Welcome to the United States: Likelihood of Confusion

Likelihood of Confusion in the Fourth Circuit

by Martha A. Weis

On June 15, 2017, Lidl, a German global discount supermarket chain, opened its first store in the United States. On June 30, 2017, U.S. grocery giant, Kroger, welcomed Lidl to the States by filing a lawsuit for, among other things, trademark infringement. See The Kroger Co., et. al. v. Lidl US, LLC et. al. (3:17-cv-00480).

In its Complaint, filed in the U.S. District Court in the Eastern District of Virginia, Kroger alleged that Lidl’s use of its PREFERRED SELECTION store brand infringes, unfairly competes, and dilutes Kroger’s own PRIVATE SELECTION store brand. In the Eastern District of Virginia, the “ultimate question, for purposes of determining liability in trademark infringement actions, is whether there exists a ‘likelihood that an appreciable number of ordinarily prudent purchasers will be misled, or indeed simply confused, as to the source of the goods in question.’” Perini v. Perini, 915 F.2d, 121, 127 (4th Cir. 1990) (citation omitted). Therefore, trademark infringement hinges on whether there is a likelihood of consumer confusion.

Would you say the two marks below are confusingly similar? At a supermarket after a long day at work would you mistake one mark for the other? Which one of these marks makes you think “Kroger”, as opposed to another supermarket?

Well that’s a hard question to answer especially since the people who must answer it, judges, are in the courtroom, not in the grocery store. The statute at issue, 15 U.S.C. § 1114(1)(a) states:

Any person who shall, without the consent of the registrant—use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive

Okay but, when comparing two trademarks, HOW is one to determine whether a consumer is likely to be confused?

Well, to solve this little dilemma the Fourth Circuit has created a test consisting of nine (non-exclusive) factors, that lower courts, like the Eastern District, must weigh in determining whether there is a likelihood that a consumer could be confused as to ownership of the products sold under two trademarks.

These factors are (1) the strength or distinctiveness of the mark; (2) the similarity of the two marks; (3) the similarity of the goods and services that the marks identify; (4) the similarity of the facilities that the two parties use in their businesses; (5) the similarity of the advertising the two parties use; (6) the defendant’s intent; (7) actual confusion; (8) the quality of the defendant’s product; and (9) the sophistication of the consuming public. Pizzeria Uno v. Temple, 747 F.2d 1522, 1527 (4th Cir. 1996).

Kroger claims that the nine likelihood-of-confusion-factors strongly favor it. Specifically, in its motion for preliminary injunction, Kroger argues that it “has a very strong, famous mark selling in the billions of dollars and units; the parties sell the same goods through the same facilities using the same advertising directed to the same potential customers, who are not exercising a high degree of care.”

The Court has ordered Lidl to respond to Kroger’s Motion and Complaint by July 14th.

Stay tuned.

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