By Jason C. Kravitz
This article originally appeared in Massachusetts Lawyers Weekly, August 23, 2004.
Imagine this: While driving on the highway, you are suddenly overtaken with a craving for a Big Mac. You see a billboard that says: “McDonald’s—Next Exit.” Unbeknownst to you, however, Burger King actually erected that billboard, and the only fast food restaurant you can find at the next exit is Burger King. You are fully aware that Burger King and McDonald’s are different chains, but your hunger gets the best of you and you decide to eat a Whopper instead of getting back on the highway to find a McDonald’s.
Because this hypothetical transaction was not the result of actual confusion, whether it would be actionable trademark infringement may depend on the federal circuit in which the question is being asked, as the doctrine of “initial interest confusion” (IIC) has not been universally embraced.
In the First U.S. Circuit Court of Appeals, the answer to the question may well depend on the judge you draw.
Trademark law is aimed at the twin goals of ensuring accurate identification of the source of goods or services and protecting the goodwill that producers have generated in their marks over time. Both goals work to the benefit of consumers by providing incentives to producers to sell high-quality goods and reducing the time and expense of searching for goods from a particular producer.
Because trademarks enable consumers and producers to identify and distinguish products and services in the marketplace, the hallmark of any trademark infringement claim is the likelihood of consumer confusion.
A traditional claim of trademark infringement under the Lanham Act requires the claimant to establish that it is the rightful owner of a valid mark; that its use of the mark is senior to that of the defendant; and that the defendant’s use is likely to cause confusion among purchasers.
Though the confusion factors vary slightly by circuit, the First Circuit’s test for evaluating the likelihood of consumer confusion requires an analysis of: the similarity of the marks and of the goods or services; the relationship between the parties’ respective channels of trade, advertising, and classes of prospective purchasers; any evidence of actual confusion; the defendant’s intent; and the strength of the mark. See, e.g., I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 43 (1st Cir. 1998).
The IIC doctrine permits a finding of infringement in a case involving confusion that is only temporary, that is, where any confusion is dispelled before a purchase is made. The doctrine was first articulated in the Second Circuit in 1975, and it garnered further attention with the Mobil Oil decision in 1987, when the Second Circuit emphasized that temporary confusion could result in the junior user “gain[ing] crucial credibility during the initial phases of a deal.” See Mobil Oil Corp. v. Pegasus Petroleum, 818 F.2d 254 (2d Cir. 1987).
But the doctrine has become increasingly visible with the soaring popularity of the Internet and online commerce.
IIC claims have been made not only in connection with domain names, but also with hidden Web site codes called metatags (which are used by search engines like Google to match keywords with relevant Web sites).
In fact, some Web site operators have deliberately included competitors’ trademarks in metatags so that consumers searching for the competitors’ sites would be more likely to stumble upon theirs as well.
In addition, the recent surge (or scourge) of so-called “pop-up” ads and “spyware” has also given rise to concerns that Web site visitors will mistakenly believe that there is a connection between the site and a pop-up ad appearing on the user’s computer.
The Ninth Circuit’s decision in Brookfield Communications, Inc. v. West Coast Ent. Corp., 174 F.3d 1036 (9th Cir. 1999), is probably the most widely cited case in the context of initial interest confusion in cyberspace.
involved competing claims to use the name “MOVIEBUFF” for online film industry databases. The court found traditional likelihood of confusion in connection with the domain name moviebuff.com, then proceeded to determine that the defendant’s use of “MOVIEBUFF” in metatags was actionable initial interest confusion because it diverted online traffic.
While the Brookfield decision is not without its critics, the decision (and the IIC doctrine) has been cited with approval by a number of courts—most hailing from the Second, Seventh, and Ninth circuits.
The doctrine’s viability in the First Circuit is less clear. While the consensus among observers is that the 1st Circuit has rejected the doctrine, in fact the court has expressly mentioned the doctrine in only one reported decision. In Hasbro, Inc. v. Clue Computing, Inc., the game manufacturer challenged the right of a computer services company to use the domain name clue.com and a related logo, arguing that consumers might initially confuse the defendant’s site with Hasbro’s own online technical support for the computer version of Clue (the well-known board game).
The district court rejected Hasbro’s IIC claim on grounds that such temporary confusion, while inconvenient to Hasbro, did not rise to the level of actionable confusion under the Lanham Act.
On appeal, the First Circuit addressed the question only by remarking that “the [District] court’s refusal to enter the ‘initial interest confusion’ thicket is well taken given the unlikelihood of ‘legally significant’ confusion.” See Hasbro, 232 F.3d 1 (1st Cir. 2000), affirming 66 F. Supp.2d 117 (D. Mass. 1999) (Woodlock, J.).
While the tone clearly suggests skepticism, the court passed up the opportunity to expressly reject IIC as a matter of law. This is noteworthy because, just three months earlier, a federal district court in Massachusetts refused to reject the doctrine in EMC v. Hewlett-Packard Co., 59 F. Supp.2d 147 (D. Mass. 2000) (Tauro, J.), a case involving a dispute over Hewlett-Packard’s use of disk drives with model numbers prominently featuring the letters “E,” “M,” and “C.”
The EMC court disagreed with HP’s claim that the First Circuit had rejected the doctrine in earlier decisions, and noted that at least one Massachusetts district court had embraced it (referring to Judge Patti B. Saris’ decision in Big Top USA v. Wittern Group, 998 F. Supp. 30, 52 (D. Mass. 1998) (infringement is actionable “even if confusion…is dispelled by the time any sales are consummated*#8221;)).
While no subsequent case in the First Circuit, or any district court within the First Circuit, has found actionable infringement under the IIC doctrine, the door has apparently been left open enough that a federal district court in Rhode Island recently characterized IIC’s status as “uncertain.” See Beacon Mut. Ins. Group v. OneBeacon Ins. Group, 290 F. Supp.2d 241, 245 (D.R.I. 2003).
The foregoing discussion makes clear that the IIC doctrine remains controversial. Though only the FIrst and Federal circuits seem predisposed against it, some observers argue that the sorts of pre-sale confusion being alleged under the umbrella of IIC either amount to actual confusion—in which case they should be found infringing under conventional infringement analysis—or they should not be actionable at all, since they do not influence actual purchases.
At present, it is by no means certain that consensus is near (or that the First Circuit’s courts are finished considering the question).
Jason C. Kravitz is a partner in the technology and intellectual property group at Nixon Peabody in Boston. He thanks Michael Scott, a summer associate at the firm, for his assistance with this article.
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