Confusion isn't everything.

AuthorMcGeveran, William
PositionTrademark confusion - Introduction into II. What's Wrong with This Picture? p. 253-277

The typical shorthand justification for trademark rights centers on avoiding consumer confusion. But in truth, this encapsulation mistakes a method for a purpose: confusion merely serves as an indicator of the underlying problems that trademark law seeks to prevent. Other areas of law accept confusion or mistake of all kinds, intervening only when those errors lead to more serious harms. Likewise, every theory of trademark rights considers confusion troubling solely because it threatens more fundamental values such as fair competition or informative communication. In other words, when it comes to the deep purposes of trademark law, confusion isn't everything.

Yet trademark law's structure now encourages courts to act otherwise, as if confusion itself were the ultimate evil with which trademark law is concerned and as if its optimal level were zero. Trademark adjudication increasingly fetishized confusion over the last half century while simultaneously expanding its scope to cover dramatically more situations. As a result, trademark rights conflicted more frequently with open markets and free speech. Even when special doctrines developed to protect those values, they tended to devolve back into confusion analysis. In many situations--often including examples such as trade dress, comparative advertising, or uses in expressive works--competing values get short shrift from a framework preoccupied with eradicating confusion of any description.

This Article analyzes causes of this phenomenon, problems that result, and possible cures. It begins with a historical analysis demonstrating how the growth of confusion reasoning overwhelmed inherent limits on trademark rights that once protected competition or communication values. It then explains the resulting damage. Sometimes courts penalize socially valuable but unlicensed uses of marks; even when they probably would not find the uses infringing, the high administrative costs imposed on defendants discourage such uses. Finally, the Article proposes a better alternative. Courts should identify categories of cases implicating competition or communication values at the outset of litigation and should handle them differently than ordinary cases. Sometimes courts should simply ignore confusion when enforcing trademark rights would cause too much damage to other values. In other cases, they should distinguish between types of confusion; when balanced against important competing values, minimal or temporary confusion need not be given the same weight as outright deception that diverts trade. Our recommended approach offers stronger and earlier protection for competition and communication. It also puts confusion detection back in its proper place--not as the ultimate purpose of trademark law, but its tool.

INTRODUCTION

Ask any law student to describe the purpose of trademark law and you're likely to get a simple answer: preventing consumer confusion. Indeed, you'd likely get the same simple answer from most trademark lawyers. Following in this path, courts tend to view confusion itself as the ill that trademark law seeks to cure and to assume that the optimal level of confusion is always zero. Both these propositions are wrong. The resulting errors undermine important values, such as fair competition and effective communication, which should lie at the heart of trademark law's protection.

The first proposition mistakes trademark law's mediate purpose for its ultimate purpose. Consumer confusion is but a symptom of the disease targeted by trademark law. Confusion ought to serve as a heuristic device to identify situations where certain bad consequences may follow, including diversion of trade and distorted purchasing decisions. (1) A small amount of confusion does not inevitably cause problems, and it might even prove beneficial in some cases where it serves as a prelude to greater understanding (which, as we repeatedly tell our first-year law students, it often does). Increasingly, however, courts have come to see elimination of consumer confusion itself as the alpha and omega of trademark law.

This trend has increased ever since courts began developing multi-factor tests for "likelihood of confusion" to measure infringement. (2) The Lanham Act now expressly identifies "confusion" as a basis for liability. (3) And the scope of that confusion, and therefore of trademark rights, has expanded radically. Courts (and later Congress) steadily added to the types of actionable confusion: concerning more relationships (such as "sponsorship or affiliation"); in connection with more protectable subject matter (such as product packaging and design); and beyond the point of sale (such as initial interest or post-sale confusion). (4) This inexorable growth brought trademarks into much more frequent conflict with previously acceptable uses--often uses that serve other crucial values of a well-functioning trademark system.

The singular focus on confusion eventually displaced previous understandings of a trademark's purpose. (5) By 2013, experienced judges on the Second Circuit thought they were underscoring the absurdity of a fair use test applied by the district court when they pointed out that it "would lead to the dismissal of these claims without addressing what is beyond doubt the central question in considering consumer confusion: whether consumers were actually confused by the allegedly infringing product." (6) Not only is this holding tautological, it assumes that every trademark case must turn on confusion. When it comes to the deep purposes of trademark law, however, confusion isn't everything.

The second error noted above--that the law always should strive to eliminate all confusion entirely--is related to the first. Courts routinely interpret statutory requirements by considering the classic question of the "mischief sought to be avoided" by the law. (7) This is especially so in an open-ended statute like the Lanham Act that delegates interpretive authority to the courts. (8) But if the mischief to be avoided by trademark law is confusion itself, courts understandably reason, then surely they should stamp it out whenever it appears. (9) This habit persists despite contrary indications in trademark doctrine. In a case involving descriptive fair use, the Supreme Court explicitly held that "some possibility of consumer confusion must be compatible with fair use." (10) Functionality doctrine similarly disregards confusion when its requirements are otherwise satisfied. (11)

This wisdom is not woven into the fabric of trademark law very well, however. Almost every so-called "defense" in trademark law relies in the end on the absence of confusion rather than the presence of important alternative values. (12) And the expansive definition of confusion means markholders often can claim some malign influence on consumers. We suggest historical reasons for this doctrinal circularity below. (13) Whatever the explanation, however, contemporary courts lack tools to consider values other than confusion because they understand the elimination of all confusion to be the task at hand.

This Article tackles both of these related misunderstandings of consumer confusion in trademark law: the supposed role of confusion as the law's sole driving purpose and the imperative to reduce it to zero. We trace the development of the preoccupation with confusion, demonstrate its negative consequences, and suggest avenues for reform.

We begin with history. Why do so many courts and other actors see elimination of consumer confusion as the primary (perhaps even the sole) mission of trademark law? Part I describes how courts traditionally relied on the inherent limits of more narrowly defined trademark rights to protect socially beneficial uses of a mark, obviating the need for special doctrines. We then show how those inherent limits eroded over time with the expansion of rights. Trademark adjudication increasingly fetishized confusion over the last half century while simultaneously expanding the scope of that concept to cover dramatically more situations. These changes created more conflicts between confusion and other values, yet left trademark law without the capacity to adjudicate those conflicts efficiently.

We then elaborate on the problems caused by this state of affairs. Part II identifies other values, particularly fair competition and open communication, which can be threatened by trademark structures overly reliant on eradicating confusion. It also explains how courts' attempts to articulate new limits on the scope of trademark rights largely failed because they recursively relied on assessments of the now-overgrown confusion concept. Cases involving socially valuable, but unlicensed, uses of marks present two distinct problems. First, current doctrine submerges the other values and perpetuates the notion that preventing consumer confusion is itself the aim of trademark law. In response, courts tend systematically to overweigh confusion, which...

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