Consumer Confusion before Purchase can Constitute Trademark Infringement

info@josefelgueroso.com

2021-06-18

The United States Court of Appeals for the Eighth Circuit has held that initial, presale consumer confusion can constitute trademark infringement. The case involved sellers of adjustable air mattresses. One party used phases similar to the other party's trademarks in website addresses, paid search terms, embedded links, and text advertisements.

Source: Ruby Wang (Wikimedia Commons)

Facts

The parties sell adjustable air mattresses. The Plaintiff is Select Comfort, and the Defendants are John Baxter, Digi Craft Agency, and other related entities and individuals.

The Plaintiff's registered trademarks include SLEEP NUMBER, SELECT COMFORT, and COMFORTAIRE. The Plaintiff claimed that the Defendants had used phrases that were identical to the Plaintiff's trademarks or similarly confusing in website addresses, paid search terms, embedded links, and text advertisements. The Plaintiff also claimed that the Defendants had failed to dispel consumer confusion and had even furthered it with their actions. Finally, the Plaintiff claimed that the Defendants had made false representations about the Plaintiff's products and their own.

The Plaintiff asserted that the Defendants' actions constituted trademark infringement, trademark dilution, unfair competition, and false advertising. This article will focus on the trademark infringement claims.

Procedural History

Following a precedent of the Court of Appeals, the District Court rejected the Plaintiff's claim of infringement by initial consumer confusion. In Sensient v SensoryEffects (2010), the Court of Appeals had neither adopted nor rejected the doctrine of initial interest confusion; it simply held that if the consumers of a particular product are sophisticated, the doctrine of initial interest confusion is not applicable. The District Court ruled that the purchasers of mattresses are sophisticated, and that therefore the Plaintiff had to show confusion at the time of purchase.

The jury gave a mixed verdict. It rejected the Plaintiff's claim of trademark infringement, following the judge's instruction that confusion must exist at the time of purchase. It found for the Defendants in the trademark dilution and unfair competition claims and for several of the false advertising claims. It found for the Plaintiff in several of the false advertising claims.

Both parties appealed.

The Judgment of the Court of Appeals

The Court of Appeals had to decide whether initial interest confusion among consumers constitutes trademark infringement. Other federal courts of appeals have held that it does.

Trademark Infringement

The use of similar marks on similar products that creates a likelihood of consumer confusion constitutes trademark infringement.

Each federal court of appeals uses a slightly different list of factors to consider in cases of trademark infringement. The Court of Appeals that decided this case uses the following factors:

the strength of the holder's mark;
the similarity of the parties' marks;
the degree of competition between the parties' products;
the alleged infringer's intent to pass off its goods as those of the trademark holder;
incidents of actual confusion;
the type of product, its costs, and purchase conditions.

Likelihood of confusion is a question of fact, to be decided by the judge or the jury, as the case may be.

Initial Interest Confusion

Initial interest confusion occurs when a customer has initial interest in the product, but does not purchase it.

Based on statutory language, the Court of Appeals concluded that trademark law protects goodwill at all times, including before a purchase and after a purchase. If a consumer incorrectly associates the marks of two parties, the senior user is deprived of an opportunity to sell its product.

The question of consumer sophistication is for the jury to decide. If consumers are sophisticated, however, the doctrine of initial interest confusion does not apply. On the other hand, if it is uncertain whether the consumers of a certain product are sophisticated, the plaintiff can submit evidence of initial interest confusion.

The record of this case was mixed in connection with initial interest confusion and consumer sophistication.

Mattresses are expensive, and this suggested that consumers of this product are sophisticated. On the other hand, the record showed actual confusion among customers who called the Defendants' call centers. In addition, emails from Defendants' executives indicated that they perceived confusion among consumers as proof that their advertising was working.

Other evidence suggested that mattress shopping is infrequent, and thus most consumers are relatively uneducated about the product. Similarly, the record was inconclusive about the sophistication of online shoppers.

In sum, the evidence revealed uncertainty about the sophistication of shoppers of mattresses, and therefore the applicability of the initial interest confusion doctrine was also uncertain. As a result, the Court of Appeals held that the question of initial interest confusion had to be decided by the jury. It remanded the case to the District Court.

Sources

Select Comfort v Baxter et al. (United States Court of Appeals for the Eighth Circuit, 2021)

Jose Felgueroso Abogado | Attorney