Reverse confusion and forward confusions are the two forms of confusion that consumers can succumb to. When we talk about the harm caused by confusion in the marketplace, we generally are referring to forward confusion. Forward confusion occurs when consumers mistake the junior user for the senior user and because of the confusion unjustly enrich the junior user at the cash register. Or if the confusion occurs outside of the checkout and the junior user offers a product or service that is inferior to the senior user, then the senior user can potentially lose sales over the mistaken connection.
If the senior user is a small company, forward confusion provides a scenario where a junior user could decide to intentionally infringe the senior user’s trademark. The incentive exists because the monetary damages in a forward confusion case are: (1) the senior user’s actual damages caused by the infringement; or (2) disgorgement of the junior user’s profits. Actual damages are difficult and costly to prove, so most trademark infringement cases involve disgorgement of profits. But profits are awarded only in those geographic areas where confusion was possible; hence, the incentive to intentionally infringe.
A junior user in a forward confusion case to make the decision knowing that if it is forced to pay over its profits in say Minnesota – and even if this amount is trebled, which a court has the authority to do – it was a worthwhile business risk to intentionally infringe. And this may be something as searchers we identify to a client because we have more fully investigated a potentially concerning record in the search results and determined the particular trademark owner is unlikely to expand beyond its current geographic area. That is until reverse confusion came into play.
Reverse confusion occurs when the junior user saturates the market with its mark so that consumer mistake the senior user for the junior user. In this case, the harm to the senior user is the loss of its ability to control its reputation. The monetary remedy in these situations is corrective advertising. The theory for corrective advertising is that the senior user needs an amount of money equal to what was spent by the junior user to take back control of its reputation.
This does not mean that the senior user is entitled to the same amount of money spent on a national advertising campaign. Generally, the senior user is entitled to a percentage of the national advertising spend based on the number of states the senior user is operating in. But the amount of money for corrective advertising will most likely be larger than an actual damage or profits award.
As trademark searchers, we need to keep reverse confusion in mind along with our the company’s marketing plans. This will impact how company’s decide to address problematic marks.