Trademark Law - Confusion - Likelihood Of Confusion

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Likelihood Of Confusion

Confusion can occur before the sale, at the point-of-sale, or after the sale. The sale does not have to be consumated for there to be confusion. Confusion is a very fuzzy area for the courts who have struggled over the years to define it and set limitations.
In Hasbro, Inc., vs Clue Computing, Inc., in the Second District, Judge Woodlock made an interesting observation:

Furthermore, to the extent that Ms. Magestro's and Mr. Britt's affidavits show actual confusion, they do not show reasonable confusion, which is required to find infringement. "[T]he law has long demanded a showing that the allegedly infringing conduct carries with it a likelihood of confounding an appreciable number of reasonably prudent purchasers exercising ordinary care. This means, of course, that confusion resulting from the consuming public's carelessness, indifference, or ennui will not suffice." IAM, 103 F.3d at 201 (citations omitted).
"although the need to search for Hasbro's site may rise to the level of inconvenience, it is not sufficient to raise a dispute as to actual confusion. The paucity of evidence of reasonable and actual confusion weighs heavily against Hasbro's ability to show a likelihood of confusion."

Note here the court's emphasis on "knockoffs". Trademark law deals heavily with "counterfeits" and "copies". The Second District Court of Appeals stated:

"Trademark laws exist to protect the public from confusion. The creation of confusion in the post-sale context can be harmful in that if there are too many knockoffs in the market, sales of the originals may decline because the public is fearful that what they are purchasing may not be an original. Furthermore, the public may be deceived in the resale market if it requires expertise to distinguish between an original and a knockoff. Finally, the purchaser of an original is harmed by the widespread existence of knockoffs because the high value of originals, which derives in part from their scarcity, is lessened."
"We have previously held that post-sale confusion can occur when a manufacturer of knockoff goods offers consumers a cheap knockoff copy of the original manufacturer's more expensive product, thus allowing a buyer to acquire the prestige of owning what appears to be the more expensive product. Mastercrafters Clock & Radio Co. v. Vacheron & ConstantinLe Coultre Watches, Inc., 221 F.2d 464, 466 (2d Cir. 1955). In Mastercrafters, we held that the practice of selling a knockoff wall clock at a cheaper price than the original created an actionable harm despite the fact that customers knew they were buying the knockoff."

The Eleventh Circuit concisely summarized the theory behind protecting the public interest in trademark cases:

It . . . is important to recognize that the enforcement of trademark laws benefits consumers even in cases where there is no possibility that consumers will be defrauded. For, to the extent that trademarks provide a means for the public to distinguish between manufacturers, they also provide incentives for manufacturers to provide quality goods. Traffickers of these counterfeit goods, however, attract some customers who would otherwise purchase the authentic goods. Trademark holders' returns to their investments in quality are thereby reduced. This reduction in profits may cause trademark holders to decrease their investments in quality below what they would spend were there no counterfeit goods. This in turn harms those consumers who wish to purchase higher quality goods.

United States v. Torkington, 812 F.2d 1347, 1353 n.6 (11th Cir. 1987) (citation omitted).
"The more sophisticated the consumers, the less likely they are to be misled by similarity in marks." TCPIP Holding Co., Inc. v. Haar Communications, Inc., 244 F.3d 88, 102 (2d Cir.2001); see Cadbury Beverages, Inc. v. Cott Corp., 73 F.3d 474, 480 (2d Cir.1996) ("The sophistication factor recognizes that the likelihood of confusion between the products at issue depends in part on the sophistication of the relevant purchasers.").

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Confusion can occur before the sale, at the point-of-sale, or after the sale. The sale does not have to be consumated for there to be confusion. Confusion is a very fuzzy area for the courts who have struggled over the years to define it and set limitations. In Hasbro, Inc., vs Clue Computing, Inc., in the Second District, Judge Woodlock made an interesting observation:
	Furthermore, to the extent that Ms. Magestro's and Mr. Britt's affidavits show actual confusion, they do not show reasonable confusion, which is required to find infringement. "[T]he law has long demanded a showing that the allegedly infringing conduct carries with it a likelihood of confounding an appreciable number of reasonably prudent purchasers exercising ordinary care. This means, of course, that confusion resulting from the consuming public's carelessness, indifference, or ennui will not suffice." *IAM,* 103 F.3d at 201 (citations omitted). "although the need to search for Hasbro's site may rise to the level of inconvenience, it is not sufficient to raise a dispute as to actual confusion. The paucity of evidence of reasonable and actual confusion weighs heavily against Hasbro's ability to show a likelihood of confusion."
Note here the court's emphasis on "knockoffs". Trademark law deals heavily with "counterfeits" and "copies". The Second District Court of Appeals stated:
	"Trademark laws exist to protect the public from confusion. The creation of confusion in the post-sale context can be harmful in that if there are too many knockoffs in the market, sales of the originals may decline because the public is fearful that what they are purchasing may not be an original. Furthermore, the public may be deceived in the resale market if it requires expertise to distinguish between an original and a knockoff. Finally, the purchaser of an original is harmed by the widespread existence of knockoffs because the high value of originals, which derives in part from their scarcity, is lessened." "We have previously held that post-sale confusion can occur when a manufacturer of knockoff goods offers consumers a cheap knockoff copy of the original manufacturer's more expensive product, thus allowing a buyer to acquire the prestige of owning what appears to be the more expensive product. *Mastercrafters Clock & Radio Co. v. Vacheron & ConstantinLe Coultre Watches, Inc., 221 F.2d 464, 466 (2d Cir. 1955). In Mastercrafters,* we held that the practice of selling a knockoff wall clock at a cheaper price than the original created an actionable harm despite the fact that customers knew they were buying the knockoff."
The Eleventh Circuit concisely summarized the theory behind protecting the public interest in trademark cases:
	It . . . is important to recognize that the enforcement of trademark laws benefits consumers even in cases where there is no possibility that consumers will be defrauded. For, to the extent that trademarks provide a means for the public to distinguish between manufacturers, they also provide incentives for manufacturers to provide quality goods. Traffickers of these counterfeit goods, however, attract some customers who would otherwise purchase the authentic goods. Trademark holders' returns to their investments in quality are thereby reduced. This reduction in profits may cause trademark holders to decrease their investments in quality below what they would spend were there no counterfeit goods. This in turn harms those consumers who wish to purchase higher quality goods.
*United States v. Torkington,* 812 F.2d 1347, 1353 n.6 (11th Cir. 1987) (citation omitted). "The more sophisticated the consumers, the less likely they are to be misled by similarity in marks." *TCPIP Holding Co., Inc. v. Haar Communications, Inc.,* 244 F.3d 88, 102 (2d Cir.2001); see *Cadbury Beverages, Inc. v. Cott Corp.,* 73 F.3d 474, 480 (2d Cir.1996) ("The sophistication factor recognizes that the likelihood of confusion between the products at issue depends in part on the sophistication of the relevant purchasers.").