South-Western Legal Studies in Business

Confusion Over Trademark Among Non-Buyers May Be Evidence of Infringement
Description Appeals court held that a trial over a claim of infringement on a trademark could proceed. While the original mark holder could not show lost sales, if it could show confusion among prospective customers, it may have a claim under the Lanham Act.
Topic Intellectual Property
Key Words Trademark; Lanham Act; Infringement; Confusion
C A S E   S U M M A R Y
Facts Beacon Mutual Insurance Company (Beacon) has sold workers' compensation insurance in Rhode Island since 1992 under the marks "The Beacon Mutual Insurance Company," "Beacon Insurance," and "The Beacon." It also uses a lighthouse logo. In 2001, a competitor called CGU changed its name to OneBeacon Insurance Group (OneBeacon). It adopted a lighthouse logo with a different look compared to the logo used by Beacon. Beacon sued OneBeacon for infringement under the Lanham Act. The district court dismissed the suit holding that Beacon did not show a substantial likelihood of confusion. Beacon appealed.

Reversed and remanded. Factors to be considered in determining whether a likelihood of confusion exists between trademarks include: 1) similarity of marks; 2) similarity of goods or services; 3) relationship between parties' channels of trade; 4) relationship between parties' advertising; 5) classes of prospective purchasers; 6) evidence of actual confusion; 7) defendant's intent in adopting the mark; and 8) strength of plaintiff's mark. There is an issue of material fact as to whether consumers were likely to be confused by the similarity between the marks here; that precludes summary judgment in the case. Even if Beacon could not show that it lost sales, if it could show that there was confusion among selling agents and likely buyers, it has raised the possibility of damage to its goodwill and business reputation. Those factors are protected by the Lanham Act.

Citation Beacon Mutual Insurance Co. v. OneBeacon Insurance Group, 376 F.3d 8 (1st Cir., 2004)

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