When Business Names Confuse Consumers: The Basics of Trademark Law
Last month, a Florida judge granted an injunction against health club "FIT U" after rival club "YOU FIT" sued for trademark infringement.
A trademark is a brand indicator, letting consumers know the source of a good or service. Therefore, whether a consumer is (or could be) confused as to the origin of a product or service, is a key consideration in trademark lawsuit cases.
To determine whether consumers were confused (or were likely to be confused) by the businesses' names, the court considered seven factors. From there, the court performed a balancing test to decide whether the mark weighed in favor or against consumer confusion.
Here are the factors that they weighed that you might want to consider when naming your business:
1. The strength of the mark.
In trademark law, a business's trademark (the name word, symbol or design that identifies the business, product or service) is referred to simply as a mark. Marks range from weakest to strongest: generic, descriptive, suggestive and arbitrary. The stronger the mark, the more protection it receives under trademark law. For example, a generic mark like aspirin receives very little protection (because it's so widely used to mean many types of pain relief medications), while an arbitrary mark like Apple for computers (where the connection between the name and product isn't clear) receives more protection.
In this case, the court noted that the word "fit" had multiple meanings, and consumers would need to make an "imaginative leap" to associate the mark with a health club.
2. Commonality of the marks.
Whether a mark is commonly used by third parties is another consideration. In this case, the defendant submitted to the court a list of similar trade names with the words "You" and "Fit" used by businesses in several states. (The defendant also submitted a list of 4,342 trademarks registered with the U.S. Patent & Trademark Office with the word "Fit" in them as additional evidence.)
This factor helps the case against a finding of confusion, because the mark is "weakened" by the broad use of the words by other businesses.
3. Proof of actual confusion.
A Yelp review expressing confusion about the two gyms convinced the court that the potential for confusion existed, which weighed in favor of a likelihood of confusion.
4. Similarity of the marks.
"YOU FIT" and "FIT U" are very similar marks, in both sight and sound. In addition, both marks were used to market health clubs, further adding to potential confusion.
5. Similarity of services, service outlets and customers.
The court noted that both businesses were health clubs targeting the same customers: young, independent and frugal individuals. The court found the similarity of the marks in sight and sound, as well as the businesses were offering the same services, namely, health clubs, weigh in favor of a likelihood of confusion among consumers.
6. Similarity of the parties' advertising media.
Where the businesses advertise (television, newspaper, etc.) and their websites are factors courts generally consider, however, in this case, the evidence didn't favor either party, so this point was neutral for both parties.
The court said there wasn't enough evidence in the record to evaluate the parties' advertising media. In other cases, for example, a court could compare the businesses' websites (whether they are similar in design and color), and whether they run ads on television or radio, etc.
7. Defendant's intent.
A defendant's intent to cause confusion among consumers or copy another business is generally considered, however, the court couldn't find intent here so the factor was neutral.
A classic example of intent is when a business is either aware of infringing activity or is willfully blind to it. For example, a retailer was found liable for trademark infringement in January for importing and selling counterfeit Fendi bags. The trial court awarded Fendi more than $12 million in damages because the infringement was willful.
The court balanced the seven factors, finding that four weighed in favor of a likelihood of confusion among consumers, and issued an injunction against FIT U from using the mark in connection with the sale of goods or services.