Confusion Isn't Everything William Mcgeveran University of Minnesota Law School

Notre Dame Law Review Volume 89 | Issue 1 Article 6 11-2013 Confusion Isn't Everything William McGeveran University of Minnesota Law School Mark P. McKenna University of Notre Dame Law School Follow this and additional works at: http://scholarship.law.nd.edu/ndlr Part of the Intellectual Property Law Commons, and the Litigation Commons Recommended Citation 89 Notre Dame L. Rev. 253 This Article is brought to you for free and open access by the Notre Dame Law Review at NDLScholarship. It has been accepted for inclusion in Notre Dame Law Review by an authorized administrator of NDLScholarship. For more information, please contact [email protected]. \\jciprod01\productn\N\NDL\89-1\NDL106.txt unknown Seq: 1 25-NOV-13 9:31 CONFUSION ISN’T EVERYTHING† William McGeveran* and Mark P. McKenna** 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 simul- taneously 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 eradicat- ing 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 over- whelmed inherent limits on trademark rights that once protected competition or communication values. It then explains the resulting damage. Sometimes courts penalize socially valuable but © 2013 William McGeveran & Mark P. McKenna. Individuals and nonprofit institutions may reproduce and distribute copies of this Article in any format at or below cost, for educational purposes, so long as each copy identifies the author, provides a citation to the Notre Dame Law Review, and includes this provision in the copyright notice. † We received many helpful comments from numerous colleagues as we developed the ideas in this Article. We are particularly grateful to Tom Cotter, Deven Desai, Dan Gifford, Eric Goldman, Laura Heymann, Mark Lemley, Ruth Okediji, Lisa Ramsey, Jay Tidmarsh, and Rebecca Tushnet for their thoughts. Thanks also to participants in conferences and workshops where one or both of us presented earlier versions of this project, including the 2011 Intellectual Property Scholars Conference, the 2012 Works-in- Progress in Intellectual Property conference, the academic track at the 2012 International Trademark Association Annual Meeting, the Berkeley IP Theory Seminar, the 2012 UCLA Entertainment, Media & IP Colloquium, and workshops at the Notre Dame Law School, the University of Minnesota Law School, and the Vanderbilt Law School. Finally, we appreciate research assistance from Catherine Mitros and Vincent Pham. * Associate Professor and Vance Opperman Research Scholar, University of Minnesota Law School. ** Associate Dean for Faculty Development, Professor of Law, and Notre Dame Presidential Fellow, Notre Dame Law School. 253 \\jciprod01\productn\N\NDL\89-1\NDL106.txt unknown Seq: 2 25-NOV-13 9:31 254 notre dame law review [vol. 89:1 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 bene- ficial 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 actiona- ble confusion: concerning more relationships (such as “sponsorship or affili- ation”); in connection with more protectable subject matter (such as product packaging and design); and beyond the point of sale (such as initial interest 1 See Mark A. Lemley & Mark McKenna, Irrelevant Confusion, 62 STAN. L. REV. 413 (2010). 2 For a history of the development of the multi-factor likelihood of confusion test, see Robert G. Bone, Taking the Confusion Out of “Likelihood of Confusion”: Toward a More Sensible Approach to Trademark Infringement, 106 NW. U. L. REV. 1307 (2012). 3 15 U.S.C. §§ 1114, 1125(a) (2006). \\jciprod01\productn\N\NDL\89-1\NDL106.txt unknown Seq: 3 25-NOV-13 9:31 2013] confusion isn’t everything 255 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 under- standings 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 elim- inate 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 4 For a full account of the expansion of confusion, see infra Section I.B. 5 See Mark P. McKenna, The Normative Foundations of Trademark Law, 82 NOTRE DAME L. REV. 1839 (2007). 6 Kelly-Brown v. Winfrey, 717 F.3d 295, 307 (2d Cir. 2013). 7 73 AM. JUR. 2D Statutes § 71 (2012) (“In the construction of an ambiguous statute, it is proper to take into consideration the particular evils at which the legislation is aimed, or the mischief sought to be avoided . .” (footnote omitted)); see Awotin v. Atlas Exch. Nat’l Bank of Chi., 295 U.S. 209, 214 (1935) (“The prohibition would be nullified and the evil sought to be avoided would persist. Such a construction of the statute is inadmissi- ble.”); Holy Trinity Church v. United States, 143 U.S. 457, 463 (1892) (“[A]nother guide to the meaning of a statute is found in the evil which it is designed to remedy . .”). 8 Pierre N. Leval, Trademark: Champion of Free Speech, 27 COLUM.

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