Trademark Law and Likelihood of Confusion

The purpose of trademark law is to prevent confusion
in the minds of the consuming public as to the source
of a particular good or service. An owner of a mark
spends considerable money and effort marketing its
mark and the goods and/or services that are identified
by that mark. One reason for the investment of the
money and effort is to make the brand identifiable
by the consuming public in association with a particular
good or service. In this way the owner maintains
the exclusive right to capitalize on their investment.
Therefore, if a competitor is intending to use the
owner’s mark in such a way as to cause or create
a confusion such use may be actionable.

Nominative Use

However, if one’s use of a name is not likely to confuse the public as to either the source of the goods or services that are provided or it is not implying any endorsement from the owner of the mark, one may be free to use the name without penalty. The courts refer to this kind of permissible use as “nominative” because the use is not likely to cause any confusion as to source. With certain famous marks, the owner of the mark may have the right to prevent the mark from being “diluted.” This means that even though no one would be confused by the use of a mark in a way that does not even remotely indicate that its use was intended to imply use by the owner or confusion as to source, the mark may still be protected against such use if such use “dilutes” the value of the mark in other ways.

Confusingly Similar or Likelihood of Confusion

The terms, “confusingly similar” or “likelihood of confusion” both refer to the standard required to prove infringement of a trademark. If the relevant consuming public will likely be confused or mistaken about the source of a product or service sold using the mark in question, then likelihood of confusion exists, and the mark has been infringed. The likelihood of confusion test is also one of several examinations conducted by the U.S. Patent and Trademark Office in determining whether to approve an applicant’s trademark application.

Actual Consumer Confusion Not Required

Trademark law seeks to proactively prevent consumer confusion, and thus it does not require proof of actual consumer confusion in order for infringement of another company’s trademark to occur. All that is necessary is for the trademark owner to be able to prove that a hypothetical, “reasonably prudent” consumer would likely be confused by the use of the same or a similar trademark on potentially competing products. The hypothetical purchaser is not expected to make detailed, side-by-side comparisons or to have perfect recall. Infringement is not limited to confusion of consumers as to source, but it includes confusion of any kind with respect to consumers or potential consumers. Courts have even found a likelihood of confusion to exist where the public at large could be confused, even though the actual purchasers themselves are not confused.

Factors Used to Determine Likelihood of Confusion

In determining likelihood of confusion, courts evaluate several factors. No one factor is determinative in and of itself, and how important one factor is over another is case specific. The following are some of the factors that courts consider:

• Whether or not the goods or services using the same mark compete with one another. Marks that are used on similar or related goods or services are more likely to confuse consumers as to the source of those goods or services. Even where the plaintiff’s products are not exactly similar, the court may in some cases consider how likely the plaintiff is in the future to sell similar products.
  
• Whether or not the goods or services are so closely related that they are being marketed through the same stores or channels of distribution.
  
• Whether or not the alleged infringer intended to trick consumers in order to “cash in” on the plaintiff’s business good will.
  
• Whether the marks are similar in appearance, phonetic sound, or meaning.
  
• How careful the consumer is likely to be prior to purchasing. The more sophisticated the consumer or the more expensive the product then the more discriminating the consumer is expected to be, and the less likely confusion will be attributed to them.
  
• Whether or not the companies are accessing overlapping customer bases. If the companies both sell to the same target group then there is more likely to be consumer confusion.
  
• The legal strength of each of the marks. The greater the public recognition of a mark as a source identifier, the more likely that similar uses will be confusing.
  
• Whether there has been any actual confusion. If so, this is not conclusive evidence of likelihood of confusion but must be weighed together with the other factors.

Obligation to Police Trademark

Businesses may not ignore infringing uses of their mark. Companies that tolerate infringing uses of their mark risk losing all of their rights in the mark if a third party challenger claims the company abandoned the mark by not enforcing it.