Likelihood of Confusion: The Sine Qua Non of Trademark Infringement
Trademarks are product differentiators that help consumers recognize familiar brands that customers have come to associate with a certain perceived level of goodwill, reputation, quality, taste, consistency, and style. A form of shorthand, a unique signature of sorts, a trademark signals to consumers the source or origin of a particular good or service.
Walking into a McDonalds, we know how a cheeseburger is going to taste. Seeing a red and white striped curved awning with green domes that extend above the awning, we can expect to enjoy custard ice cream or Italian ice from Rita’s Italian Ice. Coffee served in a cup with a two tailed mermaid is, as we all know, from Starbucks.
But what would we think if we encountered McRonald’s burgers or a red and white striped curved awning with blue domes or coffee served in a cup with a three-tailed mermaid?
Trademarks, especially famous trademarks, allow companies to protect their reputation and reap the benefits of their investment by prohibiting others from profiting off of the goodwill of the trademarks by using confusingly similar marks in commerce. Thus, almost every trademark infringement dispute is focused on whether a reasonable consumer would be confused or deceived by the allegedly infringing mark.
The more famous a mark, the broader its protection – you could not open up a McDonald’s Taco Stand without facing a legal challenge from McDonald’s Corporation because consumers would likely believe that the tacos sold by McDonald’s Taco Stand were produced or otherwise sponsored by McDonald’s Corp.
Consumers would be deceived into thinking that McDonald’s is affiliated with the Taco Stand, which can have damaging consequences for the McDonald’s brand. If the tacos are terrible or cause consumers to become ill, consumers will associate those negative experiences with McDonald’s thereby diluting and hurting the brand and goodwill McDonald’s has developed in the marketplace.
For this reason, the line separating infringing use from non-infringing use is paved with potential for consumer confusion. Would the purchasing public mistakenly assume that the alleged infringer’s goods originate from the same source as, or are associated with, the goods of the trademark owner?
Courts confronted with this question make the determination on a case-by-case basis aided by the application of a multitude of factors. In the Federal Circuit, they are known as the DuPont factors:
The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression.
The similarity or dissimilarity and nature of the goods . . . described in an application or registration or in connection with which a prior mark is in use.
The similarity or dissimilarity of established, likely-to-continue trade channels.
The conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing.
The fame of the prior mark.
The number and nature of similar marks in use on similar goods.
The nature and extent of any actual confusion.
The length of time during and the conditions under which there has been concurrent use without evidence of actual confusion.
The variety of goods on which a mark is or is not used.
The market interface between the applicant and the owner of a prior mark.
The extent to which applicant has a right to exclude others from use of its mark on its goods.
The extent of potential confusion.
Any other established fact probative of the effect of use.
[See In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (C.C.P.A. 1973).]
Not all of the DuPont factors may be relevant or of equal weight in a given case, and any one of the factors may control a particular case. Furthermore, the significance of a particular factor may differ from case to case as there is no mechanical test for determining likelihood of confusion.
While similarity or dissimilarity of the marks and the relatedness of the goods or services are usually key considerations, in some cases, a determination that there is no likelihood of confusion may be appropriate, even where the marks are similar and the goods/services are related, because these factors are outweighed by other factors, such as differences in the relevant trade channels of the goods/services, the presence in the marketplace of a significant number of similar marks in use on similar goods/services, the existence of a valid consent agreement between the parties, or another established fact probative of the effect of use.
In the Third Circuit, courts apply the ten-factor Lapp test to determine likelihood of confusion, by evaluating the nature of the products and the context in which they are marketed and sold. See Interpace Corporation v. Lapp, Inc., 721 F.2d 460 (3d Cir. 1983). Courts will not mechanically weigh the number of factors tilting in favor of each party, but instead must view the facts in their entirety, using the factors to view the totality of the circumstance.
With totality in mind, each factor is not necessarily given equal weight.[i]
Similarity of the Marks
“Similarity of the marks is tested on three levels: sight, sound, and meaning.”[ii]Simply changing a letter will not make the appearance of a mark sufficiently different from the original.[iii]
A court must also consider any accompanying mark. A name may appear dissimilar when viewed in conjunction with a company’s house mark, i.e. a mark identifying the manufacturer.[iv] When a product mark is also accompanied by a company’s house mark, the likelihood of confusion is reduced.
The insurance company Allstate developed a device that plugs into one’s vehicle and monitors driving habits to determine insurance rates. This device is called Drivewise and is typically paired with Allstate’s house mark as Drivewise by Allstate.
Kia Motors named new features in their vehicle Drive Wise features and paired the mark with its Kia logo. In a subsequent suit by Allstate for trademark infringement, the court held that both Allstate Insurance and Kia “have well-established, highly recognizable house marks, reducing the risk that consumers will mistakenly associate Allstate’s Drivewise program with Kia [and their Drive Wise vehicle features].”[v]
Courts will also look to the pronunciation of the mark and the meaning. For example, in Allstate, the Court noted that Drivewise has the same meaning for both Allstate and Kia; to evoke a sense of intelligent driving.[vi]
Strength of the Mark
The strength of a mark is largely dependent on the category in which it falls. There are four recognized trademark categories, each with increasing degrees of protection: (1) Generic marks, (2) Descriptive marks, (3) Suggestive marks, and (4) Arbitrary or Fanciful marks.[vii]
A court can never afford trademark protection to a generic mark. This is because generic marks are typically common descriptive names that refer to the category in which a product exists.[viii]
For example, you cannot register a trademark for your brand Chocolate Barbecause it is a generic descriptive phrase that describes a category of products. If a court were to protect such marks, it would be detrimental to the public because such protection would restrict the use of common descriptive terms and ultimately limit public speech.
A descriptive mark tells the consumer something about the product.[ix] It refers to the qualities or characteristics of the product.[x] For example, Sublime Carmel Chews may be considered a descriptive mark because it tells the consumer what the product is and describes a characteristic of that product.
A court will only enforce a descriptive mark if it has attained secondary meaning. In other words, the product “has become distinctive of the applicant’s goods in commerce.”[xi]
For example, a court held that the Dallas Cowboys’ use of the phrase America’s Team had attained secondary meaning, because of its recognition and familiar link to the team, and was not solely descriptive.[xii]
The nature of the product is also important when determining the type of mark. Monkey brand candy would be a descriptive mark if the candies were shaped like monkeys, but arbitrary if the candies were simply round.[xiii]
A court will not protect a simple descriptive name until that name becomes an identifier in commerce of the specific product. Even when a descriptive mark warrants trademark protection, that protection is limited. A court will only find infringement when the marks are “quite similar, and the goods closely related.”[xiv]
A suggestive mark is something more than descriptive, but less than arbitrary. Rather than describing the characteristics of a product, a suggestive mark contains a subtle connotation that reveals something about the product.[xv]
The popular pomegranate-flavored drink POM was entitled to the increased protection of a suggestive mark because it takes some imagination on the part of the customer to link the product and the mark.[xvi] Admittedly, the distinction is unclear, and many courts have struggled to differentiate descriptive and suggestive marks.
As one court stated, “[a] term is suggestive if it requires imagination, thought and perception to reach a conclusion as to the nature of the goods.”[xvii]
Courts do not require secondary meaning in order to afford protection to a suggestive mark.[xviii] Allstate Insurance’s vehicle monitoring device, Drivewise, is a suggestive mark because it does not merely describe the device, but instead, suggests that it is tied to wise driving.[xix]
Both suggestive and arbitrary/fanciful marks enjoy the highest level of trademark protection because they are considered strong as compared to descriptive marks.[xx] Strong marks, like suggestive and arbitrary/fanciful marks, are inherently distinctive, and not dependent on a description of the product.[xxi]
Although both suggestive and arbitrary marks are considered to be strong, arbitrary marks have the advantage of bypassing the confusing debate as to whether they are merely descriptive or suggestive.[xxii] As the name implies, an arbitrary mark is not linked to the characteristics of the product—it is simply made up.
Hershey’s does not describe a chocolate bar, nor does it suggest the same. The Penguin book publishing mark is also arbitrary as a penguin in no way suggests that the product is a book.[xxiii]
Price of the Goods
A court must determine whether the similarly marked goods “could give rise to the mistaken belief that the goods emanate from the same source.”[xxiv] When goods are of the same quality and similar price, the likelihood of confusion is increased. “Different price points make confusion less likely, because the parties’ goods will be purchased by different classes of consumers.”[xxv]
Courts have gone as far as to find likelihood of confusion even when products seemingly have no relation at all, simply because they occupy the same price range. For example, a court held that Uberto by Gucci branded electronic cigarettes were likely to cause confusion with the famous Gucci fashion brand, because the fashion brand sells some small products, such as money clips and pens, in a similar price range that could conceivably come in contact with the electronic cigarettes.[xxvi]
If these similarly priced goods were not sold by the fashion brand, confusion would be less likely as consumers may know that the reasonably priced electronic cigarettes do not fit into the fashion brand’s price range.
Length of Time Defendant Has Used Mark Without Actual Confusion
“If a defendant’s product has been sold for an appreciable period of time without evidence of actual confusion, one can infer that continued marketing will not lead to consumer confusion in the future.”[xxvii] The longer the products have coexisted without confusion, the stronger this inference will be.[xxviii] Courts require a showing of actual confusion for this element to weigh in favor of a likelihood of confusion.
“Intent to deceive is strong evidence of a likelihood of confusion.”[xxix] When a mark is adopted with knowledge of its trademark status, a court may presume that there was intent to deceive.[xxx]
Knowledge of a mark’s trademark status, however, does not automatically establish intent. “Proof of a non-registrant’s intent to cause consumer confusion is only relevant to this inquiry when it supports an inference of likely confusion.”[xxxi]
In Allstate, the Court held that despite Kia’s knowledge of Allstate’s Drivewise mark, intent to deceive was not present because Kia “believed that there would be no consumer confusion” based on the use of its own Drive Wise mark.[xxxii] Where there is no reasonable inference of likely confusion, this factor will not weigh in favor of confusion.
Evidence of Actual Confusion
Unsurprisingly, evidence of actual confusion supports an allegation that the use of a mark is likely to cause confusion, but this is not a necessary element under the Lanham Act.[xxxiii] Evidence of actual confusion is rare because it is frequently unclear, and therefore, courts only apply weight to this factor when there is substantial evidence of past confusion.[xxxiv]
When multiple products with similar marks are marketed through the same channels, the likelihood of confusion is increased. If a cannabis product is sold in the same stores as a non-cannabis product that it parodies, the two products share a marketing channel and may be confused.
If the two products are advertised in the same magazines or television channels, there is also an increased likelihood of confusion. The relevant inquiry is whether consumers are likely to encounter both products via the same marketing channel.[xxxv]
Proximity of the Goods
When products are closely related, the danger of consumer confusion is increased because a consumer may reasonably conclude that the products are associated with each other.[xxxvi] Products that are close in proximity (possibly a similar use or category of product) to each other must use marks that are not similar, while products that are not related may use increasingly similar marks.[xxxvii] Products that are in close proximity are often sold to the same group of purchasers or are similar in use or function.[xxxviii]
For example, the Sleekcraft speed boat was found to be in close proximity to the Slickcraft family recreation boat, despite the boats having different purposes.[xxxix]On the other hand, if a court finds that the two products do not compete at all, a similar mark will not cause confusion among consumers.[xl]
Likelihood of Expansion
When goods are not in direct competition, a court must look to the likelihood that the expansion of either parties’ business will result in competition.[xli] “When goods are closely related, any expansion is likely to result in direct competition.”[xlii]
Mere speculation as to the expansion of a product line is not sufficient to weigh in favor of consumer confusion. The party alleging infringement must have concrete evidence of expansion plans.[xliii] Without concrete plans to expand, this factor will weigh against a likelihood of confusion.
[i] Allstate Insurance Company v. Kia Motors America, Inc., No. 16-6108, 2017 WL 6550669 at *9 (C.D. Ca. Dec. 22, 2 2017).
[ii] Sleekcraft, 599 F.2d at 351.
[v] Allstate, 2017 WL 6550669 at *11.
[vii] Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976).
[viii] Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 (1985).
[ix] AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9 Cir. 1979).
[x] Park ‘N Fly, 469 U.S. at 194.
[xi] Id. (quoting 15 U.S.C. §§ 1052(e), (f)).
[xii] Dallas Cowboys Football Club, Ltd. v. America’s Team Properties, Inc., 616 F. Supp. 622, 638 (N.D. Tex. 2009).
[xiii] Ashley Furniture Industries, Inc. v. SanGiacomo N.A. Ltd., 187 F.3d 363, 370 (4thCir. 1999).
[xiv] Sleekcraft, 599 F.2d at 350.
[xv] Id. at 349.
[xvi] Pom Wonderful v. Hubbard, 775 F.3d 1118, 1126 (9th Cir. 2014).
[xvii] Stix Products, Inc. v. United Merchants & Manufacturers Inc., 295 F. Supp. 479, 488 (S.D.N.Y. 1968).
[xviii] Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 11 (CA2 1976).
[xix] Allstate Insurance Company v. Kia Motors America, Inc., CV 16-6108, 2017 WL 6550669 at *10 (C.D. Cal Dec. 22, 2017).
[xx] Abercrombie, 537 F.2d at 11.
[xxi] Sleekcraft, 599 F.2d at 349
[xxii] Abercrombie, 537 F.2d at 11.
[xxiii] Ashley Furniture, 187 F.3d at 369.
[xxiv] Coach Servs. Inc. v. Triumph Learning LLC, 101 USPQ2d 1713, 1724 (Fed. Cir. 2012) (quoting 7-Eleven Inc. v. Weschsler, 83 USPQ2d 1715, 1724 (TTAB 2007)).
[xxv] Ritz Hotel, Ltd. v. Shen Mfg. Co., Inc., No. 05-4730, 2009 WL 1838357, at *5 (E.D. Pa. June 25, 2009).
[xxvi] Gucci, Opposition Nos. 91223733 and 91223735 at 22–23.
[xxvii] Ritz Hotel, Ltd. v. Shen Mfg. Co., No. 05-4730, 2009 WL 1838357, at *7 (E.D. Pa. June 25, 2009).
[xxix] Entrepreneur Media v. Smith, 279 F.3d 1135, 1148 (9th Cir. 2002).
[xxx] Interstellar Starship Servs., Ltd. v. Epix Inc., 184 F.3d 1107, 1111 (9th Cir. 1999).
[xxxi] Ritz Hotel, 2009 WL 1838357, at *7.
[xxxii] Allstate, 2017 WL 6550669 at *14.
[xxxiii] Network Automation, 638 F.3d , 1151 (quoting Playboy Enters, Inc. v. Netscape Commc’ns Corp., 354 F.3d 1020, 1026 (9th Cir. 1991).
[xxxiv] Sleekcraft, 599 F.2d at 353.
[xxxv] Allstate, 2017 WL 6550669 at *15.
[xxxvi] Sleekcraft, 599 F.2d at 350.
[xl] Allstate, 2017 WL 6550669 at *12.
[xli] Sleekcraft, 599 F.2d at 354 (citing Restatement of Torts § 731(b)).
[xliii] Allstate, 2017 WL 6550669 at *16 (quoting Surfvivor Media, Inc. v. Survivor Productions, 406 F.3d 625, 634 (9th Cir. 2005).