The Likelihood of Confusion (LOC) research used in trademark infringement litigation is based on the following text of 15 U.S.C. 1125 known as the Lanham Act.
Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which–
is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or
in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
Current Survey Research Practice
As can be seen here, the act sets up three conditions that may cause the alleged infringer to be found liable:
- Mistake, or
Confusion, or more precisely, likelihood of confusion, is probably the most common target of litigation and is distinguished by the courts’ readiness to admit survey results into evidence. The text of the law stipulates that LOC may manifest itself in six different ways (in the order indicated below) describing the relationship between the products or services being litigated:
- Sponsorship, or
The most commonly used research designs usually take the six states mentioned in the text and ask survey respondents whether they think they apply in the case being litigated. The specific questions asked of respondents tend to break up the six-state array into subsets resulting in several questions rather than listing them in a single question.
The questions posed in this paper are:
- Is this practice appropriate?
- Is it just a matter of research convenience—copy the legal text verbatim and don’t worry about the implications—or is there some fundamental logic behind it?
- What would the ordering be if it followed established consumer behavior theory principles?
- And, finally, how would a consumer behavior-driven approach affect the results of LOC studies and, ultimately, judicial decisions?
It appears that the law intended to cover what it perceived to be many, or all, of the manifestations of likelihood of confusion. But in stringing all the various circumstances in the order it did it placed an unacceptable burden on survey researchers who are driven by the dictates of consumer behavior theory. When looking through the prism of human behavior the six-element set seems completely disorganized and, therefore, unfitting as a list of variables that can be measured via questionnaire-based survey research.
Likelihood of Confusion as a Process
LOC research tries to discover whether consumers think there is any relationship between the plaintiff’s and the defendant’s product, brand, or mark. To obtain that information researchers employ one of two methods. They either expose a sample of target market members to the two stimuli, either sequentially or side-by-side, and ask them for their opinions regarding the relationship between the two with regard to the six variables or expose respondents to the alleged infringing product and ask them to identify what company is responsible for it.
How do consumers develop an answer to that question? The interview situation is supposed to replicate, or come as close as possible to, real life conditions when consumers are about to make a choice as to what product they will buy. Both in real life situations and in the simulated interview situation, consumers are exposed to stimuli. What do people do when exposed to stimuli? They go through a three-step process. First they take the information in by means of perception; that is, they absorb as much of the information presented to them as they require to get to the next step. As soon as the information is stored in short-term memory they proceed to label it relative to their experience field, referring to such antecedents as: product category, circumstances of use, prior experience and satisfaction, knowledge about the manufacturer and the other products marketed by the same manufacturer, brand image, perceived value for the money, etc. Once the stimulus is idiosyncratically labeled by each respondent, they are ready for action. If this were a real life situation, the action would be product choice. In surveys the action is answer choice, i.e., which answer best represents the interviewee’s response about the nature of the relationship between the two stimuli.
To be reliable, the answer choice must be specific and differentiated from all the other possible answers; it cannot be a compound answer where sub-sets of the six-item set are indistinguishable from one another because they are presented in sets of three, two, or any number larger than one.
States of Likelihood of Confusion – The Hierarchy
This brings us to the next point—trying to determine whether the “set of six” likelihood of confusion circumstances expressed in the text are ordered randomly or are following some purposeful pattern, or whether they represent a hierarchy. If the latter is the case, then we must uncover the hierarchical order. As will be shown below, the presence of a hierarchical order dictates a fixed ordering in the questionnaire itself and has implications regarding data analysis and the conclusions that can be derived from that analysis.
The table below shows the hierarchical array formed by the six LOC circumstances enumerated in the text. The items are listed top-down in the order of the strength of the relationship.
|Likelihood of Confusion Condition or Circumstance||Nature of the Relationship|
|Sponsorship||Active involvement by the Plaintiff|
|Approval||Passive involvement by the Plaintiff|
|Affiliation||Weak relationship of a vague nature|
|Association||Weak relationship of a vague nature|
Origin is placed at the top of the list because it represents the strongest form of relationship possible when respondents believe that the two products they have been shown as stimuli are actually put out by the same company.
Next in line, in terms of strength of relationship is sponsorship because it implies that respondents believe that the Plaintiff has initiated an active relationship whereby it has taken the Defendant’s product under its auspices and actively supports and promotes it.
Third in line is approval, which denotes a passive acceptance of the Defendant’s product by the Plaintiff. While passive—as opposed to sponsorship, which we have labeled active—approval connotes a conscious and knowing act on the part of the Plaintiff.
Affiliation and association suggest a vague relationship; the terms themselves do not give any information as to possible reasons for the affiliation or association, the strength of the relationship or its durability.
Finally, connection is the lowest level in the hierarchy of strength of relationship because it lacks any specificity as to motive, strength or marketing rationale. The term itself is quite vacuous.
Implications for Questionnaire Design
If a correct interpretation of the law is that any of these conditions is enough to label the respondent “likely to be confused,” the implications for questionnaire design is to ask each of the six items individually and hierarchically, that is, to start from the top of the hierarchy going down until the respondent says “Yes” to an item. That designation of the type of relationship between the Plaintiff’s and Defendant’s products is then taken as an indication of likelihood of confusion.
This interviewing method results in the inclusion of any answer among the six in the “LOC bucket” regardless of the strength of the perceived relationship. One must assume that that was the intent of the writers of the Act; why would they have, otherwise, offered a list made up of six distinct possibilities?
This approach can find great support in consumer behavior theory in so far as perception and cognition are concerned. In other words, consumers may process information, form beliefs and build expectations based on very little information. The reason is that the brain abhors information gaps and fills in the “missing information” to form an opinion or stake out a position. Depending on the degree of objective similarity between the two stimuli and the individual respondent’s idiosyncratic processing mechanism, when we sum over all the respondents in a survey we can quantity the extent of LOC in the case and compare it to the results of a control cell to determine whether the results are statistically significant. In addition to that, judges and juries will still have to decide if the results are meaningful in terms of their absolute magnitude.
One of the ways in which this approach differs from current practice is that it asks about each state individually while current practice often lumps three or more states in a single question. This improvement can go a long way towards clarifying the basis for the finding of LOC and provide judges and juries with a deeper and better understanding of the severity of the infringement.
The data produced using this approach can help determine courses of action, damages, etc. For instance, cases where the large majority of “likely to be confused” consumers got there because they believe there is an association between the two marks may be treated differently than cases where they got there because a majority identified their LOC with equivalency. It is conceivable that judgments may include remedies commensurate with those findings.
Summary and Conclusions
This paper has shown that the six ways that the Lanham Act recognizes likelihood of confusion are not created equal, certainly not in the eyes of consumer behavior theory. The paper argues in favor of viewing the six states as arrayed along a hierarchy, which leads to a different questionnaire design architecture than currently used. The advantages of the proposed method are: the ability to describe in detail the reasons associated with LOC in every case; the application of internally consistent logic, which follows consumer behavior principles; and the increased capacity for meaningful analysis.
Viewing the Lanham Act stipulations as a hierarchy of relationships rather than as an undifferentiated assortment brings the interpretation of the Act in line with the teachings of consumer behavior theory providing a much needed link between the law and real life realities.