The Importance of Evidence of Actual Confusion

A decision of the UK Court of Appeal emphasises the importance of evidence of actual ›confusion in an action for trademark infringement, particularly emails, transcripts of telephone calls, social media posts and online chats involving consumers. Tvis Ltd v Howserv Services Ltd [2024] EWCA Civ 1103 

The Facts

TVIS was founded in 2009. It sells pet insurance to the public. It owns the trademark VETSURE registered March 15, 2010, in respect of "pet insurance" among other goods and services ("the Trademark"). Pet insurance is sold under the names VETSURE and VETSURE PET INSURANCE. The insurance covers the cost of veterinary treatments and optional extras such as pet death, loss or theft.

Customers may buy pet insurance either through a vet's introduction or directly from TVIS online or by telephone. The website vetsure.com is important for sales, and in recent years more policies have been sold online than by telephone.

TVIS does not market its services through insurance aggregator sites. Nor does it use TV, national press or radio advertising. It does advertise in the veterinary trade press.

The defendants are part of a group, which was founded in 2004 and carries on a travel insurance business. In 2020 they decided to move into pet insurance under the sign PETSURE ("the Sign"). They own the trademark PETSURE registered October 1, 2020 in respect of "pet insurance", among other goods and services. They began trading under the Sign in July 2021.

The defendants market their business through substantial use of the Internet and social media, including pay-per-click advertising, search engine optimization, paid-for social media and through affiliates. They also use events to generate publicity. By the time of the trial, they had around 15,000 active pet policies. TVIS's and defendant’s businesses were of similar size, but each was a small player in the market for pet insurance.

The Dispute

TVIS learned of the defendant’s trademark application and objected in January 2021, although it seems to have been too late to oppose the application. They tried to invalidate the registration and then began an action in October 2021 alleging trademark infringement and passing off.

At the trial TVIS relied on evidence which it contended showed actual confusion amongst members of the public. This evidence included emails, transcripts of telephone calls, social media posts and online chats that had been disclosed by the parties. TVIS relied on 25 examples drawn from its own disclosure and 17 examples drawn from defendant’s disclosure, although the defendant did not search the records of their claim handlers as part of their disclosure. Neither side called any witnesses to testify concerning these incidents, and the judge was left to assess the documentary evidence as best he could. 

The trial Judge’s overall approach was that where descriptive words are included in a registered trademark, the courts have been exceedingly wary of granting a monopoly in their use. The Judge said almost all the examples did not show confusion of the type required to show infringement. They showed 'administrative' errors which was not surprising given that names in issue contain descriptive elements relating to the services provided.

The Appeal

The Appeal Court was not impressed and found numerous legal errors in the reasoning of the trial Judge. Focusing on the evidence of confusion the court agreed that an instance of alleged confusion may, upon examination, involve some administrative error or other mistake which demonstrates no relevant confusion. However, several instances relied on by TVIS showed relevant confusion. They also showed that both the Trademark and the Sign were regarded by consumers as brand names, not descriptors, and that the supposed conceptual difference between them did not avoid the potential for confusion.

The Court said it was difficult to see why the existence of several instances of actual confusion was not probative of a likelihood of confusion. The trial Judge seems to have considered that the number of instances of confusion was too small, but as counsel for TVIS submitted:

"as … the judge had noted himself …the parties were small players in the market for pet insurance. … that should have indicated something to him, namely that the presence of   <confusion> was not simply the result of the ubiquity of either player in the market. These were two relatively small ships in a vast ocean, and yet <there was>instance after instance of them crashing into each other."

When the Court re-evaluated the likelihood of confusion, they concluded that the visual and aural similarities between the Sign and the Trademark, the distinctive character of the Trademark and the impact of the similarity of the services on taking the possibility of imperfect recollection into account, lead to a likelihood of confusion

The appeal was allowed and TVIS’s claims for invalidity, infringement and passing succeeded.

Comment

The decision illustrates the importance of instances of confusion in an action for infringement. While such evidence is not necessary to succeed it is persuasive.

The type of evidence relied on in this decision is not often mentioned in Canadian decisions. However, it should be since it is the best evidence of actual consumer reaction in the marketplace to the marks in issue.

If you have questions, please contact me at mckeown@gsnh.com

John McKeown

Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1700

Toronto, Ontario MSG 1V2

Direct Line: (416) 597-3371

Fax: (416) 597-3370

These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.

A version of this article originally appeared in the Law360 Canada published by LexisNexis Canada Inc.