Clearing Your Trademark: How Close is too Close?

April 2010Articles

Where is the Line?

The first of the three preceding articles in this series discussed essential differences between the trademark laws of the United States (which determine ownership of a mark on the basis of its actual use in commerce) vs. those of most other countries (which define ownership by earliest registration alone).

The second of those articles suggested that there are levels of strength or inherent protectability for trademarks depending on the “distinctiveness” of various categories of marks. Distinctiveness (ie, the ability of a mark to distinguish products and services of one provider from those of its competitors), and thus protectability of the mark, descends from the highest levels for “fanciful marks” (e.g., Kodak®) and “arbitrary marks” (Apple® for computers) to “suggestive marks” (Chiquita® for bananas) to “descriptive marks” (RealLemon® for lemon juice) to generic terms, which are not protectable at all.

The third article proposed considerations for determining the scope of a trademark search based on the risks associated with failing to identify potential problems before launching a new mark.
This article seeks to bring the “clearance” process into sharper focus.

How to Evaluate the Risk

After the attorney has secured or conducted a database search covering not only registrations of the same or similar marks but also all available “common law” references (ie, uses in commerce without regard to registration), the collected mass of references will be evaluated for potential infringement problems. Recalling that the test of trademark infringement in the United States is the reasonable likelihood of consumer confusion, it is evident that a conflicting mark does not have to be identical to the searched mark in order to be a problem, if other factors enhance the likelihood of confusion.

Without getting too heavily into legal analysis, it is worth listing the factors commonly used by courts in making a determination in this regard. These are known as the “Polaroid Factors” that were enunciated in 1986 by the U.S. Federal Circuit Court of Appeals for the Second Circuit in New York, and they have been used routinely by courts in analyzing infringement claims ever since. Application of these factors does not follow a rigid formula, but must be viewed in context and considered with flexibility as a means of evaluating a particular situation.

The Polaroid Factors are as follows:

  1. “Strength of the Mark,” which is determined by the inherent distinctiveness of the mark itself according to the scale mentioned at the first paragraph of this article, taken together with the longevity, consistency and notoriety with which a mark has been promoted by the earlier (ie, the “senior”) user. 
  2. “Similarity of the Marks” is applied when the senior and junior marks are not identical, and is determined by comparison of the two marks themselves. If the prior mark is the word “Extreme” and the searched mark is “Xtreme”, the difference in spelling could be easily ignored by consumers, if others of the aggravating list of factors were also present. 
  3. “Similarity of the Products” addresses whether the senior and junior users’ products are in the same product category, are likely to be marketed near one another at retail or otherwise are related closely enough by category that consumers would reasonably expect them to be marketed by the same company. Applying this factor to the Extreme/Xtreme marks above, if the two trademarks were used for skateboards, the difference in spelling easily could be ignored by confused consumers. On the other hand, if one mark were used on skateboards and the other on soft drinks, confusion is not as likely to occur. 
  4. “Good Faith” considers the junior user’s intentions in adopting its mark. If there is evidence that the latter sought to “trade upon” the good will created by the senior user’s products with the target consumers, there’s a strong inference that confusion is intentional and therefore likely. 
  5. “Relative Quality of the Product” assesses whether the good reputation associated with the senior user’s products would likely be tarnished by the merchandise of the junior user. 
  6. “Sophistication of Consumers” evaluates how carefully consumers are likely to evaluate products in the pertinent category before making purchases. Inexpensive “impulse” purchases of products sold under similar trademarks would be much more likely confused than purchases of more expensive products, particularly those that involve significant expertise in use or narrowness of target market. 
  7. The presence of “Other Similar Marks” can have the effect of weakening the scope of protection of the senior mark, and can have a significant negative impact upon the likelihood that “yet another” similar mark would appear likely to create confusion. 
  8. Evidence of “Actual Confusion” in the marketplace can be a determining factor in trademark infringement litigation, but it is not available for consideration at the time of the trademark search.

Licensing as an Additional Factor

Recent applications of the Polaroid Factors in practice have yielded surprising results. In some cases, uses of a similar mark in product categories that would have been considered totally unrelated 20 years ago may be found to suggest a sponsorship or other licensing-related connection -- and therefore declared infringing -- today. And such a finding can be traced to the increasing prevalence of licensing itself.