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"The only thing necessary for the triumph of evil is for good men to do nothing"
Edmund Burke

[page 452]
This brings us to the fifth element, which was the centerpiece of the parties' legal battling below. The fifth element focuses upon whether the alleged infringer used the plaintiffs trademark in a manner likely to cause confusion in the relevant public. Just who is the relevant public (or relevant audience to put it differently) is the most hotly debated issue on appeal. Below, the district court held that VD was entitled to summary judgment in its favor with respect to G-P's contributory trademark infringement and unfair competition claims under the Lanham Act and its unfair competition claim under North Carolina common law on the basis that no evidence existed that VD's marketing and selling of its 810-B Toweling for stuffing in Dispensers caused confusion for the distributors or the end-user customers. In so holding, the district court rejected G-P's legal theory that restroom visitors who consume toweling from Dispensers in hotels, stadiums, and restaurants, etc., constitute the relevant audience for purposes of the required likelihood-of-confusion analysis. On appeal, VD defends the district court's [page 453] reasoning, while G-P contends that it is at odds with well-established Fourth Circuit precedent recognizing that post-purchase confusion can be actionable under the Lanham Act.

We agree with G-P that the district court erred in limiting its likelihood of confusion inquiry to distributors who purchased 810-B Toweling and their respective end-user customers. While transitory public confusion will not satisfy the likelihood of confusion element, Fourth Circuit case law makes room for the factfinder to consider confusion among the non-purchasing public in the likelihood-of-confusion inquiry if it can "be shown that public confusion will adversely affect the plaintiff's ability to control his reputation among its laborers, lenders, investors, or other group with whom plaintiff interacts." Perini Corp., 915 F.2d at 128.

For example, in Polo Fashions, Inc. v. Craftex, Inc., 816 F.2d 145 (4th Cir.1987), the trademark owner demonstrated likelihood of confusion, including post-sale confusion, between its trademarked products and counterfeit shirts manufactured by the defendant, because anyone seeing the counterfeit shirt bearing plaintiff's trademarked logo being worn by its owner would not see the defendant's label on the inside back of the neck, but would only see plaintiff's trademarked logo on the front of the shirt. Id. at 148. Thus, it was likely that the observer would identify the shirt with the plaintiff, and the plaintiff's reputation would suffer damage if the shirt appeared to be of poor quality. Id. See also Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d 8, 17 (1st Cir.2004) (citing Perini in support of holding that likelihood of confusion inquiry in trademark case is not limited to actual or potential purchasers, but also includes others whose confusion threatens trademark owner's commercial interest in its mark); AMP Inc., 540 F.2d at 1183, 1188 (4th Cir.1976) (in limiting its likelihood-of-confusion inquiry to whether or not plaintiff's customers were likely to be confused by defendant's use of the word AMP, district court used too narrow a test for determining likelihood of confusion; inquiry should have additionally focused on likelihood of danger that such use would confuse public in general; remanded for reconsideration); Restatement (Third) of Unfair Competition 20 cmt. b (1995) ("To be actionable... confusion must threaten the commercial interests of the owner of the mark, but it is not limited to the confusion of persons doing business directly with the actor."); 4 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition 23:7 (4th ed. 2009) ("In 1962, Congress struck out language in the Lanham Act which required confusion, mistake or deception of 'purchasers as to the source of origin of such goods and services.' Several courts have noted this expansion of the test of infringement and held that it supports a finding of infringement when even non-purchasers are deceived.") (footnote omitted). Cf. Lyons Partnership, L.P. v. Morris Costumes, Inc., 243 F.3d 789, 802-03 (4th Cir.2001) (relevant inquiry in determining whether costume rented by costume rental company was intrinsically similar in design to popular children's television character (i.e., Barney) that was protected by copyright, as would support finding of copyright infringement based on substantial similarity, was whether costume and copyrighted character expressed ideas in substantially similar manner from perspective of intended audience of young children, rather than from perspective of adults, even though costume was purchased by adults).


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