US courts have long recognized that the risk of confusion exists long past the point of sale, as shown in the 1987 decision by the 11th Circuit US Court of Appeals in US v. Torkington, the Federal Circuit’s 1993 decision in Payless v. Reebok, and more recently, the Eighth Circuit’s 2021 decision in Select Comfort v. Baxter.
Those rulings flowed from amendments to the Lanham Act in 1962, when Congress removed the limiting word “purchasers” from Section 32 as the sole group for whom confusion must be assessed.
Thus, the Eighth Circuit clarified in Select Comfort, “an action for trademark infringement may be based on confusion of consumers other than direct purchasers, including observers of an allegedly infringing product in use by a direct purchaser.”
Outside the US, post-sale confusion may have gotten a later start but has been quick to catch on.
In the UK, notably, the High Court recognized “confusion on the part of … the public … which only arises after the goods or services have been purchased” in its 2011 judgment in Datacard v Eagle Technologies. While in Thomas Pink v. Victoria's Secret UK, issued in 2014, judges deemed it reasonable to consider when a challenged trademark emblazoned on clothing was no longer viewable to the wearer post-sale.
— Differing perspectives —
Now the doctrine is on the brink of yet another UK expansion — one that has the potential to leapfrog the US’s already liberal interpretation of post-sale confusion — with the Supreme Court due in mid-March to hear the latest appeal in Iconix Luxembourg Holdings v. Dream Pairs Europe.
At issue is a Court of Appeal judgment from January last year (see here) that reversed High Court findings in favor of Dream Pairs, which Iconix accused of infringing the double-diamond logo of its Umbro brand.
Bethany Wheeler-Fowler, an associate with Foot Anstey, told MLex that “since marks are often encountered for the first time in a post-sale setting,” the sports, fashion, retail and consumer industries stand the most to gain — or lose — by the decision to hear the case.
The judgment will “confirm whether or not the likelihood of confusion analysis remains wide-reaching and marks must be considered from differing perspectives and in contexts far wider than a mere hypothetical side-by-side analysis,” she said.
Should the UK's highest court affirm, it “could lead to more trademark disputes, increasingly lengthy and complex trademark clearances and revised trademark strategies,” Wheeler-Fowler added.
— Realistic comparison —
The Umbro logo, an elongated diamond inside another diamond, has been used in UK commerce since the 1970s. Dream Pairs is a relative newcomer, having sold its competing football kits and boots online since 2018. Its logo resembles a square-shaped diamond connected to a larger one surrounding it.
Writing for the three-judge Court of Appeal panel, Judge Richard Arnold deemed post-sale confusion likely when the vantage point of an onlooker is taken into consideration.
Judge Robert Miles, presiding in the High Court's examination of the dispute, was overly focused on a side-by-side comparison of the parties’ logos and the appearance of Dream Pairs’ logo on the Amazon UK website, according to Arnold.
To that end, although Dream Pairs’ logo is boxy when viewed straight on, when viewed from above — as it would be during a football match — the diamond shape could be skewed to such a point that the logo could be mistaken for Umbro's one, Arnold said. He also noted that the disputed logo is “less crisp” once affixed to football boots than it appears in Dream Pairs’ trademark registration, or online.
“The average consumer encountering the Sign for the first time affixed to, say, a pair of football boots worn by someone else would not know what the Sign looked like when represented graphically. Nor would they even necessarily know, or find out, what the Sign looked like when viewed square-on. They might well only see it looking down, and therefore at an angle,” Arnold observed.
“In those circumstances the appearance of the Sign would be foreshortened. Indeed, it could be more foreshortened than in the image relied on by Iconix. Furthermore, the viewer might well not see the Sign side-on, but only from the front or rear. In all of these circumstances the Sign would appear more like a double diamond, and therefore more similar to [Umbro’s logo] than in the graphic image,” he continued.
“There is nothing artificial or unrealistic about this comparison. On the contrary, it is a realistic and representative scenario for assessing the post-sale impact of the use of the Sign upon the perception of the average consumer.”
— Realistic comparison —
Should the Supreme Court agree with this analysis, it will not only deal a potentially costly blow to Dream Pairs, but to all trademark owners who bank on a public capable of distinguishing between logos that are similar — but not confusingly so — when viewed straight on as a graphic during registration.
Because brand reputation is conceivably harmed each and every time an infringing mark is encountered by a third-party onlooker, damages in post-sale confusion cases can reach staggering sums.
That makes the stakes for UK brands high, and the ramifications don’t stop there, according to Wheeler-Fowler.
“Online marketplaces and companies in the manufacturing, distributing, media and entertainment industries should also take particular note, since trademark infringement widely affects many parties in the distribution chain and those who advertise other parties’ goods,” she said. As a result, the Supreme Court judgment “will be noteworthy to industries far wider than this.”
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