September 14, 2011

Initial Interest Confusion

Initial interest confusion

Have you ever faced a situation where you went to the market to buy your favourite deo and ended up picking something similar to it, but as soon as you reached the counter to pay the bill you realize it is not what you were looking for? If yes, then I must tell you that you have just experienced of what is known as “Initial interest confusion.”
In 2006, the International Trademark Association adopted the definition of an expression “initial interest confusion” which is largely derived from US trademark law. The resolution defines the expression as:
"initial interest confusion is a doctrine which allows for a finding of liability where a plaintiff can demonstrate that a consumer was confused by a defendant's conduct at the time of interest in a product or service, even if that initial confusion is corrected by the time of purchase."
In simple terms "initial interest confusion" is a confusion on the part of the public as to the trade origin of the goods or services in relation to which the impugned sign has been used arising from use of the sign prior to purchase of those goods or services, and in particular confusion arising from use of the sign in advertising or promotional materials.[1]
It is a very good defence which can be taken by the person who claims that his trademark is being infringed by the other where both belong to a similar class of goods and the similarity between the goods is the way they are packed. Moreover, in cases where this doctrine is used, the plaintiff does not have to prove that there exists a likelihood of confusion, all he needs to prove is that the similar mark/ packaging grabbed the initial attention of the consumer.
The first case which discussed this doctrine is Grotrian v Steinway & Sons[2], even though the exact phrase is not used but one could sense that it is in this case the doctrine first came into existence. In this case the plaintiff imported pianos in US labelled “Grotrian-Steinweg" and advertised under the mark "Steinweg". The founder of Steinway & Sons was initially making pianos labelled “Steinweg” in Germany. When he immigrated to New York, the business was sold to the three employees Grotrian, Helfferich and Schultz, with the permission to use the "Steinweg" mark. Consequently, Steinway filed an infringement suit against Grotrian.
On appeal the court held that the name “Grotrian-steinweg” would "misled into an initial interest, a potential Steinway buyer who may satisfy himself that the less expensive Grotrian-Steinweg is at least as good, if not better, than a Steinway". And thereby attract potential consumers based on the reputation built by Steinway in US for many years.
Similarly, in Mobil Oil Corp. v Pegasus Petroleum Corp[3] case, Mobil the holder of a registered trademark in both the flying horse symbol representing the Greek mythological figure of Pegasus and the name "Pegasus" sued Pegasus Petroleum, an oil trading company, on the basis of a trademark infringement concerning the "Pegasus" name. Even though the logo of Pegasus Petroleum did not represent any sort of flying horse and solely consisted of two interlocking letters "P" the Court held that "there is a sufficient likelihood of confusion between Mobil's flying horse symbol and Pegasus Petroleum's use of the 'Pegasus' mark to grant Mobil relief under the Lanham Act." Further, the 2nd Circuit Court clarified on Appeal that the likelihood of confusion had to be understood as a "likelihood that Pegasus Petroleum would gain crucial credibility during the initial phases of a deal". The Court concluded that Pegasus Petroleum was misleading potential customers because of their initial interest suggested by the Pegasus mark and holds that this initial confusion alone constitutes a sufficient trademark injury.
In recent times where the marketing strategy is stronger than ever before, the Courts have relied on the doctrine of “initial interest confusion” and held that the displaying the trademark logo of the competitor in ones advertisement also leads to infringement. Storus Corp v. Aroa Marketing Inc.[4], one of the first case related to comparative advertising dealing with this doctrine, the Federal Court held that “displaying a competitor's trademark in Adwords ad copy constitutes impermissible initial interest confusion”, leading to a summary judgment win for the trademark owner.
In one of the recent cases, the issue rose whether initial interest confusion claim is actionable or not? Answering in affirmative Court in case of Och-Ziff Management Europe v Och Capital[5], held that the claim based on the aforesaid doctrine in actionable both in case of trademark and passing off.
Thus, by looking at the cases mentioned above, one can say that this doctrine works as a relief to the registered owner where all he needs to show is that the product of another person creates initial confusion in minds of the consumer and he will win the case even without proving the likelihood of confusion. It would be especially useful in cases where the relevant market for the product of the claimant lies in rural areas where the consumers identifies the product by the way it is packed/ way the logo looks. It still remains to be seen how this doctrine will be adopted in India as rural India forms a substantial portion of the consumers.

[1] Och-Ziff Management Europe Ltd & Anor v Och Capital LLP & Anor [2010] EWHC 2599 (Ch)

[2] Grotrian, Helfferich, Schults., Th. Steinweg Nachf. v. Steinway & Sons, 523 F.2d 1331 (2d Cir. 1975), Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons, 365 F. Supp. 707, 717 (S.D.N.Y. 1973).
[3] Mobil Oil Corp. v Pegasus Petroleum Corp., 818 F.2d 254
[4] 2008 WL 449835 (N.D. Cal. Feb. 15, 2008)
[5] [2010] EWHC 2599 (Ch)

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