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"Initial Interest Confusion" Confirmed as a Species of Trade Mark Infringement
Summary
In the recent decision of Och-Ziff Management Europe Ltd & another v Och Capital LLP & others, Mr Justice Arnold confirmed that “Initial Interest Confusion” is sufficient for a finding of trade mark infringement under European law.
The concept of initial interest confusion
The traditional model of trade mark infringement requires that the purchaser of goods or services is likely to be confused as to their trade origin at the time of sale. Over time, however, the courts have increasingly acknowledged the wider functions of trade marks and this has in turn lead to a broadening of this traditional model.
Initial interest confusion falls outside the scope of the traditional infringement model because it deals with confusion (or likely confusion) arising before the purchase is made. It can therefore theoretically lead to a finding of infringement in situations where the consumer ceases to be confused at the time of purchase.
The case for initial interest confusion is strongest in relation to confusing or misleading advertising or promotional materials and is frequently argued in relation to Internet advertising and the use of search engines and AdWords.
The Case
The plaintiffs owned trade mark registrations for the word marks OCH (pronounced “ock”) and OCH-ZIFF covering a range of financial services.
The defendants had made few actual sales under the trade mark OCH CAPITAL (pronounced “O-C-H- Capital”) but they had used the sign on their website to advertise their services.
The average consumer was deemed to be reasonably attentive and knowledgeable of the market and, as such, although he might be confused upon seeing the sign OCH CAPITAL on a website, any confusion would be dispelled before a sale was made due to the differing pronunciations.
The question before Mr Justice Arnold in the present case was, therefore, to what extent does the doctrine of initial interest confusion apply under European trade mark law?
The Arguments For
Article 5(1)(b) of the Trade Marks Directive states that there must be "a likelihood of confusion on the part of the public" for trade mark infringement to be found. It is not limited to confusion at any particular point and neither is actual confusion required. Initial interest confusion is still “confusion” and so it falls within the wording of the infringement provisions.
Additionally, the Directive recognises that use of a trade mark in advertising can lead to infringement – so no actual sales are required.
The Arguments Against
The majority of arguments against the doctrine focus on whether a deliberate intention is needed or if infringement can follow from innocent actions.
The majority of cases (both in the US and Europe) suggest that an intention to deceive is not necessary. However, some courts have taken the opposite view. In one US case, it was held that initial interest confusion should only lead to infringement where the defendant sought financial profit from the confusion.
OCH Capital argued that "likelihood of confusion" should be construed to mean confusion at the point of sale. They also argued that initial interest confusion should only lead to infringement if the defendants’ actions sought to take unfair advantage of, or were detrimental to, the distinctive character or repute of the plaintiffs’ trade mark (i.e. infringement under Article 5(2) of the Trade Marks Directive).
The Decision
Mr Justice Arnold took the view that initial interest confusion can amount to trade mark infringement under European law. He noted, in particular, that the Trade Marks Directive specifically mentions that advertising can lead to infringement and OCH Capital had no convincing counterargument.
The judge also held the defendants liable for passing off, on the basis that initial interest confusion amounted to a misrepresentation that caused damage to the plaintiffs’ goodwill and it was immaterial if the misrepresentation was subsequently corrected.
Conclusions
Judicial confirmation that initial interest confusion can lead to trade mark infringement and passing off has been long overdue. The case demonstrates that the scope of trade mark infringement is broad and that disabusing the relevant public of their initial confusion at the time the sale is made is now unlikely to avoid a finding of trade mark infringement.
In the recent decision of Och-Ziff Management Europe Ltd & another v Och Capital LLP & others, Mr Justice Arnold confirmed that “Initial Interest Confusion” is sufficient for a finding of trade mark infringement under European law.
The concept of initial interest confusion
The traditional model of trade mark infringement requires that the purchaser of goods or services is likely to be confused as to their trade origin at the time of sale. Over time, however, the courts have increasingly acknowledged the wider functions of trade marks and this has in turn lead to a broadening of this traditional model.
Initial interest confusion falls outside the scope of the traditional infringement model because it deals with confusion (or likely confusion) arising before the purchase is made. It can therefore theoretically lead to a finding of infringement in situations where the consumer ceases to be confused at the time of purchase.
The case for initial interest confusion is strongest in relation to confusing or misleading advertising or promotional materials and is frequently argued in relation to Internet advertising and the use of search engines and AdWords.
The Case
The plaintiffs owned trade mark registrations for the word marks OCH (pronounced “ock”) and OCH-ZIFF covering a range of financial services.
The defendants had made few actual sales under the trade mark OCH CAPITAL (pronounced “O-C-H- Capital”) but they had used the sign on their website to advertise their services.
The average consumer was deemed to be reasonably attentive and knowledgeable of the market and, as such, although he might be confused upon seeing the sign OCH CAPITAL on a website, any confusion would be dispelled before a sale was made due to the differing pronunciations.
The question before Mr Justice Arnold in the present case was, therefore, to what extent does the doctrine of initial interest confusion apply under European trade mark law?
The Arguments For
Article 5(1)(b) of the Trade Marks Directive states that there must be "a likelihood of confusion on the part of the public" for trade mark infringement to be found. It is not limited to confusion at any particular point and neither is actual confusion required. Initial interest confusion is still “confusion” and so it falls within the wording of the infringement provisions.
Additionally, the Directive recognises that use of a trade mark in advertising can lead to infringement – so no actual sales are required.
The Arguments Against
The majority of arguments against the doctrine focus on whether a deliberate intention is needed or if infringement can follow from innocent actions.
The majority of cases (both in the US and Europe) suggest that an intention to deceive is not necessary. However, some courts have taken the opposite view. In one US case, it was held that initial interest confusion should only lead to infringement where the defendant sought financial profit from the confusion.
OCH Capital argued that "likelihood of confusion" should be construed to mean confusion at the point of sale. They also argued that initial interest confusion should only lead to infringement if the defendants’ actions sought to take unfair advantage of, or were detrimental to, the distinctive character or repute of the plaintiffs’ trade mark (i.e. infringement under Article 5(2) of the Trade Marks Directive).
The Decision
Mr Justice Arnold took the view that initial interest confusion can amount to trade mark infringement under European law. He noted, in particular, that the Trade Marks Directive specifically mentions that advertising can lead to infringement and OCH Capital had no convincing counterargument.
The judge also held the defendants liable for passing off, on the basis that initial interest confusion amounted to a misrepresentation that caused damage to the plaintiffs’ goodwill and it was immaterial if the misrepresentation was subsequently corrected.
Conclusions
Judicial confirmation that initial interest confusion can lead to trade mark infringement and passing off has been long overdue. The case demonstrates that the scope of trade mark infringement is broad and that disabusing the relevant public of their initial confusion at the time the sale is made is now unlikely to avoid a finding of trade mark infringement.
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