Summary:
MMR Strategy Group was retained by defendant Fareportal, Inc. in a trademark infringement case, Ian V. Jacobs v. Fareportal, Inc. In this dispute, two websites offering discounted travel fares vied for visitors and commissions using the word “cheapo.” Will the plaintiff’s survey be dis-counted?
Case Facts
Ian V. Jacobs owns the website www.cheapo.com, which he registered in 1998; he was granted a trademark in 2008. The site was originally a shopping comparison tool where people could find good deals, providing a platform for companies offering other goods or services to advertise rebates, coupons, and discounts. It did not originally include travel among these services, but Jacobs rebranded to include accommodations and airlines. At the time of the lawsuit, Jacobs took commissions from priceline.com for redirecting users to that site from Cheapo.com.
Fareportal develops software for travel websites. One of the functions of its software is booking; users book travel directly using Fareportal software. Fareportal owns Cheapoair.com and the Cheapoair mobile app, as well as three trademarks covering travel information services and travel advertising services. Fareportal advertises using over 3,000 keywords, which include various misspellings of Cheapoair and other terms using the word “cheapo.” Between 2006 and 2012, Fareportal attempted at least four times to purchase Cheapo.com from Jacobs, all unsuccessfully. In 2016, FarePortal sought to register a mark for “I Go Cheapo”; Jacobs opposed the registration.
While that opposition was still pending, Jacobs filed suit in Nebraska federal court, alleging trademark infringement against Fareportal for its use of the word “cheapo,” including in “I go Cheapo,” “We go Cheapo” and other slogans in various internet marketing campaigns, in radio and television commercials, and in keyword search engine advertising. Fareportal counterclaimed, alleging that while Jacobs registered his CHEAPO trademark, his use of the mark came only after Fareportal had used the word “Cheapo” in commerce for two years. Fareportal also alleged that once Jacobs understood that his website was getting traffic intended for Fareportal’s Cheapoair site, he made website changes designed to take advantage of that traffic by directing it to Priceline. Both parties moved for summary judgment. Jacobs submitted expert survey evidence, and Fareportal provided an expert rebuttal.
Survey Design
Jacobs retained Dr. Rhonda Harper to design and conduct what Dr. Harper’s report described as a reverse likelihood of confusion survey using the Squirt survey format. Its goal was to measure whether Fareportal advertising using the slogan “We go Cheapo” confused consumers, and if so, to what extent and why. Respondents qualified for the survey if they had booked travel or accommodations on a discount booking website in the past 12 months, or intended to book travel that way in the coming 12 months.
Qualified respondents were then assigned to one of three groups: test, control 1, or control 2. Test subjects were shown a Jacobs website page, Cheapo.com, a decoy question, and a video ad from Fareportal. The Cheapo.com page and the Fareportal ad were shown in random order, so that each was shown first for some respondents. The survey then asked a series of closed- and open-ended questions to measure confusion or relation between companies. In the Control 1 group, the survey followed the same format, but respondents were shown the Cheapo.com website and a control version of the Fareportal video without the slogan “We go Cheapo.” The survey shown to the Control 2 also followed the same format, but the group was shown a different, fictional website (BargainFare), and the same control version of the Fareportal video. All respondents were then asked a series of questions about the sources of the images and their relationships to one another.
In her report, Dr. Harper testified that the survey showed a significant likelihood of confusion.
MMR Strategy Group Rebuttal
Fareportal retained MMR Senior Vice President Dr. Justin Anderson to provide a rebuttal to Dr. Harper’s survey. Dr. Anderson testified that the Harper survey did not provide a reliable measure of reverse confusion. In his rebuttal, he explained some methodological issues with the survey, in addition to survey universe inconsistencies that he said made the survey unreliable.
In his report, Dr. Anderson made multiple criticisms of the Harper survey, starting with its format. Dr. Harper had written that the survey was intended to measure reverse confusion, because the senior user was Jacobs, but the more prominent mark was Fareportal’s. However, Dr. Anderson wrote that it actually measured a mix of reverse confusion and forward confusion, depending on how the survey randomized the two stimuli of interest. Because reverse confusion is measured by showing the junior user’s more prominent mark first, only some of the survey results measured reverse confusion, he wrote–and because the Harper report didn’t show how many respondents were assigned to each condition, it was unclear how many had taken a reverse confusion survey. This problem was worsened by the fact that the survey universe was made up of people familiar with the junior user’s mark, which is appropriate only in a survey of forward confusion. As a result, Dr. Anderson wrote, the survey’s universe included irrelevant respondents.
In addition, Dr. Anderson criticized the Harper survey for not including a “lineup” of similar ads after the decoy question, because failing to do so spotlights the stimuli of interest and has been found highly leading by survey authorities and courts. Also, he said, the Harper survey should not have used a Squirt format survey at all, because the two marks at issue had no market proximity–a requirement for successful use of the Squirt format.
Other methodological issues Dr. Anderson identified included:
- Incorrect analysis: When reporting the results of the Harper Survey, Dr. Harper ignored results for the questions measuring confusion as to permission, which significantly impacted the confusion measure.
- Controls: Control group 2 in the Harper survey did not control for either the Fareportal ad or the Cheapo website, making the data from that control group irrelevant to the dispute between Jacobs and Fareportal. Also, the Bargainfare website used as a control for the Cheapo website was not similar to the real Cheapo website, as advised by survey authorities.
- Universe: The survey universe was overinclusive because it included past purchasers in addition to future purchasers. Courts have determined that, to measure likelihood of confusion, only future purchasers should be included in the survey universe. Additionally, 59.3% of respondents were above age 55, even though this age demographic only makes up 10% of travelers who book online, and respondents in that age range demonstrated significantly different levels of confusion than respondents in other age ranges.
- Quality control: Errors in programming the Harper Survey appeared to have resulted in respondents viewing the wrong images and videos for their groups. Dr. Harper also appeared to have not excluded respondents who completed the survey too fast, took the survey twice, gave contradictory or inattentive responses, disclosed that they guessed, or disclosed that they didn’t understand the questions.
Court Order
The court excluded the Harper Survey on the grounds that “The cumulative effect of all the errors discussed above – errors in conception, of format, of methodology, of consistency, and of proper scope – renders the Harper survey inadmissible.”
When you need reliable measures of consumer confusion to provide evidence of trademark infringement, it is imperative to design a survey that properly measures confusion in the right group of consumers, for the right products or services, and in an accepted format. In this instance, the court recognized the flaws pointed out in the expert testimony by Dr. Anderson. If you require reliable survey rebuttals in a trademark infringement matter, contact MMR Strategy Group.