The fact that there were two separate articles in the most recent issue of a leading IP publication on ‘initial interest confusion’ reflects the growing importance of this topic.*

So what’s it all about then? Well, trade mark law is basically about preventing consumer confusion – a trade mark is said to be an indicator of origin, and a registration is infringed if a competitor uses a trade mark that’s so similar that there’s consumer confusion (well-known trade marks enjoy additional protection against dilution, free-riding and tarnishment, but that’s another matter). Typically the type of confusion that occurs is that a consumer buys one company’s product in the mistaken belief that they’re buying another’s.

So the confusion occurs at the point of purchase. But what happens if there is  confusion, but that confusion is cleared up before the point of purchase, with the result that the consumer doesn’t buy the ‘wrong’ product? Is there still an infringement?

Initial interest confusion has become a big issue of late, primarily because we all use the internet so much. A typical example might be: a consumer goes online and types in the name of a brand they’re interested in; as a result of keywords or some other devilishly clever thing, the consumer is directed to the material of another brand; the consumer is able to work out that the material they’re looking at is not the material of the brand they were initially looking for; the consumer decides to go ahead and purchase the product nonetheless.

Initial interest confusion can, however, happen just as easily in the bricks-and-mortar world. For example: a consumer goes into a supermarket and picks up a product that they know; on closer examination it becomes apparent that the product isn’t what the consumer thought it was, but rather the supermarket equivalent; the consumer decides to purchase the supermarket equivalent anyway.

US courts were the first to apply the concept of initial interest confusion. There was a case where a court held that the piano trade mark Steinway had been infringed by the trade mark Grotia-Steinweg, even though the court accepted that the only confusion that there would be was pre-sale confusion that would be cleared up before purchase. There was also the case where a court held that Mobil’s trade mark registration for its famous Flying Horse logo had been infringed by an oil company that used the name Pegasus, even though there would be no confusion at the time of purchase. Why? Because the company using Pegasus would ‘gain crucial credibility during the initial phases of a deal.’

The Court of Justice of the European Union (CJEU) also seems to have used the concept of initial interest confusion in some of the keyword cases it’s decided, like the Google and Portakabin cases. In these cases the court basically said that there will be confusion, and therefore infringement, if the advertising material that the consumer sees as a result of the keyword does not make it clear to a reasonably astute internet user that it isn’t the material of the owner of the trade mark they searched for.

In the recent UK case of Och-Ziff Management - where the issue was whether hedge fund trade mark registrations for Och and Och-Ziff were infringed by the use by a stockbroker of the trade mark Och Capital - the court held that the CJEU judgments did support the view  that initial interest confusion is actionable under confusion infringement. It went on to say that there can be a likelihood of confusion at the point where the consumer views an advert, irrespective of whether or not the advert leads to a sale, and irrespective of whether or not the consumer remains confused at the time of the sale. In justifying this, the court spoke of how this type of action can affect reputation and erode distinctiveness.

Interestingly, initial interest confusion was not deemed to be enough in a later UK passing off case of Moroccanoil v Aldi. In this case it was quite clear that the supermarket chain Aldi had deliberately copied the get-up of a product called Moroccanoil – indeed the company’s policy was neatly encapsulated in the slogan ‘Like Brands, Only Cheaper’. Yet the court held that there was no passing off because there was no proof that anyone had actually bought the wrong product – the best Moroccanoil could do was show that there had been online comments by people who regarded Aldi’s actions as ‘cheeky’, and who said that they did a ‘double take’ when they saw the copy-cat product.

The court distinguished this case from Och-Ziff as follows. The earlier case was a trade mark infringement case, all that’s required there is confusion, and confusion can be established by simply showing that people wonder whether there might be a connection between the products. This, however, was a passing off case,  what’s required there is a misrepresentation, a misrepresentation only occurs where people assume that the product they’ve bought is either the product of the company claiming passing off or one that was made under licence from that company. The bar for passing off is therefore higher. It’s probably safe to say that the concept of initial interest confusion is far from settled in the UK.

So what about South Africa? In a trade mark opposition case that was heard by the Supreme Court of Appeal a few years back - and where it decided that the trade marks Orange and Orangeworks, both covering software, were confusingly similar - the court said this: ‘In my view the mark is indeed likely to cause at least initial confusion...albeit that the initial confusion might soon be cleared up.. confusion need not be lasting for it to disqualify a mark from registration...it is sufficient if it is confusing only for a short time, sufficient to attract initial interest, albeit that the confusion might later be cleared up.’

These comments, which suggest that initial-interest confusion is part of South African law, surprised some, especially as they were made without explanation - which is a pity. Because initial-interest confusion is a big issue that has significant implications for trade mark law. It therefore needs careful consideration.