Understanding the policy rationale that drives the law helps us understand why seemingly impractical practices exist and why. Congress and the Supreme Court have repeatedly upheld dual aims in trademark law: protecting consumers from deception over trade names/symbols and protecting organizations’ trade symbols as property. In essence, U.S. trademark law aims to protect both consumers from confusion in the marketplace and producers from having their brand reputation hijacked by imitators.
The public should be able to rely on trade symbols as a true indicator of source, allowing a purchaser to get exactly the item they wanted to get. At the same time, brand owners’ investments into their products and brand should be protected against false imitation by others, which freerides on the coattails of a true owner’s investment and also risks that purchasers will receive an inferior product.
The policy rationale can be examined from another angle by looking directly at the market functions of trademarks themselves, some of which overlap:
- To help consumers quickly identify and purchase the goods/services of a particular seller (imagine shopping in an aisle where all the wine had plain, identical labels)
- To signal that goods/services with a particular trademark originate from a particular source (restaurants who serve only Ben & Jerry’s ice cream)
- To signal that the goods/services contain a consistent level of quality (if you’re happy with your Apple iPhone, you may be more likely to buy another phone made by Apple in the future)
- To act as an identity symbol and/or be the embodiment of an organization’s goodwill, or the cumulative consumer satisfaction and preference for that organization’s output over time (environmentalists may be more likely to buy a product which has been manufactured by processes approved by Greenpeace International)
- To serve as a tool for protecting the investment an organization makes into its own values and goodwill (Netflix has invested and risked enormous amounts of money on shifting from DVD rentals to online streaming and should be able to stop a new online movie-streaming service from calling itself InternetFlicks)