Ninth Circuit Clarifies the Role of Non-Consumer Confusion in Rearden LLC v. Rearden Commerce, Inc.

Trademark owners sometimes learn of potential infringers indirectly, such as when people mistakenly call or email the trademark owner when attempting to contact the infringer.  Often, these confused calls come from the trademark owner’s own vendors or potential investors and strategic partners.  While this “non-consumer confusion” is frequently just the first exposure to confusion in the marketplace that is quickly verified among actual consumers, sometimes, evidence of consumer confusion remains elusive.  As trademark law “protects only against mistaken purchasing decisions and not against confusion generally,” trademark infringement suits without evidence of actual consumer confusion can be difficult to prosecute, even if there is ample evidence of actual confusion among non-consumers.  This summer, in Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190 (2012), the Ninth Circuit clarified that under certain circumstances, evidence of non-consumer confusion is relevant and can support a finding of likelihood of confusion among consumers. 

The Rearden court held that non-consumer confusion can be relevant to the likelihood of confusion inquiry in three circumstances:  confusion on behalf of (1) potential consumers, (2) non-consumers whose confusion could create an inference that consumers are likely to be confused, and (3) non-consumers whose confusion could influence consumers.  Id. at 1214. 

Non-consumer confusion was particularly important in Rearden because the court had serious concerns as to whether some of the plaintiffs had any consumers at all, let alone consumers who could be confused.  While some of the plaintiffs using the REARDEN mark clearly were using the mark in commerce (in connection with production services offered to movie studios and video game companies), the plaintiffs who were potentially the most senior users of the mark were technology incubators—providing resources and support for development of startup ventures—and there was little evidence in the record that they ever provided incubation services to any company not under common ownership with plaintiffs.  Id. at 1195-96.  The district court held that no reasonable fact-finder could have determined that any plaintiff used the REARDEN mark in commerce before Rearden Studios began advertising under the mark, and then shortly thereafter, entered into a services agreement with Electronic Arts.  The Ninth Circuit, however, held that the factual record was not clear enough to support a grant of summary judgment on that point.  Id. at 1200, 1203-08.   

With little evidence of actual confusion among its own customers, the plaintiffs relied on specific instances where non-consumers confused plaintiffs for the defendant, such as a trade publication that noted confusion among conference attendees as to whether the defendant was affiliated with plaintiffs, and another trade publication that placed excerpts of an interview with plaintiffs’ founder and a picture of the founder alongside a feature article on the defendant.  Id. at 1218.  The Ninth Circuit observed these instances of confusion could conceivably fall under all three types of relevant non-consumer confusion, particularly, the “consumer influence” category.

Ultimately, the Ninth Circuit recognized that the Rearden plaintiffs’ evidence of actual non-consumer confusion was thin support for its case, but enough to potentially convince a reasonable jury and accordingly, survive summary judgment.