Sophistication, Bridging the Gap, and the Likelihood of Confusion: An Empirical and Theoretical Analysis

Posted: 22 Dec 2008

See all articles by Thomas R. Lee

Thomas R. Lee

Government of the State of Utah - Utah Supreme Court; Brigham Young University - J. Reuben Clark Law School

Date Written: December 22, 2008

Abstract

Although the likelihood of confusion test is of central importance to trademark law, the test has not been subjected to extensive scholarly analysis. The courts rarely evaluate the consumer confusion inquiry in the light of specific and persuasive evidence about consumer behavior, relying instead on precedent built on personal intuition and subjective, internalized stereotypes. And even the academic commentary is surprisingly bereft of careful scrutiny of the test. This article offers such scrutiny with respect to two factors at the center of the doctrinal debate in the courts: the relative sophistication of consumers in the relevant market and the likelihood that the senior trademark holder may bridge the gap to bring itself in closer competition with the junior user. With respect to both of these factors, there are important points of conflict in the case law. The conflicts go to such fundamental questions as (a) whether (and when) a sophisticated consumer might sometimes be more likely to be confused - the effect opposite of that almost unanimously predicted in the case law; and (b) whether (and how) a senior trademark holder can demonstrate an increased likelihood of confusion based on its plans to extend its brand to a new market.

Section I summarizes the state of the law on the sophistication and bridging the gap factors, setting the stage for the need for careful analysis of conflicts that are currently plaguing the courts. Section II describes a theoretical model for understanding the role of these factors in the likelihood of confusion analysis. In this section, we develop models derived from consumer psychology literature in an attempt to inject some coherence into the empty debate that marks the case law. Finally, in Section III, we introduce and describe an empirical study aimed at measuring the relative significance and interactions between these two factors.

Our theoretical model and empirical study support the hypothesis that the likelihood of consumer confusion is increased when a competitor of the senior trademark holder has bridged the gap to come into competition with the junior user. Thus, our analysis supports the view adopted by a minority of the federal circuits (five of thirteen)-that the prospect for gap-bridging is relevant to the likelihood of confusion. Our study also informs the debate in the case law as to the method of proving the likelihood of bridging the gap. Specifically, our findings support a consumer-centric approach to bridging the gap instead of a manager-centric one. Whatever makes a brand extension by the senior mark more plausible in the eyes of consumers will increase the likelihood of confusion - regardless of whether managers of the senior mark actually intend to bridge the gap into the new market.

Perhaps more significantly, we show that a more sophisticated consumer is more likely to suffer confusion in these circumstances. The case law is marked by a rather vacuous conflict between the widely invoked presumption that sophistication usually militates against a finding of a likelihood of confusion and the occasional - and precisely opposite - qualification that it might on occasion increase the likelihood of confusion. Our findings identify one particular circumstance in which the occasional qualification holds and the usual presumption fails. Our theoretical analysis also explains the basis for this phenomenon, and thus a ground for informing the judicial consideration of when to apply the presumption and when to invoke the qualification. Finally, we offer some empirical analysis of some of the law's proxies for sophistication, finding that education and consumer experience (but not income, age, or gender) are meaningful predictors of consumer care.

Suggested Citation

Lee, Thomas R., Sophistication, Bridging the Gap, and the Likelihood of Confusion: An Empirical and Theoretical Analysis (December 22, 2008). Available at SSRN: https://ssrn.com/abstract=1319188

Thomas R. Lee (Contact Author)

Government of the State of Utah - Utah Supreme Court ( email )

450 South State Street
Salt Lake City, UT 84114
United States

Brigham Young University - J. Reuben Clark Law School ( email )

519 JRCB
Brigham Young University
Provo, UT 84602
United States

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