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Types of Confusion
2.785 Confusion can be established in different ways. The test for the basic type of confusion is
whether the similar mark so resembles the protected mark that it is liable to confuse a substantial
number of average consumers as to the commercial source of the goods or services. Factors
frequently considered in determining confusion are the degree of distinctiveness of the protected
mark, the size and reputation of its owner, the sophistication of the consumers concerned and, of
course, the similarity of the marks and the goods or services involved. In many countries, confusion
is not restricted to basic confusion as to the commercial source, but also includes that which gives
the impression of a strong business connection between the two users of the same trademark or
similar trademarks, i.e., confusion as to affiliation. However, the use of an identical or similar mark
on clearly unrelated or completely different goods usually falls outside the scope of protection, as a
large degree of dissimilarity of the goods or services involved will lead consumers to assume that the
source of the goods or services is not the same and also that there is no particular business
connection between the users.
2.786 A third form of confusion that has been referred to, for example, under Section 43(a) of the
Lanham Act of the United States of America and under Section 53 of the Australian Trade Practices
Act, is called confusion as to sponsorship. Under this test for confusion, consumers will assume
both that the goods or services do not originate from the same source and that the two enterprises
do not entertain business relations so intensive and continuous as to cause confusion as to
affiliation. Nevertheless, the consumer will expect, from the similarity of the marks, from the types
of product or service that the mark is used for and from the manner of use by the second user, that
the use of the protected mark by the second user has been authorized by agreement for a certain
period of time. This type of confusion can be relevant, for example, in cases where the third party
uses the mark (without authorization) for ornamental purposes on goods. However, unlike
confusion as to source or affiliation, this third type of confusion has not the same status as other
fully established grounds for relief under statutory trademark laws, as its exact boundaries are still
developing.
2.787 This concept of confusion may be relevant to so-called “publicity” rights, relating to
well-known artists and media or sports personalities, and to “merchandising” rights, relating to
fictional characters in literary or artistic works. These rights concern relatively new marketing
techniques whereby enterprises are “licensed”, for a certain period of time, to make use of the
popularity or fame symbolized by the names or likenesses of certain personalities or characters, as
this use is expected to stimulate consumer demand for the product or service of the “licensee.”
Consumers would generally be misled by the use of the name or likeness of the personality or
character in connection with the product or service into believing that the personality or the owner
of rights in the character, which could also be a registered mark, had expressly authorized the use
of their personality or character.
Confusion with Respect to Indications
2.788 An indication can be any sign, symbol or device that conveys to the consumer the message
that a product or service on the market comes from a particular commercial source, even if this
source is not known by its name. Indications may therefore consist of two-dimensional or
three-dimensional signs, labels, slogans, packaging, colors or tunes, but are not limited to these.
Protection against confusion with respect to indications is already available under specific legislation
on trademarks, service marks and trade names. However, this protection is often limited in several
ways. The limitations may concern the applicability of the specific law to certain types of indication,
or the exact scope of protection. Thus protection against confusion under unfair competition law
may still be relevant where the specific legislation does not afford overall protection against
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confusion. This aspect is also relevant to the protection of well-known marks against confusion, as
required by Article 6bis of the Paris Convention.
2.789 The general applicability of trademark law is usually confined to particular indications.
Some countries do not, for example, recognize titles of single literary works or films, get-up
(product appearances), shop interiors, colors or color combinations, or trade dress under statutory
trademark law. As regards service marks, although most countries have a system for the
registration of such marks in the same way as trademarks, in those that do not, protection under
the rules of prevention of unfair competition is needed. Also, even in countries where
three-dimensional trademarks are recognized and registrable, particular shapes may nevertheless be
excluded. For example, shapes determined solely by the nature of the goods, appearances resulting
from some technical or industrial function of the goods and product configurations determining the
essential value of the goods are expressly excluded by the EC Directive to Approximate the Laws
Relating to Trade Marks. The “functionality” doctrine, particularly developed in the United States of
America, produces similar results.
2.790 Apart from this, protection under trademark law can sometimes be invoked only for marks
that have been properly registered in the country where protection is sought. In this respect
Article 6bis of the Paris Convention constitutes an exception in favor of a well-known mark, which
does not need to be registered in order to be protected against the potentially confusing use of a
mark that is a reproduction or an imitation of the well-known mark and is used for identical or
similar articles. It is to be noted that a trademark may be well-known in a country before it is
registered or even used in that country, as a result of the advertising or reputation of the mark in
other countries. The obligation to protect unregistered well-known marks is clarified and
supplemented in the Joint Recommendation Concerning Provisions on the Protection of Well-
Known Marks adopted by the WIPO General Assembly and the Assembly of the Paris Union in
September 1999.
2.791 Unfair competition law may provide protection against confusion for indications or signs
that are not protectable under trademark law. However, the availability of protection for a sign
under unfair competition law will depend partly on the reasons for the lack of protection for
unregistered signs under the special laws. If a sign can in principle be covered by the specific
legislation but does not meet the substantive requirements of that legislation, it would not seem
consistent with a balanced system of protection to grant that sign the same protection under unfair
competition law as would be granted to it under the special law. It is therefore argued that
protection against confusion should only be available under unfair competition law if the indication
or sign to be protected has sufficient distinctiveness to distinguish the products, services or other
business activities concerned from the same or similar activities of other traders. Nevertheless, in
order to promote the registration of marks, some unfair competition laws require more than just a
minimum degree of distinctiveness for the protection of unregistered indications. For example,
Article 2(1) of the Unfair Competition Prevention Law of the Republic of Korea requires the
indication to be “widely known”, which could in some cases restrict actual protection to one
particular region.
2.792 The degree of distinctiveness of an indication that is not protected under statutory
trademark law is assessed in relation to the same factors as apply to registered marks, including the
meaning and the appearance of the indication, and its uniqueness compared with other indications
for the same or a similar activity. Even if distinctiveness is inherently lacking, for example, owing to
the descriptive nature of the indication for particular goods or services, the indication can be
protected if it has acquired “distinctiveness by use”, or secondary meaning, in the country where
protection is sought. Secondary meaning implies that, as a result of continuous and exclusive use of
the mark on the market, a substantial number of consumers have become aware of it and will
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associate the activity carried on under it with a particular commercial source. In Germany, for
example, the trademark “4711” for perfume has been considered sufficiently distinctive as a result
of public awareness that the goods under that mark come from a particular source. In fact the
degree of secondary meaning depends on the market for the goods or services involved and the
degree of descriptiveness of the indication in relation to those goods or services. The degree of
secondary meaning (or percentage of consumers) necessary to achieve sufficient distinctiveness
varies according to the practices of the court concerned. In some countries, opinion polls or market
surveys on consumer reactions often provide empirical data with which to determine the degree of
secondary meaning, whereas in other countries the courts themselves will judge whether an
indication has acquired sufficient distinctiveness.
2.793 Secondary meaning analysis also applies to indications that have been expressly excluded
from statutory trademark protection. For example, the configurations or shapes of goods that are
deemed to be excluded from statutory protection under trademark law by the EC Directive to
Approximate Laws Relating to Trade Marks may still acquire secondary meaning among consumers
in a particular market. Under those circumstances, protection against confusion is justified if
consumers could be led to believe mistakenly that other goods using the configuration come from
the first user. It may not always be easy, however, to establish the necessary degree of secondary
meaning, since the particular configuration of the goods must be recognized by the relevant
consumers as indicating a particular source. If the exclusion in the specific legislation is clearly
intended to dismiss the indication as not worth protecting at all, for example, in the case of purely
descriptive words, protection is likely to be denied also under unfair competition law.
2.794 Limitations on the scope of protection afforded by trademark law may also have the effect
of allowing indications to be protected against confusion under unfair competition law. Although
trademark laws usually grant protection against any potentially confusing use of a registered
trademark, there may still be differences with respect to the exact scope of the protection against
confusion. For example, protection against the use of the same or a similar mark might be
restricted to those goods or services for which the mark is registered. If a mark identical or similar
to the registered trademark is used for other goods or services and that use is likely to cause
confusion, such protection might only be available under unfair competition law or passing-off
principles. Generally, trademarks are protected against the use of identical or similar signs not only
in respect of identical goods or services but also in respect of similar goods or services. This type of
protection derives from what is sometimes called the “principle of speciality”, as the protection is
related to the trademark’s primary function of distinguishing the goods of one enterprise from
those of competitors and other market participants. Thus if trademark protection is not available
because the goods or services involved are held to be dissimilar (although confusion as to source
may in fact be possible), protection against confusion can be sought under unfair competition law.
However, there are also trademark laws that consider the likelihood of confusion to be the sole
criterion for protection, regarding the similarity of the goods or services involved as not decisive in
itself, but only as one of several determining factors. This kind of statutory protection would
encompass all types of confusion.
2.795 The criteria used to judge the similarity of indications are, with some minor differences, the
same throughout the world. The determining factors include the common elements of appearance,
pronunciation and meaning or verbal translation of the marks involved, but the decisive factor is the
overall impression on the average consumer of the goods or services involved. Particularly if the
goods are for mass consumption, the individual elements of the marks involved are less carefully
examined by the average consumer. Since the two marks are as a rule not closely examined side by
side, in practice the similarities between the indications are more important than the differences.
The similarity of the goods or services depends largely on the question whether consumers would
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generally expect the goods or services to originate from the same source. However, they do not
need to be either functionally interchangeable or competitive.
2.796 Protection against confusion may be too limited for so-called “well-known” marks and, in
particular, for marks with an even higher reputation. Article 6bis of the Paris Convention requires
member States to protect trademarks that are well known in their country against any potentially
confusing use of similar trademarks, but that obligation is only relevant for identical or similar
goods. In certain cases, the unauthorized use of well-known marks for different goods or services
may nevertheless cause confusion among consumers. For example, if the mark has been used for a
broad range of products and has been extensively advertised or is well known for the particular
“image” of its proprietor, consumers might associate such a mark with a certain origin and quality
consistency rather than with goods or services of a specific kind. Such associations can also cause
confusion. The member States are not obliged under Article 6bis to grant this extended protection,
but unfair competition law may be relevant. The question whether a trademark is “well-known” in
a given country for the purposes of Article 6bis of the Paris Convention has to be decided in each
case on the basis of the facts. Usually, the factual determination of the notoriety of a trademark is
based on its reputation and image in the mind of the trade circles and consumer groups concerned
at the place and time relevant in the particular case. Factors such as the mark’s inherent
distinguishing power, the length of time that it has been used in the given country, the amount of
advertising and other publicity given to it in various media and its established association with
particular goods or services are often taken into consideration. The Joint Recommendation
Concerning Provisions on the Protection of Well-Known Marks obliges member States to protect
well-known marks even beyond confusion under certain circumstances. According to Article 4(1)(b)
of the Joint Recommendation a well-known mark has to be protected against the use of an
identical or similar mark for dissimilar goods or services if such use:
-
would indicate a connection between these goods or services and the owner of the mark
and would be likely to damage his interests;
-
is likely to impair or dilute in an unfair manner the distinctive character of the well-known
mark; or
-
would take unfair advantage of the distinctive character of the well-known mark;
-
in the two last-mentioned cases, Member States may require that the well-known mark be
well known by the public at large (Article 4(1)(c) of the Joint Recommendation).
2.797 Statutory trademark law frequently requires that the use of a similar mark must be a form of
trademark use, that is, use as an indication of the commercial source of the products or services.
Thus ornamental use, such as use on advertising material or as a mere decoration on goods, for
instance on ballpoint pens or ashtrays, or even as the configuration of an actual product such as an
earring in the shape of the mark, is not always regarded as falling within the scope of statutory
trademark protection. Protection against this type of use could, however, be sought under unfair
competition law. One example of a trademark law that is very extensive in the above respects is the
Uniform Benelux Trademark Law of 1971, which provides a broad definition of registrable marks
and protection against any use of an identical or similar trademark by others without proper
justification that is likely to cause prejudice to the trademark proprietor.
2.798 Similar limitations on protection against the unauthorized use of traders’ or businesses’
indications are to be found in the protection of trade names. Trade names serve to identify and to
distinguish an enterprise and its business activities from those of other enterprises. Article 8 of the
Paris Convention imposes the obligation to protect trade names in all countries of the Paris Union,
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without specifying what kind of protection should be granted or how it should be given.
Nevertheless, trade names must be protected without any obligation of filing or registration. Most
countries already protect trade names against the risk of confusion. This protection applies not only
where trade names are covered by a special law, but also where they are protected under special
provisions of unfair competition law, civil law, company law or commercial law. As a general rule, a
direct competitive relationship between the enterprises concerned is not decisive, but remains
relevant in determining whether the use of the same or similar trade names might confuse
consumers regarding the identity of enterprises or the relationship between them. The protection
may extend beyond the particular field in which the prior trade name is used, as trade practice or
the likelihood of expansion and diversification of the activities of the enterprise is frequently taken
into account by the courts. Thus the scope of protection of trade names against confusion may
sometimes be a little wider than the scope of protection of trademarks under trademark law.
Confusion with Respect to Product Shapes
2.799 The actual shape of a product could also lead to confusion among consumers. If the shape
is so well known that consumers will relate the product with a particular commercial source (as in
the case of the “Coca-Cola” bottle), then the shape can be regarded as a protectable indication.
2.800 It must also be noted that specific legislation is available in many countries for the
protection of industrial designs, either to complement or to replace copyright protection for works
of so-called “applied art.” Such legislation usually prohibits the use of identical or similar product
appearances for identical or similar goods. However, as with trademark legislation, protection
under special laws on industrial designs is also limited in several ways, which vary significantly from
country to country. In a manner similar to the specific protection under trademark laws, such
limitations may concern the general applicability of the designs law to certain product appearances
and also the exact scope of the protection granted by the specific legislation. For example, if the
design protection of a surface decoration is limited to the use of the decoration on products for
which the design is registered, protection against copying of the design for the decoration of other
products may be obtained under unfair competition law, if the copied design is misleading or
causes confusion as to the commercial source.
2.801 For protection against confusion concerning the products only, most requirements under
unfair competition law are established by case law, frequently with reference to the practice of
“slavish imitation.” Within this particular field of unfair competition law, it has often been stated
that, as a principle inherent in the free market system, market participants are free to imitate
designs or other shapes, appearances or visual characteristics of products that are not protected by
specific laws such as patent, copyright, design or possibly trademark laws. Some of those specific
laws even expressly preclude protection under unfair competition law for acts that are covered by
the specific legislation if the design involved could be protected under that legislation. For example,
Article 14(5) of the Uniform Benelux Designs Law of 1975 precludes actions to protect registrable
designs under unfair competition law if protection could have been granted had the design been
properly registered. Therefore, the mere risk of confusion as to the shape of the products will be
insufficient to constitute unfair competition if the design would have been protectable under a
specific law and product imitation would have been covered by that specific legislation. On the
other hand, the risk of confusion as to the products may be sufficient to obtain protection under
unfair competition if the design involved reveals a certain degree of originality but cannot be
registered as a design owing to other requirements of the specific legislation, or if registration has
been applied for but not yet secured.
2.802 If the design, shape or other characteristic non-functional features of the product are
associated to a substantial degree by consumers with a certain source or origin, potential confusion
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as to the source of the product will usually constitute an act of unfair competition. Whether such
potential confusion occurs in cases of imitation will be determined by the same factors as outlined
above with respect to indications, that is, after examination of the question whether the
characteristic features of a product have acquired a sufficient degree of secondary meaning, and
the product designs involved will be judged on their similarities. In some countries it is accepted
that the risk of confusion as to source can be reduced by the use of disclaimers, like a clearly visible
statement ruling out the possible assumption that the product or service comes from a particular
source. However, such disclaimers are only seldom recognized as sufficiently reducing the risk of
confusion.
2.803 Protection against confusion as to the commercial source of a product may also be available
under specific trademark law if the applicable trademark legislation provides for the protection of
three-dimensional marks or the “get-up” of products. However, if the product’s appearance is not
registered as a trademark, or if particular forms are possibly excluded from statutory trademark
protection, the same principles as outlined above will apply to the protection against confusion
between product shapes under unfair competition law.
Misleading
General
2.804 Misleading can roughly be defined as creating a false impression of a competitor’s own
products or services. It may well be the single most prevalent form of unfair competition, and it is
by no means harmless. On the contrary, misleading can have quite serious consequences: the
consumer, relying on incorrect information, may suffer financial (or more harmful) prejudice. The
honest competitor loses clients. The transparency of the market diminishes, with adverse
consequences for the economy as a whole and economic welfare.
2.805 Since truthfulness is rightly considered to be one of the main principles of honest trade
practice, it is generally agreed that the prohibition of deception is essential to the concept of
fairness in competition. Or, as Article 10bis(3) of the Paris Convention states, any indication or
allegation that is likely to mislead, has “in particular” to be regarded as being contrary to honest
practice.
2.806 Consequently, most member States of the Paris Union have included the prohibition of
misleading acts or practices in their legal systems (or have even passed specific laws on the subject).
In addition, the courts have developed a particularly abundant case law on misleading. Even in
countries where in the past protection against deception has been less strong than in others, recent
developments indicate a move towards greater strictness. In the search for effective legal solutions,
however, countries have chosen quite divergent methods. A significant factor of this divergence is
that misleading acts are primarily directed to the consumer and not directly to competitors. Where
consumer protection is primarily looked upon as a matter of criminal law, enforcement is left to the
State enforcement authorities. However, most of the countries that have specific legislation on
unfair competition have included a provision against deception into the relevant laws, thus adopting
a civil law approach.
2.807 While, on the whole, the regulation of misleading makes a many-faceted picture, most
countries share the distinction between “normal” misleading, which may be done in good faith,
and special cases of misleading, which may have particularly severe consequences. For the most
serious cases of misleading, such as malicious misleading or deception in the health and drug field,
several countries have introduced criminal sanctions in addition to civil law remedies. Moreover,
special cases of potential deception such as bonuses, gifts, clearance sales and travelling sales are
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