Chapter 13

Likelihood of Confusion: The Acid Test

Protection of trademarks has a very concrete meaning. Under federal law, common law, and state statutes, a trademark owner can prohibit the use of the same or a confusingly similar mark. Injunctive relief can be secured to order the cessation of use and the destruction of offending merchandise. The trademark owner is also allowed to trace profits of the infringer and obtain lost revenues. Sometimes, the monetary elements are hard to determine; however, if a sale has been made by the infringer or the trademark owner's ongoing business has suffered a decline in funds, then the connection is arguably there. It would be up to the infringer to justify that the relationship to its gain and the owner's loss does not exist. The more egregious the trademark theft, the less likely the court will be willing to hear the rationale.

As copyright law sanctions certain uses as “fair use,” trademark law also has a corollary, even though the statutory language does not expressly set it forth. Take Twister, for example. While Universal Pictures may register the word as a trademark for its popular film and spin-off video game, action figures, and theme park, the storyline of weather chasers is not exclusively anyone's. Would a film called Tornado or a theme park ride the Hurricane infringe the trademark rights of Universal? Could a television station launch a series of news inserts called “Twister,” along with the station's own images and thematic music?

The answers lie in trademark analysis; the questions to which we always return bear on the likelihood of confusion: Is there likely to be confusion as to source? Would a consumer be confused into thinking the origin of the program or the theme ride is the same as the familiar title? Proving confusion is fundamental to establishing trademark rights.

Key Issues in Likelihood of Confusion Analysis

Whenever a trademark analysis arises, these are the questions to ask.

Are the Words or Symbols Used Identical?

If they are, the most crucial part of the case is established. However, even identical words do not make a trademark infringement claim a certain winner. For example, Twister the movie and Twister the toilet bowl cleaner share the word; nevertheless, since the word has dictionary meaning, it starts out as “weak.” For the toilet bowl cleaner, the notion of “twister” has suggestive qualities. How strong is the association of the words to the products? How much advertising or publicity has been put into developing associations between the word and source? Remember, judgment calls are going on in assessing the likelihood of confusion.

A few years ago, courts did flip-flops on the question of whether the phrase Here's Johnny was well enough identified with The Tonight Show host Johnny Carson that it could be infringed by a toilet bowl cleaner called Here's Johnny. Carson lost in district court but won on appeal, establishing the important principle—don't mess with Johnny.

If Not Identical, How Close Are the Words in Sound and Meaning?

If the words are not identical, then the analysis becomes more subtle. For example, assume the movie Twister spawns its own enterprises, including a syndicated television series and merchandise such as lunch boxes, notepads, T-shirts, and soft drinks. All of these uses, on products and services, can be registered as trademarks for the movie studio. Now, also assume that some competitors want to tap into Twister mania and start a similar enterprise, Tornado, Inc., with similar business lines. The two marks are distinguishable both aurally and visually. However, their meanings are virtually identical. If the competing project were dubbed Hurricane, it would be a few more steps removed. For trademark confusion purposes, the chances of the public being confused and thinking that the source of Twister and Tornado are the same would be reasonably high, but less so for Hurricane because the word means something else and does not begin with the letter T.

How Similar Are the Goods or Services?

In the Twister-Tornado example, we are considering the same goods or services—TV shows or films and spin-off merchandise. In the case of “Here's Johnny,” the products were very dissimilar—a TV personality and a toilet bowl scrub brush. The closer the products or services are in their lines of commerce, the more likely the public is to be confused about source. Even if the products are dissimilar, if there is a reasonable consumer expectation that the different product line might have originated from the complaining party, then the first user will generally prevail. Whether a Sprint long distance phone company sells branded telephones or not, consumers could believe it does. But could a consumer believe the same thing if he or she saw a Sprint brand of running shoes? Probably not.

Are the Marks Strong or Weak?

If the mark in question is fanciful or arbitrary and rates high on the strength meter, then there is a greater likelihood that, even with dissimilar products, confusion will be found. Strength can be a vital factor in reaching a favorable conclusion for a first user. Remember that red light we flashed when thinking about using Kodak on a chain of movie theaters. A red light would not go off if one wanted to manufacture pairs of gloves under the logo Palm. Despite the popularity of the handheld organizer that fits in the palm of one's hand, the word palm has suggestive qualities. Those same qualities apply to gloves. The word is not arbitrary or fanciful with respect to either product.

What Is the Intent of the Second Comer?

In some instances of confusion, a problem materializes accidentally. The parties do not know each other and the crossing of paths in commerce is unplanned. Certainly, NBC did not deliberately try to rough up the University of Nebraska when it adopted the block N logo. However, in the case of “Here's Johnny,” the fame of Carson was not in doubt, and the toilet bowl company wanted to be cute and play off of the familiar phrase. While parody is respected in copyright, there is less leeway in trademark law for one to parody another's mark. Because controlling market image is crucial to effective use of trademarks, the law is less tolerant when commercial use is made of a famous phrase or mark, even if the intent is parody. Trademark cases also reflect a concern about tarnishment—negative imagery about a mark and its product or service. Knowledge of the original and a plan to copy can be a decisive factor in a finding of trademark infringement.

Is There Any History of Confusion?

Actual confusion is easy to measure. Have there been any misdirected phone calls or letters? Did someone pay a bill from Company A by sending it to Company B? In a radio slogan dispute, a small town station showed evidence that local merchants had complained that the station was going to raise advertising rates to support a big media blitz. It turns out the expensive promotional campaign was for a larger market station whose service area overlapped the small town station's zone. The smaller station was on the periphery of the large station's market, and proof of actual confusion was persuasive on the issue of likelihood of confusion.

Despite this result, a basic tenet of trademark law is that actual confusion is only evidence of likelihood of confusion, not conclusive proof that confusion exists. Why? Because even though some folks may be confused, that does not mean that marks are likely to confuse reasonable consumers. This is a variation on the old saying about fooling some of the people some of the time.

Are the Consumers Sophisticated?

Defining the market for the goods or services and knowing the level of sophistication of the customer are important facts in trademark disputes. In many trademark disputes, the consumers are professionals who, it can be argued, should readily distinguish between the sources of the services or products. For example, most television station engineers who buy a station's technical equipment know that Jerrold is a respected brand name for electronic devices. Would an equipment manufacturer that named its new products Jerry create confusion among seasoned engineers? Probably not; however, if the products made their way into the mass marketplace and ordinary consumers were purchasing them, the conclusion would be different.

What About the Quality of the Goods or Services?

If the quality of the second product is clearly inferior, that fact can raise additional sympathy for the first trademark owner. Even sophisticated consumers might be disinclined to the first brand if they believe two products are related by source and one is clearly inferior. In all likelihood, they will have concluded that the respected name failed to maintain acceptable standards.

Interestingly, even if the second comer's products are superior, trademark law still holds that the second user is an infringer. The original owner is entitled to define its goods and services the way it chooses and not have the product image made by another. If Motel 6 wants to be known for low cost lodging, being associated with a high-priced venue could spoil its reputation.

Is There Any Survey Evidence?

More and more, courts want to see some survey research when it comes to proving the likelihood of confusion, especially if the case does not involve identical marks in similar product or service lines. Polling a responsible sample in support of a claim of confusion is good form in trademark disputes.

Survey research, which must be disclosed to an opposing party in litigation, should be handled very carefully by professionals. The wrong results can doom a case quickly, so it is important for the research to be done with a view toward results. A good rule is to plan a survey in stages. For example, a professional firm may start with a small telephone sample or mall intercept of 25–50 consumers to help refine the research and confirm the broad outlines of a claim of confusion. If these preliminary results suggest that confusion is likely, then a larger sample (in the 200 range) should be conducted. If the small survey produces surprising results, then a different tactic or an alternative form of inquiry may be needed. If a larger sample were undertaken with no preliminary results, the findings could be revealed during the course of discovery and the negative results utilized by an opposing party to the detriment of the one taking the survey. This also underscores the importance of consulting with professional survey firms from the outset of cases for which surveys are critical. The firm's analysts should be prepared to serve as witnesses in the event of a trial. The demeanor and credibility of the dueling expert witnesses are often decisive in survey-laden trademark litigation.

But any trademark litigant should be forewarned that survey results can be surprising.

In one radio dispute over the dial address 99 (short for the dial position 98.9), the survey showed some listeners could correctly source the station, while others thought 99 was generic for any of five other radio operations. Making sense of this survey nonsense proved impossible even for a professional market analyst.