The role of consumer surveys in trademark litigation is shown by a trademark infringement dispute between two credit unions, where the senior user relied on consumer survey evidence to establish the likelihood of confusion, and the junior user presented expert rebuttal testimony challenging the reliability of that survey. This shows that research must adhere strictly to accepted methodological standards to be admissible.
The Parties and the Dispute
Elevate Credit Union operates primarily in three counties in Utah and was formerly known as Box Elder Credit Union. In 2019, the organization rebranded as Elevate Credit Union and filed for state trademark registrations in Utah. As part of the rebranding process, Elevate conducted internal research to identify potential conflicts, including searches through the National Credit Union Administration and the US Patent and Trademark Office.
Elevations Credit Union operates in Colorado. After learning of Elevate's rebrand, Elevations sent a cease-and-desist letter asserting that the new name would cause consumer confusion. By the time the letter was received, Elevate had already completed nearly all aspects of its rebrand, including public announcements, member communications, website updates, printed materials, and issuance of new credit and debit cards.
Elevate filed a declaratory judgment action in the US District Court for the District of Utah, seeking confirmation that its new name did not infringe. Elevations countersued for trademark infringement.
Survey Evidence and Expert Testimony
Elevations retained a survey expert from MMR Strategy Group, an IMS Legal Strategies company, to conduct a likelihood-of-confusion survey. This expert was hired to rebut the survey evidence from the Elevations expert. The district court ultimately excluded both the survey research and the expert testimony from the Elevations expert, citing methodological flaws and reliability concerns. The Tenth US Circuit Court of Appeals affirmed the district court's ruling excluding the evidence.
Legal Standards Governing Likelihood of Confusion Surveys
In trademark litigation, courts may rely on consumer research to measure consumer perception. Strict legal standards exist to govern the admissibility of this type of research; e.g., expert testimony must be based on reliable methods. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) established a precedent for courts to exclude expert evidence that does not meet these requirements.
Experienced consumer survey experts ensure that their surveys’ design, execution, and analysis are methodologically sound and available for court review. Failure to meet these standards can result in exclusion, regardless of the survey's importance to a party's claims.
Methodological Deficiencies Identified by the Court
The court identified flaws in the Elevations survey that made the survey unreliable.
1. Survey Universe Misalignment
The survey population consisted entirely of Utah respondents, which would be consistent with a forward confusion scenario involving Elevate's service area. However, other aspects of the survey appeared to measure reverse confusion, which would have required sampling consumers in Colorado, where Elevations operates. The inconsistency between the survey universe and the type of confusion being measured rendered the survey unreliable.
2. Improper Use of a Squirt Survey Format
The survey employed a Squirt format, in which respondents are shown competing marks side by side or sequentially, usually alongside third-party marks. This format can provide reliable data only when there is evidence of real-world competitive proximity between the parties. Given the geographic separation of the two credit unions, the court found that competitive proximity was not adequately established.
The Elevations expert attempted to demonstrate proximity through search results from Bing and the Apple App Store. The court concluded that this approach may have artificially manufactured proximity by assuming that consumers commonly choose financial institutions solely based on search engine results.
3. Failure to Measure Forward or Reverse Confusion
The court found the survey failed to measure forward or reverse confusion properly, noting that it blended elements of both. The senior mark was measured as if assessing reverse confusion while surveying respondents located in the junior user's geographic market. A hybrid approach does not conform to accepted standards for measuring confusion.
4. Failure to Measure Initial Interest Confusion
Elevations argued that the survey measured initial interest confusion, a temporary state that occurs before a purchasing decision is made. The court rejected this argument because it failed to explain how the survey methodology can be designed to capture initial interest confusion or how such confusion can be measured.
Why Trademark Survey Evidence Requires IMS Expertise
Parties to trademark infringement actions that rely on consumer survey evidence must carefully select consumer survey experts for proper survey design, population selection, and analysis. Adjudicators scrutinize consumer survey evidence and exclude surveys that fail to align methodology with the legal theory.
Adherence to methodological and evidentiary standards is imperative for survey evidence to be accepted. IMS Legal Strategies experts design, execute, and testify in trademark disputes involving likelihood-of-confusion surveys that meet established legal standards and provide reliable evidence in intellectual property disputes.
