In most trademark infringement disputes, one of the key issues is whether there exists a likelihood of confusion in the minds of consumers between trademarks owned by two different parties. Typically this involves the “senior” user of a trademark (that is, the party who used their trademark first) claiming that mark of a newer, “junior” user stands to harm their reputation, siphon off some of their sales, or otherwise dilute or diminish the value of the senior user’s mark. In the typical scenario, the senior user is a large and established commercial entity, while the junior user is often a newer player to the game.
Sometimes, though, the junior user is the big fish in the pond, and the senior user’s business is not merely at risk of being diminished but rather is at risk of being wiped out entirely. These cases are referred to as reverse confusion trademark infringement cases.
A good example of this is the Lady A controversy from earlier this year, when Lady Antebellum rebranded itself as “Lady A,” totally ignoring (or unaware of) the fact that there was an independent musician already using that stage name. Lady Antebellum entered the market decades after the original Lady A, but as a multi-platinum-selling recording act their use of the LADY A mark totally overwhelmed and displaced the original Lady A.
Last week, the Eleventh Circuit decided a case of reverse confusion:
Reverse confusion is not a standalone claim in trademark law; rather, it is a theory of how trademark infringement can occur. In reverse-confusion cases, the plaintiff is usually a commercially smaller, but more senior, user of the mark at issue. The defendant tends to be a commercially larger, but more junior, user of the mark. The plaintiff thus does not argue that the defendant is using the mark to profit off plaintiff’s goodwill; instead, the plaintiff brings suit because of the fear that consumers are associating the plaintiff’s mark with the defendant’s corporate identity. It is this false association and loss of product control that constitutes the harm in reverse-confusion cases.
Wreal, LLC v. Amazon. com, Inc., Case No. 19-13285, at 2 (11th Cir. June 28, 2022).
In this case, the plaintiff was an adult entertainment company that operated a streaming service called “FyreTV.” It also sold a set-top box called the “FyreBoXXX” that allowed users to access FyreTV on their television sets. The plaintiff had been using the FYRETV mark since at least 2008.
The defendant, Amazon.com, sells a streaming device it calls “Fire TV.” Chances are I didn’t have to explain that to you because you knew that already. That is exactly why this is a case of reverse confusion.
Amazon won at trial, but Wreal won its appeal. The Eleventh Circuit held that the trial court erred in applying the standard test for likelihood of confusion as if this was a case of “forward” confusion. Id. at 3. The court said the same factors should have been applied, but given that this is a reverse confusion case, the analysis is not the same. Id.
How Do The Likelihood Of Confusion Factors Apply In A Reverse Confusion Case?
In the United States, courts in each circuit apply a different test when determining likelihood of confusion in a trademark infringement case. The Wreal case was decided in the Eleventh Circuit, which applies this seven-factor test:
- Distinctiveness of the mark
- Similarity of the marks
- Similarity of the goods or services
- Similarity of sales outlets and customer bases
- Similarity of advertising
- Intent of the alleged infringer
- Evidence of actual confusion
The analysis for five of these factors is the same in forward and reverse confusion cases, but the difference in analyses for the remaining two factors is substantial: distinctiveness of the mark and intent of the alleged infringer.
Distinctiveness of the mark
In a forward confusion case, the analysis focuses on the strength of the plaintiff’s mark as it’s a necessary step in determining how much protection it deserves. In a reverse confusion case, courts should consider the “conceptual” strength of the plaintiff’s mark (as the Wreal court put it) but also the relative commercial dominance of the defendant’s mark. This is because the premise of a reverse confusion case is that the defendant, by way of its market power, is capable of totally overwhelming and displacing the plaintiff’s mark.
Intent of the alleged infringer
In a forward confusion case, the purpose of this analysis is to determine whether the defendant intended to piggyback on the goodwill earned by the plaintiff’s mark, thereby tricking consumers into thinking they were purchasing the goods or services of the plaintiff. That is not the case with reverse confusion. Instead, the concern is that the defendant’s marketing activities will overwhelm the brand and reputation of the plaintiff to the extent that consumers will think the plaintiff merged with or was acquired by the defendant or is somehow otherwise affiliated with the defendant.
You can probably imagine certain scenarios where this might seem like a positive outcome. Having consumers think you’re under the Amazon umbrella might not be the worst thing in the world! However, in general we want to protect trademark owners from involuntarily losing control of their own brands.
Courts may choose ignore the intent element in reverse confusion cases, but to the extent they still consider intent they should evaluate any evidence that the defendant knew its actions would flood the market and have the effect of displacing the plaintiff.