Reverse confusion: a red herring or appropriate remedy?

The result was a court ruling in favor of Big O and an award of about US$5 million in damages—a hefty sum in 1977.

This was a classic case of “reverse confusion,” a situation in which the plaintiff bringing a trademark claim is either a much smaller player or its mark is less well known than the defendant’s. This often leads to consumers believing the senior user’s product is associated with the junior user. But some panelists in yesterday’s session on reverse confusion at the INTA Annual Meeting questioned whether distinguishing reverse confusion from traditional—or forward—confusion is helpful, or even fair.

“Is reverse confusion really a distinct problem?” asked Professor Roger Schechter of George Washington University. Schechter suggested it might be useful to require registration for a reverse confusion claim, or to limit monetary remedies if the senior, lesser-known mark was not registered to curb abuse, since some see reverse confusion cases as encouraging extortion or blackmail of large companies by smaller players. Should a small senior user be entitled to corner the market on a name, even where use is limited and there is no goodwill, for example, asked Rita Odin of The Estée Lauder Companies.

However, Schechter pointed out that doing away with the concept of reverse confusion would result in a negative incentive for big brands. “Larger companies would have no inhibition about taking a smaller users’ mark, so it’s wise to provide some degree of remedy or relief,” said Schechter.

Robert MacDonald of Gowlings said that Canadian and UK courts have ignored the concept of reverse confusion for the most part, sticking to the traditional tests for actual confusion. “Canadian courts have said we’re not interested,” said MacDonald.