Intellectual Property Law

Trademark Infringement: Likelihood of Confusion in the Internet

By Martha L. Arias

The United States Patent and Trademark Office (USPTO) refuses registration of a trademark or service mark that is likely to conflict with a mark or marks already registered or pending before the USPTO, according to Trademark Act Section 2(d), 15 U.S.C. Section 1052(d).  When there is a conflict on whether a trademark is likely to create confusion with an already registered or pending mark, parties usually seek declaratory judgment before US courts.  California courts apply the so-called Sleekcraft factors to determine whether a likelihood of confusion exists.  This article provides information on the Sleekcraft factors and, from those, which are the most relevant for internet trademark infringement cases.

The California courts have used the Sleekcraft factors to determine whether there is likelihood of confusion when deciding declaratory judgments or trademark infringement cases.    These factors emerged in the Ninth Circuit case of AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). In Sleekcraft, the court held that to decide whether customers are likely to be confused as to the origin or source of products, these factors must be considered:

(1) the strength of the mark; (2) proximity or relatedness of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the marketing channels used; (6) the degree of care customers are likely to exercise in purchasing the goods; (7) the defendant's intent in selecting the mark; and (8) the likelihood of expansion into other markets.

Further, in Interstellar Starship Servs., Ltd. v. Epix, Inc., 304 F.3d 936 (9th Cir. 2002) the court held that (1) the similarity of the marks, (2) the relatedness of the goods and services, and (3) the parties' simultaneous use of the Web as a marketing channel are the most relevant factors for internet trademark infringement cases. In Epix, the court held that if the three-element analysis does not provide an answer to the likelihood of confusion question, the district courts will have to balance all Sleekcraft factors within the context of each case.

Perfumebay.com Inc. v. eBay Inc., 506 F.3d 1165 (9th Cir. 2007) is an example of how California courts have applied the 'trinity' test from Sleekcraft to internet trademark controversies.   Perfumebay sold perfumes in eBay.  After many years and million of dollars in sales, Perfumebay tried to register the trademark "perfumebay." eBay opposed this registration claiming likelihood of confusion with eBay's trademark.  eBay claimed its site did not sale any products; instead, it is a platform for sellers. Customers may get confused by the mark perfumebay and the fact that it was sold in eBay's site.  The parties reached an agreement before the USPTO, in which perfumebay would refrain from using this mark.  Yet, perfumebay continued using its mark and eBay filed a lawsuit for trademark infringement claiming likelihood of confusion.

The District court held perfumebay infringed upon eBay's trademark and this use was likely to confuse consumers as to the origin or source of products.   The court of appeals affirmed.  It held that perfumebay mark was similar to eBay's trademark even when perfumebay attempted to advertise its products as "perfume" "bay."  This was supported by search engine results showing both marks when people searched for "perfumes" and "eBay."  Regarding the other two factors of the trinity test, the court held they weighed equally in favor of eBay.  Even though eBay did not sell perfumes itself, it was an auction platform for many other products.  "Related goods are generally more likely than unrelated goods to confuse the public as to the producers of the goods," the court stated.  Finally, in addressing the third factor, the court held that both companies used the internet to advertise their products and they were likely to create consumer confusion because the marks were going to be encountered at the same time, on the same screen.          

This is an interesting case for e-commerce sellers in California.  The use of the term "bay" as prefix or suffix to a mark may rise trademark infringement claims from the well-known auction site.      

Full post as published by IBLS Internet Law Blog on July 14, 2008 (boomark / email).