IP: Are trade channels really that important, and did the theory of reverse confusion die?

The Board typically gave the least amount of weight to the similarity of trade channels – until In re Bentley Motors Ltd.

Trademark attorneys typically explain to clients, when discussing whether or not to oppose another parties’ trademark application, that the Trademark Trial and Appeal Board has adopted a seven-factor test to analyze whether consumers are likely to be confused. These factors include similarity of marks, similarity of goods and services, similarity of trade channels, sophistication of the consumers, fame of the mark, third party use, and actual confusion. This multi-factor test is not a rigid scorecard. It is merely a balancing test used by the Board. No factor is dispositive, and varying weight may be given to each factor based on the circumstances.

When pressed, however, the attorney will often admit that the Board tends to give more weight to some factors then to others. The similarity of the marks, the similarity of the goods and services, third party use, third party use, and actual confusion tend to get the most weight. The factor that the Board typically gives the least amount of weight to is the similarity of trade channels. That was typically the case – until In re Bentley Motors Ltd.

In Bentley Motors, the Board, apparently forgetting about the concept of reverse confusion, reversed a refusal to register the mark BENTLEY for perfume, cosmetics, and glassware “sold only in authorized vehicle dealers and authorized vehicle service outlets,” finding the mark not likely to cause confusion with the marks BENTLEY, BENTLEY UNIVERSITY, and BENTLEY ORGANIC for similar or identical goods. The applicant Bentley Motors successfully argued that, because its goods are sold only through the "very tightly-knit" Bentley circle of dealers and service outlets to a "niche, affluent clientele," confusion is unlikely. The Board agreed.

The examining attorney argued that since the cited registrations are unrestricted as to channels of trade, the goods are presumed to travel in all normal channels of trade. The Board observed, however, that there was no evidence that the ordinary channels of trade for registrants' goods include Bentley's authorized dealers and service outlets.

Put another way, Bentley’s goods are marketed solely and exclusively through dealers and service outlets for Bentley and Rolls Royce automobiles. The Board held that the examining attorney failed to support the proposition that the goods identified in the cited registrations normally move in those exclusive channels of trade, notwithstanding the fact that the cited registration do not recite any trade channel limitations. The Board held that the burden is on the examining attorney to prove that the ordinary trade channels for the registrants’ goods overlap with the applicant’s very limited trade channel.

The Board found this factor to be dispositive, and it therefore reversed the refusal. In fact, the Board found this factor to be so pivotal that it did not even discuss the other six confusion factors, instead resting its entire opinion on the limitation of trade channels.

This opinion is potentially very important for two reasons. First, obviously, the sole reliance on the trade channel restriction is noteworthy and potentially something that future litigants will want to pay attention to and rely on, if necessary. Second, the opinion questions the continued validity of the reverse confusion doctrine for opposition purposes. In most reverse confusion cases, a junior (or new) user adopts a mark already in use by the senior user. Then the junior user becomes more recognized for the trademark than the senior user through advertising and other expenditures used to promote the mark. The original trademark owner then wants the junior user to stop using the mark even though the junior user is now more readily identified with the mark. In this case, for example, what is to stop consumers seeing the cited registrant’s BENTLEY brand products in normal channels of trade, mistakenly think that they are sold by Bentley Motors? Nowhere did Bentley Motors produce evidence that the general consuming public is aware that Bentley Motor's goods are sold only by authorized dealers. My guess is that this is more of a one off decision and that the Board has not done away with the doctrine of reverse confusion – but it is certainly worth citing in the future if your client can make a credible case that its goods or services travel in very specialized channels of trade.

Contributing Author

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Scott Slavick

Scott Slavick is a shareholder at Brinks Gilson & Lione, where his practice focuses primarily on trademark prosecution and trademark litigation. Scott maintains all aspects...

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