By Jeff Pietsch
Last week, a United States District Court for the Eastern District of Missouri denied a motion by Intel to dismiss a declaratory judgment suit brought by Express Scripts Inc. Since last February, Express Scripts has been marketing some of its health care and pharmaceutical consulting services under the trademark “Intellact.” Shortly thereafter, Express Scripts received a cease and desist letter from Intel claiming that Express Scripts’ “Intellact” trademark infringed on Intel’s trademark rights. Intel specifically stated that the “Intellact” trademark would likely deceive or confuse consumers as to the source of the goods, namely that consumers would believe “Intellact” was affiliated with Intel. According to the suit filed by Express Scripts for declaratory judgment, Intel claims that it owns “all rights to names that contain the root of the word ‘intelligent.’” This article will examine trademark infringement in light of Express Scripts’ request for declaratory judgment.
Trademark infringement occurs when a third party uses a mark in a way that infringes upon a trademark owner’s exclusive right and use of a trademark. Often, the third party will use a similar mark in a way that confuses consumers as to the source of the goods and services. For example, a fast food restaurant named “Wendi’s” would likely cause confusion with “Wendy’s.” Trademark infringement can occur only when it is likely that consumers will be confused as to the source of the goods.
Many courts have developed a balancing test to determine if a mark infringes on another. This balancing test has largely grown from the seminal case Polaroid Corp. v. Polarad Elect. Corp., 287 F.2d 492 (2nd Cir. 1961). In that case, the court identified several variables to consider when assessing if a mark is infringing on another mark. This balancing test seeks to determine if consumers would likely be confused as to the source of the marks. If the test finds that confusion would likely result, then the court will likely rule that infringement exists. On the other hand, if confusion is unlikely or minimal, the court will likely rule against infringement.
The first factor the court looks at is the strength of the marks in question. The strength of the marks is determined by distinctiveness of the mark. The more unique and distinct the mark, the more likely the mark will be protected against junior users. On the hand, the more descriptive and generic the mark, the less protection courts will provide to these marks. For example, the mark KODAK will receive more protection than a similar product that uses the mark FAST PHOTO.
Another factor examined is the similarity between the marks. Similarity of marks is tested based on sight, sound and meaning. The marks will be considered in their entirety to determine any similarities. A mark that looks different from another but gives off a similar commercial impression might be considered similar and thus weigh in favor of confusion. For example, a trademark that consisted of the word MONEY might be confused with the mark $$$ because the marks have similar commercial impressions.
The courts will also look at the proximity of the goods in the marketplace. This test relates to the channels of trade used by the goods. The more related the goods the greater the likelihood that they would exist together in the marketplace. Similar marks that are also are related would likely cause confusion as to the source of those goods. Highly related goods are more likely to cause confusion compared to unrelated goods.
The above three factors weigh heavily in determining likelihood of confusion. A mark will not be found confusingly similar with another mark if the two are not found similar in one of these areas, and the complaining mark is considered a weak mark.
After reviewing these, the courts will examine the likelihood that the prior owner will “bridge the gap” in the marketplace. This factor addresses the possibility that a mark will expand into other product lines. The more likely expansion will occur, the more likely consumer confusion will exist.
Next the courts examine evidence of actual confusion. When a case is brought to trial, the evidence is usually in the form of consumer surveys done by the parties. Survey evidence of this nature is often critical in determining likelihood of confusion in infringement cases.
The courts will also look to the sophistication of the buyers of the goods or services to determine likelihood of confusion. Courts have found that sophisticated buyers, such as those who have expertise in a specific area, are less likely to be confused by similarities in marks. In addition, courts have held that consumers of goods and services that are expensive exercise a higher degree of care in making these expensive purchasers. For example, a consumer would exercise a higher degree of care when purchasing a car compared to when that consumer purchases a piece of candy.
The last factor courts examine in a trademark infringement case is the intent of the defendant. If the defendant copies an existing trademark in bad faith to capitalize on that trademark’s goodwill, the courts will lean in favor of finding infringement. The likelihood of confusion, however, is the main consideration in determining infringement regardless of intent. If an individual copies a mark that does not lead to consumer confusion, the courts will likely not find infringement.
The above are not a rigid set of factors used by the courts. Most jurisdictions use some form of the above factors to determine if a likelihood of confusion exists. Regardless of the different variations, courts ultimately are seeking to discover if marks, as they are used in commerce, cause consumer confusion and lead to trademark infringement.
In order to win its case against Express Scripts’, Intel needs to show the balance of the factors leads a consumer to be confused as to the source of the goods. This may be a difficult proposition, because the marks “Intel” and “Intellact,” although having the same root word, are different enough to possibly avoid consumer confusion. When you take in account that the goods sold under the trademarks are also not similar, Intel will need to show that actual confusion by consumers has taken place. If Intel is unsuccessful with showing actual confusion, the court will likely find that “Intellact” does not infringe on Intel’s trademark.