The use and protection of distinctive brands are integral steps in bringing a product or service to market, in differentiating that product from others, and in marketing, promoting and selling that product or service to local, regional and global customers. Brands create value, build and protect equity, and become core to the product’s definition and reputation in the market. By claiming trademark rights, a brand-holder asserts that an understanding exists between their brand and consumers, that their brand is distinctive and associated with a specific product or service in the market. A trademark can be seen as a form of contract between two parties, where one party uses a brand (a word, domain name, logo, even a color, scent or sound) to identify and differentiate their product or service from others. The other party to the contract is the consumer. This contract can break down when the trademark is not sufficiently distinctive from others, or when a third-party attempts to deceive or confuse the buying public into thinking their own brand is either the same or related to another. In this three-part post series, I will discuss how brand owners can protect their trademarks against misuse.

Trademark laws exist around the world to facilitate the use, registration and protection of your brand. With the incredible growth of the internet and the surge in global commerce it has helped produce, the importance of having a recognizable name has grown. In tandem, the risk of infringement, the threat of someone else trading on or benefiting from someone else’s brand equity, has also grown. While it is easier than ever to create a global brand, the challenges involved in protecting the equity it creates have increased.

One can see evidence of trademark disputes affecting commerce every day in the news. The issue of protecting brand equity is front of mind for major companies worldwide, and should be at the forefront of any marketing strategy. Trademark disputes most often hinge on whether consumers will be confused, whether the use of a rival name will unfairly affect the “contract” a brand holder has built with the public. Trademarks do not have to be identical to cause confusion. A local hot dog institution in New Jersey, Rutt’s Hut, is suing a rival hot dog restaurant that recently changed its name to Mutt’s Hut. Their contention is that Mutt’s is trading on the long-term brand equity that Rutt’s has built with the public, and that consumers will assume the two restaurants have common ownership. Disputes also arise over whether a certain term is generic or descriptive, whether it is too general for one company to claim exclusive rights. A recent case involves Apple Computer suing Amazon over the use of the term “App Store.” Apple has objected to Amazon’s planned launch of an “Appstore,” a rival service to sell applications for the Google Android operating system. (Interestingly, Microsoft has already disputed Apple’s trademark for “App Store” on grounds that it was too generic, and Apple has countered that “App Store” is no more generic than Windows, a Microsoft trademark).

Likelihood of confusion can be extremely subjective, and the real and perceived threat to brand equity can be challenging to assess. Facebook recently opposed a U.S trademark filing by Teachbook, claiming that Teachbook threatened the Facebook brand with a likelihood of confusion, deceptiveness and false suggestion of a connection; along with dilution of the Facebook name, citing the distinctive BOOK component of their brand, along with the fact that Teachbook was calling itself a “Facebook for Teachers.” While it is up to the courts to determine the validity of each specific trademark case, it is the strength of the bond between the brand and the product or service it identifies that determines how strong the brand’s “contract” is with the public and whether or not confusion could actually exist. Of course, every brand is different, so it’s almost impossible to determine what is overreaching and what vigilant brand protection is without examining each case individually.

Several issues affect whether confusion can occur. Among them, channels of commerce (how is the brand promoted and sold), where is it sold and the sophistication of the buyer (an impulse buy or a careful purchase) all affect the likelihood of confusion. It can be argued that a buyer in the checkout lane of a supermarket is much more likely to confuse a gum and hard candy with a similar sounding name than a car buyer would who is looking at models from two different car makers with similar names. Similarly, the actual brand itself can have an impact on confusion. For example, is the name a generic term for the product, a term that described product attributes, an arbitrary term (a common language word that has little or no meaning for the product or service it represents), or a fanciful name with no meaning? In determining likelihood of confusion for a new computer, LAPTOP (generic), SUPERSLIM (descriptive), OCEAN (arbitrary), and XLATRERA (fanciful) may all affect the strength and protectability of the brand. Generally, it is easier to defend those brands that are less descriptive, and more arbitrary or descriptive. The goods/services (what will the product or service be used for) also have a major impact. The likelihood of confusion rises as the similarity of the goods/services rise.

You can see that the concept of confusion is dynamic, complicated and often subjective. At its heart is a simple question: would a reasonable buyer be confused? These concepts should be front of mind as you pick your brand, as they have a strong impact on your ability to defend and promote your name.

Related Links:
Creating, Protecting and Defending Brand Equity - Part 2