Consumer Confusion – The Touchstone for Trademark Infringement – Klinck LLC

Consumer Confusion – The Touchstone for Trademark Infringement

The purpose of a trademark is to designate the source of a good or service. It provides information to consumers regarding the particular good – i.e., it helps distinguish the good from others. Because the purpose of trademarks is to distinguish between goods, the touchstone for an infringement action is whether there is a likelihood of consumer confusion between the marks.

As noted in our Trademark Basics Page (a part of our Entrepreneur’s Intellectual Property Academy), an application for a trademark application is reviewed for, among other things, competing marks – also known as confusingly similar trademarks. So the registration system is built to avoid consumer confusion. This review is not 100% effective, but it certainly has some success in reducing the situations in which competitors are using confusingly similar trademarks that have been registered.

But what happens where an entity who holds a registered mark discovers a competitor who is using a similar mark (most likely one that has not been registered). That is where a trademark infringement lawsuit is likely to arise.

Consumer Confusion Comes In Many Forms

There are various types of consumer confusion.

The most obvious example of consumer confusion is where consumers are literally confused about the ultimate source – i.e., the manufacturer – of a good. The most obvious example of these situations are in the case of knockoffs, where the infringer is literally trying to create a product that can be passed off as the real thing.

A more subtle form of confusion stems from confusion as to the sponsorship of the good. This form of confusion comes up in the context of trademarks that are often licensed to others. A company that is using sports logos or trademarks without a license, for example, is creating confusion about whether the team has sponsored or endorsed the particular sale.

These first forms of consumer confusion arise in the context that the alleged infringer is using the trademark owner’s brand to sell the allegedly infringing products.

Reverse confusion arises in a different context where the trademark owner is the “little guy” and the alleged infringer is the large, national company. If the large company starts using a confusingly similar mark it will cast a shadow over the actual trademark holder and will tend to lead consumers to believe that the large company’s mark is the real mark (and was the first on the market).

Proving Consumer Confusion

In a trademark infringement case, courts look at whether there is a likelihood of consumer confusion between the valid trademark and the mark accused of infringement.  In determining a likelihood of confusion, courts examine a variety of factors:

Strength of the plaintiff’s trademark – Does the suing person or entity have a trademark that is distinctive? As discussed in a previous post, trademarks are ranked based upon how distinctive they are from generic, descriptive, suggestive, or fanciful or arbitrary? In an infringement suit, the more distinctive, the better.

Proximity of the goods – How similar are the goods at issue? The more similar the products, the more likely consumers will associate the source of the products. This is especially true where the goods are substitutes or complements to each other.

Similarity of the marks – How similar are the marks at issue? Do the marks look similar? Sound similar? Have similar meanings?

Evidence of actual consumer confusion – What is the evidence of actual consumer confusion? Are there sales numbers, advertising campaigns, or other evidence to support confusion?

Marketing channels used by both parties – How do the suing party and the accused party market their products to consumers?  If the parties go to the same trade shows, advertise in the same publications, use the same sale methods, offer their goods around the same price, etc., the more likely there is consumer confusion.

Type of goods and the degree of care likely to be exercised by the purchaser of the good – What kind of good is the one at issue? Do consumers usually do some research before buying that kind of good or exercise some kind of degree of caution before buying? The more caution consumers would exercise before buying the good, the harder it will be to prove likelihood of confusion. Where buyers are using more care, they are less likely to be confused by the mark. Think of the care you would exercise in buying a car versus buying a box of microwave popcorn.

Defendant’s intent in selecting its mark – Was the accused party acting in good faith or bad faith in selecting its mark? This is not a particularly significant factor, but if the accused party intended its mark to be deceptive, then it is presumed that there will be a likelihood of consumer confusion. The “Oapley” sunglasses that look exactly like Oakley’s are a perfect example. The entire purpose is to serve as a knockoff.

Likelihood of expansion of product lines – What is the competition between the suing party and the accused party? Will their respective businesses expand into each other’s market? The higher the likelihood of expansion, the higher the likelihood of confusion.

These factors are non-exhaustive and flexible. The exact analysis will differ from court to court, but these factors will generally shape the analysis.

Conclusion

As the analysis demonstrates, trademark infringement is not exactly an exact science. Outside the context of clear knockoff products, trademark infringement cases often involve complicated questions and are expensive cases to prosecute or defend. In light of the high costs involved, the best bet is to take reasonable steps to avoid the issue in the first place. That is why we highly recommend that startups and entrepreneurs take the time to consider trademark clearance as part of their intellectual property planning process.

About the Author

I’m a lawyer and entrepreneur based in Washington, DC. My legal practice focuses on helping innovators, entrepreneurs, and startups navigate intellectual property issues. My books about IP Law are available for sale on Amazon.

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