effective use of surveys in trademark litigation in 2014 live webcast

Speaker Firms and Organization:

Winthrop & WeinstineBradley WalzShareholder

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Presented By:

August 21, 2014

1

Partner Firms:

Goldman Sloan Nash & Haber LLPJohn S. McKeown

Counsel

NERA Economic ConsultingSarah Butler

Vice President

Proskauer Rose LLPBrendan O'Rourke

Partner

August 21, 2014

2

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Partner Firms:

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NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying quantitative principles to complex business and legal

challenges. For over half a century, NERA's experts have been creating strategies, studies, reports, expert testimony, and policy recommendations

for government authorities and the world’s leading law firms and corporations. NERA brings academic rigor, objectivity, and real world

industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

Clients value NERA’s ability to apply and communicate state-of-the-art approaches clearly and convincingly, NERA’s commitment to deliver

unbiased findings, and its reputation for quality and independence. With its main office in New York City, NERA serves clients from more than 25 offices

across North America, Europe, and Asia Pacific.

Winthrop & Weinstine, P.A., is a dynamic and growing law firm focused on building strong client relationships through responsiveness, innovation and

creativity. The firm enjoys steady growth by meeting the diverse needs of its clients from individuals and emerging-growth businesses to Fortune 500 companies in an impressive array of industries throughout the Twin Cities

and nationally.

Partner Firms:

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Proskauer is a global law firm with 700+ lawyers active in major markets worldwide. Our nationally-recognized and interdisciplinary Intellectual

Property practice is a high end practice with particular strength in trademarks, advertising, patents and copyrights. In 2014, we were one of a select group of firms named in the National Law Journal’s annual “IP Hot

List.” We have also been named a “Go-To Law Firm®” for Intellectual Property, one of an “exclusive group of firms that deliver exceptional work for

the FORTUNE 500®,” according to publisher American Lawyer Media. We are ranked Tier 1 by Chambers for our Advertising Litigation Practice. We are recognized not only for our legal excellence, but also our dedication to

client service.

For more than 35 years, Goldman Sloan Nash & Haber (GSNH) LLP has helped leading businesses, entrepreneurs and individuals successfully

navigate the maze of corporate & commercial law to help protect and grow their businesses. Our mid-sized law firm is based in downtown Toronto,

Ontario, Canada and provides advice across all major practice areas including Intellectual Property. As a mid-sized law firm, we are committed to

providing the personalized service of a boutique law firm with the sophistication of a larger law firm.

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Brief Speaker Bios:

Sarah Butler

Sarah Butler is a Vice President in NERA’s Surveys and Sampling Practices and an expert in survey research, consumer behavior, market research, statistical analysis, and sampling. She has applied her expertise in a wide range of litigation cases and has testified in bench and jury trials. In intellectual property matters, she has offered testimony related to trademarks and trade dress and has presented surveys on issues of likelihood of confusion, secondary meaning, genericness, and dilution. She has also designed and implemented surveys in class action matters evaluating consumer perceptions of claims. In class action cases, Ms. Butler has submitted and reviewed evidence related to the impact of representations on consumer’s willingness to pay for products. Ms. Butler’s work includes numerous cases related to online shopping and consumer perceptions and use of e-commerce and social media.

August 21, 2014

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Bradley Walz

Bradley Walz is a shareholder in Winthrop & Weinstine’s intellectual property group. He is deeply experienced in all aspects of trademark and copyright law including trademark opposition and cancellation proceedings before the Trademark Trial and Appeal Board and with trademark, unfair competition, copyright, and cybersquatting litigation in federal district court. In addition, he represents technology companies on a broad range of complex and strategic legal and business matters relating to cloud computing, software development and distribution, open source software, and data security and privacy.

Mr. Walz has been recognized as a “Rising Star” by Super Lawyers, and is a frequent author, speaker and lecturer on trademark and cloud computing issues.

Brief Speaker Bios:

Brendan O'Rourke

Brendan O'Rourke is a nationally recognized Trademark and Advertising litigator. He is partner and co-chair of Proskauer’s Litigation Department, as well as co-head of the False Advertising & Trademark Group. Brendan is a “go to” first-chair trial lawyer who has as much trial experience in the Trademark and False Advertising field as any top lawyer in the country. He provides day-to-day trademark, false advertising, and Lanham Act counseling to Fortune 500 companies, sports & entertainment industry clients, as well as start-ups and entrepreneurs. His experience includes all phases of trademark and false advertising counseling and litigation, including complex issues involving consumer survey research and claim substantiation, and inter parties proceedings before the U.S. Trademark Trial and Appeal Board and the Federal Circuit. Brendan is recognized by Chambers USA for both his trademark and advertising litigation practice, and Institutional Investor Magazine’s Benchmark Litigation survey recognized Brendan as one of New York State’s “litigation stars.” He has chaired INTA's Leadership Meeting, Advanced Forum on the Trademark Law and Revisions Act, INTA's third annual "Trademarks in Cyberspace" forum, and other prominent trademark law conferences. Brendan received his JD from Fordham University School of Law and his BA, cum laude, from Boston College.

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John S. McKeown

John focuses on providing advocacy and advice concerning intellectual property and related matters, including protecting trade marks, copyrights, patents, confidential information and misleading advertising claims under the Competition Act. He is certified by the Law Society of Upper Canada as a specialist in Intellectual Property Law (Trade Marks/Copyright). He is currently the Chair of the Canadian Bar Association Trademarks Committee.

John is the author of two textbooks dealing with trademarks, Brand Management in Canadian Law (1st Edition, 2004; 2nd Edition, 2006; 3rd Edition, 2010) and Canadian Intellectual Property Law and Strategy: Trademarks, Copyright and Industrial Designs. (A 2nd edition was published in September, 2013).

► For more information about the speakers, you can visit: http://theknowledgegroup.org/event_name/effective-use-of-surveys-in-trademark-litigation-in-2014-live-webcast/

http://theknowledgegroup.org/event_name/effective-use-of-surveys-in-trademark-litigation-in-2014-live-webcast/

http://theknowledgegroup.org/event_name/effective-use-of-surveys-in-trademark-litigation-in-2014-live-webcast/

Use of surveys in trademark litigation has been identified as significant tool in knowing how the purchasing public perceives a mark and is an effective tool in helping attorneys navigate trademark cases faced by their companies and clients.

The Knowledge Group has assembled a team of distinguished professionals who will help you understand the most important aspects of surveys in trademark litigation. A panel of key thought leaders will present their findings and best practices in a two-hour live webcast.

This program follows and builds on the popular webcast presented in 2013.

August 21, 2014

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Featured Speakers:

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SEGMENT 1:

Sarah ButlerVice PresidentNERA Economic Consulting

SEGMENT 2:

Bradley WalzShareholderWinthrop & Weinstine

SEGMENT 3:

Brendan O'RourkePartnerProskauer Rose LLP

SEGMENT 4:

John S. McKeownCounselGoldman Sloan Nash & Haber LLP

Introduction

Sarah Butler is a Vice President in NERA’s Surveys and Sampling Practices and an expert in survey research, consumer

behavior, market research, statistical analysis, and sampling. She has applied her expertise in a wide range of litigation

cases and has testified in bench and jury trials. In intellectual property matters, she has offered testimony related to

trademarks and trade dress and has presented surveys on issues of likelihood of confusion, secondary meaning,

genericness, and dilution. She has also designed and implemented surveys in class action matters evaluating consumer

perceptions of claims. In class action cases, Ms. Butler has submitted and reviewed evidence related to the impact of

representations on consumer’s willingness to pay for products. Ms. Butler’s work includes numerous cases related to online

shopping and consumer perceptions and use of e-commerce and social media.

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SEGMENT 1:


Why Survey Evidence?

In cases of trademark infringement, unfair competition and false advertising:

“…the perceptions of large groups of ordinary people are key factual issues...”

“…‘direct’ evidence…can consist of a survey of the perceptions of a sample of the relevant customer group…”

“…a large body of legal literature has developed around the subject of surveys in trademark and false advertising cases…”

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SEGMENT 1:


Source: McCarthy on Trademarks and Unfair Competition,Fourth Edition, Chapter 32:158 (September 2012)

Principles of Good Survey Design

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SEGMENT 1:


Definition of the Population

Target audience – buyers, decision makers, influencers

Different populations have different levels of sophistication

Past vs. potential buyers vs. third party observers

Whose perceptions are material to the legal claims at issue?

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SEGMENT 1:


Finding the Population

What techniques will be used to represent the perceptions of the population?

A survey is a sample of the total population.

Representative of the relevant population

Probability vs. nonprobability

Matching demographics of target population

Under- vs. over-inclusive samples

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SEGMENT 1:


Mode of Data Collection

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SEGMENT 1:


Intercept Online Panel Phone

Large population available

Maybe Yes Maybe

High incidence Maybe Maybe Maybe

Good response rate NA Yes No

Can show stimuli Yes Yes No

Statistically representative

No No* Maybe

Efficient Maybe Yes No

Target specific population

Maybe Maybe Maybe

Validation Yes Maybe No

Test Stimuli

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SEGMENT 1:


Single vs. multiple products

Real product vs. pictures/video

Realism and replicating market place conditions

Control Stimuli

Single vs. multiple products

Real product vs. created product

Isolating what is being tested

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SEGMENT 1:


Questions Asked

Open ended versus close ended

Full filter, partial filter, none

The “reading” versus “memory” test dilemma

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SEGMENT 1:


Analysis

Who is in the denominator?

Coding (and relying on) verbatim responses

Margins of Error

Don’t ask questions you don’t need

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SEGMENT 1:


Dueling Experts

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SEGMENT 1:


• Requires time and money• Open to criticism• Risk of wrong answer• “Pox on both your houses”

• Test own theories of case• Replication can demonstrate bias• Weakness of rebuttal alone

Introduction

Bradley Walz is a shareholder in Winthrop & Weinstine’s intellectual property group. He is deeply experienced in all

aspects of trademark and copyright law including trademark opposition and cancellation proceedings before the Trademark

Trial and Appeal Board and with trademark, unfair competition, copyright, and cybersquatting litigation in federal district

court. In addition, he represents technology companies on a broad range of complex and strategic legal and business

matters relating to cloud computing, software development and distribution, open source software, and data security and

privacy.

Mr. Walz has been recognized as a “Rising Star” by Super Lawyers, and is a frequent author, speaker and lecturer on

trademark and cloud computing issues.

August 21, 2014

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SEGMENT 2:


When is a survey useful?

• A survey is useful when there are issues that might be amenable to survey evidence. In general, surveys can be useful in attempting to measure:

– likelihood of confusion;

– secondary meaning;

– genericness, and

– in the context of dilution claims, fame and likelihood of dilution.

• A survey can be useful during the prosecution of trademark applications especially if an ex parte appeal to the Trademark Trial and Appeal Board is anticipated.

• A survey is useful when the amounts at stake for the client outweigh the cost of the survey.

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SEGMENT 2:



• A survey is useful when it will produce the desired results.

– This requires an educated guess because the survey has not been conducted. Your survey expect to help make this assessment. You need to expect a 20% or greater confusion rate or recognition rate. E.g., Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786 (5th Cir. 1983).

– If time and budget allow, a pre-test can help assess the likely success of the survey.

○ A pre-test is an initial execution of the survey itself, but with fewer than the total number of interviews that will be done for the full survey so that meaningful trends in responses can be detected. Pre-tests can be useful when it is uncertain whether one method or design will produce the best results, or when it is unclear whether the survey will be usable at all.

○ If your survey expert is involved in conducting the pre-test, then the results will be discoverable. You should conduct the pre-test with a non-testifying expert to preserve the work product protection.

○ Alternatively, you can ask your survey expert for the “top line” results from the full survey. For example, you may get the results from the first 30 interviews, then the next 30, etc. This slows the survey process down, but allows you to spot any trends in the responses. If the survey starts going sideways, you can stop the survey before the full cost of the survey is incurred. At this point, you can treat the first survey as a pilot, and use a second survey expert correcting for the problems in the first survey.

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SEGMENT 2:



• A survey is useful when not having one could result in an adverse inference.

– Several courts have drawn negative inferences from the absence of a survey, taking the position that failure to undertake a survey may suggest that a properly conducted survey would not support the party’s position. E.g., Ortho Pharm. Corp. v. Cosprophar, Inc., 32 F.3d 690, 695 (2d Cir. 1994); Henri’s Food Prods. Co. v. Kraft, Inc., 717 F.2d 352, 357 (7th Cir. 1983); Medici Classics Productions, LLC v. Medici Group LLC, 590 F.Supp.2d 548, 556 (S.D.N.Y. 2008); Chum Ltd. v. Lisowski, 198 F.Supp.2d 530 (S.D.N.Y. 2002).

– However, some courts expressed concerns about survey evidence and have held there is no presumption against confusion from not having a survey. E.g., Indianapolis Colts v. Metro. Baltimore Football, 34 F.3d 410, 416 (7th Cir. 1994); Frehling Enterprises v. Int’l Select Group, 192 F.3d 1330, 1341 n. 5 (11th Cir. 1999).

• A survey is useful when the opposing party conducts a survey.

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SEGMENT 2:


When is a survey not useful?

• In the likelihood of confusion analysis, a survey is not useful when you have strong evidence on the other likelihood of confusion factors.

– In a majority of the judicial circuits and with the Trademark Trial and Appeal Board, the similarity of the marks and overall strength of the senior user’s mark are the most persuasive factors.

– On the other hand, if these factors are in your favor, then positive survey results could be the final nail in the coffin.

– Cost of the survey outweighs the amount at stake for the client.

– Survey results show less than 20% confusion rate or recognition rate.

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SEGMENT 2:


Rolling up your sleeves and working with survey experts

• Be hands on throughout the process, and don’t assume the survey expert has all the answers.

• Critically, your role is to inform the survey expert about the marketplace reality of the marks at issue and to probe the survey methodology and design chosen by the survey expert to ensure it approximates the marketplace reality.

• Although Rule 26 protects the attorney’s work product, mental theories, or impressions, discovery may be had of the expert’s opinions, including the factual foundations for the opinions. This means for example that the expert's testing methods (those used and any alternatives not used), and the expert's communications with persons other than the attorney are all still subject to inquiry. The limitations on discovery of attorney communications is also not a blanket limitation. If the communications relate to the expert's compensation, identify facts, or data that the attorney provided and the expert considered in forming his or her opinions, or the attorney provided certain assumptions that the expert relied on in forming his or her opinions, discovery of these limited topics is allowed.

• Give some consideration to how you communicate with the survey expert.

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SEGMENT 2:



• Considerations when designing the survey.

– Selecting the right methodology

○ Ever Ready format (infringing mark shown, then open ended questions asked)

» Best for a commercially strong mark. Weak marks will produce negligible estimates of confusion

○ Squirt format (infringing mark shown, then an array of marks are shown and open ended questions are asked about the marks in the array)

» Best for weak marks.

» Susceptible to demand effects.

» Requires the selection of an appropriate control mark

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SEGMENT 2:



○ Going both ways format (combines the estimate of market reality of the Ever Ready format with the estimate of mark similarity of the Squirt format by asking about the prior awareness of the senior user’s mark following the array of marks)

» Best for situations when there is uncertainty about the commercial strength of the senior user’s mark.

» There is judicial suspicion of survey methodologies that are variants of traditional designs.

○ Other formats. Before adopting, take a hard look.

– Be realistic. The goal is to make the survey as impervious to criticism as possible, not "bulletproof. Survey design is a process of making trade-offs, and choosing the most defensible or least objectionable of various options, all of which are usually subject to attack on one ground or another.

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SEGMENT 2:



• Considerations when selecting a control.

– The general principle for choosing an appropriate control is that it should share as many characteristics with the experimental stimulus as possible, with the key exception of the characteristic whose influence is being assessed.

– Accordingly, do not leave it up to the survey expert to select the control.

– Additionally, real world controls are more persuasive than a manufactured control.

– Four features that characterize a good control stimulus:

○ Shares features with the allegedly infringing mark other than those alleged to be infringing;

○ It does not contain cues that will artificially depress confusion responses by leading the respondent in another direction;

○ It should appear to be a plausible member of the same product category; and

○ It should not itself be an infringing mark.

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SEGMENT 2:



• Considerations when defining the universe.

– The relevant universe of respondents is directly tied to the legal issue in dispute

○ Forward confusion – the junior user’s consumers are the relevant universe of respondents.

» Why? Because in cases alleging forward confusion, what is at issue is whether the junior user’s mark is likely to confuse consumers.

○ Reverse confusion – the senior user’s consumers are the relevant universe of respondents.

» Why? Because in cases alleging reverse confusion, what is at issue is whether consumers would mistakenly believe that the senior user’s goods or services are made or sponsored by the junior user.

○ Post-Sale confusion – the general public is the relevant universe of respondents.

» Why? Because when confusion occurs post sale, anyone that has an opinion relevant to the litigation is a potential or actual purchaser of both goods or services.

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SEGMENT 2:


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Please note these are just a few ways our experts can help with your Business Process Outsourcing needs. If you have a project not specifically listed above please contact us to see if we can help.

Introduction

Brendan O'Rourke is a nationally recognized Trademark and Advertising litigator. He is partner and co-chair of Proskauer’s

Litigation Department, as well as co-head of the False Advertising & Trademark Group. Brendan is a “go to” first-chair trial

lawyer who has as much trial experience in the Trademark and False Advertising field as any top lawyer in the country. He

provides day-to-day trademark, false advertising, and Lanham Act counseling to Fortune 500 companies, sports &

entertainment industry clients, as well as start-ups and entrepreneurs. His experience includes all phases of trademark and

false advertising counseling and litigation, including complex issues involving consumer survey research and claim

substantiation, and inter parties proceedings before the U.S. Trademark Trial and Appeal Board and the Federal Circuit.

Brendan is recognized by Chambers USA for both his trademark and advertising litigation practice, and Institutional

Investor Magazine’s Benchmark Litigation survey recognized Brendan as one of New York State’s “litigation stars.” He has

chaired INTA's Leadership Meeting, Advanced Forum on the Trademark Law and Revisions Act, INTA's third annual

"Trademarks in Cyberspace" forum, and other prominent trademark law conferences. Brendan received his JD from

Fordham University School of Law and his BA, cum laude, from Boston College.

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SEGMENT 3:


Likelihood of Confusion: Eveready or Squirt?

The Eveready Test

• Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366 (7th Cir. 1976).

• Method: shown defendant’s product, then removed (sometimes) Open-ended questions:

“Who makes or puts [this] out?” and “Why do you say that?” Closed-ended questions:

“Do you believe that whoever makes or puts this out: is [or is not] sponsored or approved by another company; or you don’t know or have no opinion?”

[If (1)] “What other company? [and] Why do you say that?” Permission questions

• Strength: closer to market reality; has been called the “gold standard”

• Limitation: some argue its efficacy diminishes with marks that are not well known

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SEGMENT 3:


Likelihood of Confusion: Eveready or Squirt?

The (Modified) Squirt Test

• Squirt Co. v. Seven-Up Co., 628 F.2d 1086 (8th Cir. 1980).

• Stimulus: first shown plaintiff’s product then shown array of products in the same category, including defendant’s

• Questions: “Do you think that any of these brands come from or are affiliated with the same maker or company as the

product I showed you [first]?” [If yes,] “Which brand or brands do you believe are from the same company or are affiliated? [and] Why do

you say that?”

• Strengths: Can be used for weaker marks Some argue it is a closer estimate of brand similarity by putting senior mark at top of mind

• Limitations: Critiqued as leading (a memory test) Some argue its efficacy diminishes if marks do not appear proximately in the market Some argue it is hard to justify if plaintiff’s mark is well known

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SEGMENT 3:


Dilution

• Two principal harms: Blurring Tarnishment

• Blurring Impairment of the distinctiveness of a famous mark by association with another similar mark. 15.

U.S.C. § 1125.

• Tarnishment Reputation of a famous mark is harmed through association with another similar mark. 15. U.S.C.

§ 1125.

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SEGMENT 3:


Dilution Surveys: Methodology

• Association Tests (most common) Stimulus:

Shown defendant’s product Questions:

“What do you think of when you see [or hear the name of] this product?” “Do you associate this product with anything else?”

Theory: Association evidences dilution

Critique: Fact that defendant’s mark calls to mind the plaintiff’s mark does not necessarily mean that

the association causes dilution.

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SEGMENT 3:


Perfumebay.com, Inc. v. eBay,Inc.,506 F.3d 1165 (9th Cir. 2007)

• State dilution claim (essentially same standards as federal law, but need to be famous in California or a part of California)

• Telephone survey: Asked respondents to assume were shopping online and encountered website using “bay” as part

of its URL / name. “What if anything comes to mind?”

• 52% of California sample and 64% nationwide responded with “eBay”

• Ninth Circuit: found likelihood of dilution, mentioned evidence of consumers’ association with the “bay” suffix, but did not expressly mention the survey

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SEGMENT 3:


Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97 (2d Cir. 2013)

• Starbucks’ telephone survey asked participants: “What is the first thing that comes to your mind when you hear the name ‘Charbucks,’ spelled C-H-A-R-B-U-C-K-S”? 30.5% of respondents answered Starbucks 9% of respondents answered coffee.

• Also asked: “Can you name any company or store that you think might offer a product called ‘Charbucks’”? 3.1% of respondents mentioned Starbucks.

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SEGMENT 3:


Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97 (2d Cir. 2013)

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SEGMENT 3:


• The district court found that Starbucks’ survey evidenced association.

• However, the relatively low association rate was insufficient to establish “actual association” – the 6th factor of the TDRA’s test for dilution by blurring.

• Both the district court and the Second Circuit discounted the survey’s weight because the word “Charbucks” was used in isolation rather than how it appeared in commerce.

The Gap, Inc. v. G.A.P Adventures Inc., 2011 U.S. Dist. LEXIS 71675 (S.D.N.Y. 2011)

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SEGMENT 3:


• Two logos (old and new) were tested in separate internet surveys. Defendant’s old logo:

Defendants’ new logo used bold lowercase letters for “gap,” omitted the periods between letters, and dropped the words “great adventures people” altogether. The new logo was thus: gap ADVENTURES.


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SEGMENT 3:


The control cell for the old logo replaced the word “gap” with: “Great Adventure People” in the old logo; and the word “tap” in the new logo.

Respondents were shown the accused logos and asked: “What company or brand, if any, comes to mind when you see the name on this website?” A net of 60.95% of respondents mentioned The Gap after seeing Defendants’ old

logo. A net of 37.62%of respondents mentioned The Gap after seeing Defendants’ new

logo.


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SEGMENT 3:


• The Court held that plaintiffs surveys established a likelihood of association, but not dilution by blurring. Citing McCarthy on Trademarks, the Court held that “Gap’s proofs establish that

consumers are likely to associate G.A.P Adventures’ marks with Gap’s marks. However, ‘the fact that people associate the accused mark with the famous mark does not in itself prove the likelihood of dilution by blurring.’”

Gap, Inc. failed to show that “as a result of the likelihood that consumers will associate its marks, Gap is likely to suffer an impairment of the distinctiveness of its marks.”

Louis Vuitton Malletier, S.A. v. Hyundai Motor America, 2012 U.S. Dist. LEXIS 42795 (S.D.N.Y. 2012)

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SEGMENT 3:


• Louis Vuitton conducted a double-blind internet survey. The test group was shown Hyundai’s commercial that used a “luxury” basketball and the control group was shown the same commercial, replacing the “luxury” basketball with a regular basketball. Survey intended to test “any possibility of dilution or confusion” 15% of participants recognized the basketball design as Louis Vuitton. Of these

participants, 62% believed Louis Vuitton authorized Hyundai’s use of the mark. The Court held that this 62% figure was probative evidence that participants

associated Louis Vuitton with Hyundai.

Louis Vuitton Malletier, S.A. v. Hyundai Motor America, 2012 U.S. Dist. LEXIS 42795 (S.D.N.Y. 2012)

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SEGMENT 3:


• Hyundai also conducted a double-blind survey showing the test group the ad with the “luxury” basketball. The “luxury” basketball was not in the ad shown to the control group. Participants were asked to identify the brands shown in the ad. (open-ended)

19% of the test group mentioned Louis Vuitton [open ended]. 90% of the participants noticed the “luxury” basketball.

30% of these participants stated the basketball reminded them of Louis Vuitton. [focused question]

It was “statistically significant that 19% of survey respondents, without prompting, identified Louis Vuitton as a brand shown in the ad, as is the 30% of participants who, when asked . . . to focus their attention on the basketball, said it reminded them of Louis Vuitton.”

Ringling Bros.-Barnum v. Utah Division of Travel Development

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SEGMENT 3:


• Unique attempt to test dilution. 955 F. Supp. 605 (E.D. Va. 1997).

• Respondents asked to fill in the blank of the statement, “The Greatest _____ On Earth,” and asked open-ended association questions.

• 25% completed with “show”; 24% completed with “snow”; 21% said both “show” and “snow”

• Court: survey demonstrated top-of-mind status but not dilution. “The respondents had no difficulty keeping the two marks separate in their minds in terms of the

goods and services each mark identifies and distinguishes.”

Anheuser-Busch, Inc. v. Balducci Publications28 F.3d 769 (8th Cir. 1994)

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SEGMENT 3:


• Defendant parodied an ad for Micholob Dry beer

• Survey: Test group shown parody ad; control group shown actual

ad Asked open-ended questions (not specified in court

decision) 55% of test group thought parody suggested Michelob

beer was contaminated with oil.

• Court found tarnishment under Missouri’s dilution statute.

Solicitor General’s Amicus in Moseley v. Victoria Secret Catalogue, Inc., 537 U.S. 418 (2003)

• The Solicitor General suggested potential survey designs for dilution: Divide respondents into two groups:

1) Knows of the defendant’s mark 2) Not aware of the defendant’s mark

Dilution: Ask association test questions: Difference between two groups in percentage who identify the mark with the plaintiff’s famous

mark represents damage to strength of the mark Tarnishment: Ask respondents to name positive / negative attributes:

If consumers aware of the defendant’s mark list fewer positive attributes or more negative attributes, evidence of tarnishment

• These have not been tested to date in the courts.

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SEGMENT 3:


Secondary Meaning vs. Fame

• Secondary meaning exists where the primary significance of the mark is to identify the source of the product rather than the product itself. Secondary meaning should be measured with reference to the mark’s target audience.

• Under the TDRA, fame requires that the mark be “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” 15 U.S.C. § 1125(c)(2) Fame either exists or it does not; it is not a sliding scale. A household name.

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SEGMENT 3:


T-Mobile U.S., Inc. v. AIO Wireless, LLC

• Secondary meaning survey After being shown the color magenta without any other brand identifying information, participants

were asked whether they associated the color with any company or companies offering wireless mobile phone services or plans. Survey properly targeted the defendants’ target consumers.

• Fame survey Before showing T-Mobile’s magenta color, participants were asked: Are there any companies that

come to mind that use a specific color when advertising or promoting their wireless/mobile plans or services? By prompting consumers to think about a specific subset of products, the survey failed to

show fame among the general population.

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SEGMENT 3:


Introduction

John focuses on providing advocacy and advice concerning intellectual property and related matters, including protecting

trade marks, copyrights, patents, confidential information and misleading advertising claims under the Competition Act. He

is certified by the Law Society of Upper Canada as a specialist in Intellectual Property Law (Trade Marks/Copyright). He is

currently the Chair of the Canadian Bar Association Trademarks Committee.

John is the author of two textbooks dealing with trademarks, Brand Management in Canadian Law (1st Edition, 2004; 2nd

Edition, 2006; 3rd Edition, 2010) and Canadian Intellectual Property Law and Strategy: Trademarks, Copyright and

Industrial Designs. (A 2nd edition was published in September, 2013).

John is also the author of Fox, Canadian Law of Copyright and Industrial Designs (3rd Edition, 2000; 4th Edition, 2003), the

leading copyright textbook in Canada. The 4th edition has been released in a loose leaf format. John and the text have

been referred to by both the Supreme Court of Canada and the Federal Court of Appeal as an authoritative source.

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SEGMENT 4:


The Canadian Approach to the Admissibility of Survey Evidence

• In order to understand the role to be played by survey evidence, consideration must be given to the approach by Canadian and United Kingdom courts concerning expert evidence, the tests applied by the courts in determining when trade mark infringement and passing off has occurred and recent cases dealing with survey evidence.

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SEGMENT 4:


Expert Evidence

• Four requirements must be met before expert evidence is accepted at trial. They are:• (a) relevance;• (b) necessity in assisting a trier of fact;• (c) the absence of any exclusionary rule; and • (d) a properly qualified expert.

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SEGMENT 4:


Expert Evidence

• Necessity in this context means that the expert opinion must be necessary in the sense that it provides information which is likely to be outside the experience and knowledge of the judge or jury.

• A common theme with respect to expert evidence is the observation that courts must fulfill their gate keeper role to ensure that unnecessary, irrelevant and potentially distracting expert or survey evidence is not allowed to extend and complicate court proceedings.

• When expert evidence is presented it must comply with the Code of Conduct for Expert Witnesses in the Federal Court or similar requirements of the courts of the provinces otherwise it may be inadmissible.

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SEGMENT 4:


Trade Mark Infringement

• The court must adopt the point of view, as a matter of a first impression, of a casual consumer somewhat in a hurry who sees the impugned mark at a time when he or she has no more than an imperfect recollection of the prior trade mark and does not pause to give the matter any detailed consideration or scrutiny nor to examine closely the similarities and differences between the marks.

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SEGMENT 4:


Trade Mark Infringement

• Because the critical issue of confusion is to be assessed from the viewpoint of the average consumer, the courts have said it is difficult to see what is to be gained from the evidence of an expert as to his or her own opinion where the trier of fact is in a position to form his or her own view. This will not be the case where the markets in question are ones with which the judge is not familiar. In such cases, expert evidence would be appropriate.

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SEGMENT 4:


Passing Off

• The plaintiff must demonstrate, among other things, a misrepresentation by the defendant to the relevant public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by the defendant are the goods and services of the plaintiff.

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SEGMENT 4:


The Decision of the Supreme Court of Canada in the Masterpiece Inc. v. Alavida Lifestyles Inc Case

• In the past survey evidence has been accepted so long as the survey was both reliable (in the sense that if the survey was repeated it would likely produce the same result) and valid (in the sense that the right questions have been put to the right pool of respondents in the right way, in the right circumstances to provide the information sought).

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SEGMENT 4:



• Survey evidence as opposed to that of expert witnesses dealing with the meaning of marks has the potential to provide empirical evidence which demonstrates consumer reactions in the marketplace. This evidence is not something that would generally be known to a trial judge and accordingly is necessary. However, the Supreme Court of Canada has said survey evidence should be applied with caution

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SEGMENT 4:



• The court said that courts must fulfill their gatekeeper role to ensure that unnecessary, irrelevant and potentially distracting expert or survey evidence is not allowed to extend and complicate court proceedings. Where the parties propose to introduce survey evidence it would be salutary to have a case management judge assess the admissibility and the usefulness of proposed expert survey evidence at an early stage so as to avoid a large expenditure of resources on evidence of little utility.

• One of the components of a confusion analysis is the extent to which the competing marks have become known. The criticisms that have been directed at survey evidence should not apply as forcefully in the context of survey evidence showing the extent to which a mark has become known or not known.

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SEGMENT 4:



• Since the release of the Supreme Court of Canada’s decision in 2011 no concrete steps have been taken to amend the rules of practice in the province of Ontario or in the Federal Court to implement this suggestion.

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SEGMENT 4:


The Decisions of U.K. Court of Appeal in the Marks and Spencer PLC v. Interflora Inc Case

• In the 1990s, the impact of judicial guidelines and criticism, lead to a marked shift in the way that surveys were used in litigation to assist in establishing passing off or trade mark infringement. The party, who commissioned the survey, frequently choose not to rely on the survey as evidence, but rather to use the survey to find members of the public whose evidence would assist it. The practice became widely known as "a witness collection program".

• Because a "witness collection program" was expensive and time consuming, the practice developed of requiring directions be sought before evidence generated by a witness collection exercise was admitted at trial.

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SEGMENT 4:


The Decision of U.K. Court of Appeal in the Interflora No. 1 Case

• The court specified that in the future a standard order should be used to clarify that

i) A party may conduct a true pilot survey without permission, but at his own risk as to costs;

ii) No further survey may be conducted or adduced in evidence without the court's permission; and

iii) No party may adduce evidence from respondents to any survey without the court's permission.

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SEGMENT 4:



• In deciding whether to give permission, the court must evaluate the results of whatever material is placed before it. Only if the court is satisfied that the evidence is likely to be of real value should permission be given. The reliability of the survey is likely to play an important part in that evaluation. Even then the court must be satisfied that the value justifies the cost. This requires the court to conduct a cost/benefit analysis. In a case of trade mark infringement in relation to the provision of ordinary consumer goods or services, these criteria are likely to be satisfied only in a special or unusual case.

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SEGMENT 4:



• The court said in a later decision in the same case that its decision did not mean that the days of survey evidence were over. It is possible to conduct fair surveys and they may indeed lead to witnesses of value. But in other cases common sense and procedural economy may require excluding such evidence along with any resultant witnesses.

• The court reaffirmed the real value test in an additional case but said the test did not require the court to evaluate the likely outcome of the case at an interim stage.

• In cases where acquired distinctiveness of a mark is in issue a survey may accurately identify that proportion of the relevant public which recognises the mark as having a badge of trade origin.

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SEGMENT 4:


Conclusion

• In cases alleging trade mark infringement which involve markets that a judge would typically be familiar, it will be difficult to effectively use survey evidence. However, an attempt on the part of a judge to make an assessment from the point of view of an average hurried consumer without any empirical evidence does not seem appropriate. In cases alleging trade mark infringement that are outside of this limitation survey evidence may be accepted. In addition survey evidence should be acceptable to show the extent to which a mark is known or not known.

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SEGMENT 4:


Conclusion

• In cases involving passing off, because of the different standard to be applied, courts should be more willing to accept survey evidence.

• In all cases when it is sought to introduce survey evidence, because of the constraints, relating to reliability and validity the survey must be conducted with clinical precision to be admissible.

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SEGMENT 4:


Panel Discussion

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