In a trademark infringement case, parties often retain survey experts to conduct likelihood of confusion litigation surveys, and authorities commonly accept them as evidence. However, to be accepted as evidence, a likelihood of confusion survey must meet certain standards. In a recent trademark infringement case, Elevate Credit Union v. Elevations Credit Union, MMR Strategy Group was retained on behalf of Elevate to rebut survey evidence presented by Elevations. In its decision, the court outlined how to determine whether a likelihood of confusion exists. Our case study discusses how the MMR rebuttal contributed to our client’s victory. But the court’s decision to exclude the Elevations survey evidence also offers insight into why a likelihood of confusion survey may be excluded.
Elevate Credit Union is owned and operated principally in three counties in Utah. Elevations Credit Union is owned and operated in Colorado. Elevate, formerly Box Elder Credit Union, rebranded and filed for patents and marks in 2019 and was approved by the US Patent and Trademark Office (USPTO). They performed routine research into potential conflicts, including inquiries with the National Credit Union Association and USPO.
Upon finding Elevate on the internet, Elevations issued a cease and desist order, arguing that consumers would be confused. By the time Elevate received the cease-and-desist letter, nearly all aspects of its rebrand were complete, including publicly announcing the name change, reminders sent to members, a website design, printed internal and advertising materials, and redesigned and printed new plastic credit and debit cards.
Elevate sought a declaratory judgment in the US District Court for the District of Utah stating it was not infringing the Elevations trademark. Elevations countersued for trademark infringement. Elevations retained a survey expert to measure the likelihood of consumer confusion between Elevations Credit Union and Elevate Credit Union. Elevate retained MMR Strategy Group expert Dr. Justin Anderson to rebut that survey evidence. The judge ultimately excluded the Elevations likelihood of confusion survey, in a decision explaining the importance of methodology and credibility in survey evidence testimony.
Standards for Likelihood of Confusion
Intellectual property litigation often relies on consumer preference and perception surveys as evidence. Consumer surveys–often performed by expert witnesses like Dr. Anderson–are among the only ways to measure consumer preference and perceptions, and the standards for how to evaluate those measurements are made in court rules and case law. Under Rule 702 of the Federal Rules of Evidence, expert witness testimony must be “the product of reliable principles and methods,” and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), permits parties to raise objections to the reliability of expert witnesses, including reliability of a survey’s design and execution. It is our job to make sure that surveys meet reliability criteria in their design, or face being excluded.
The Elevations Survey Design Flaws
In the Elevate v. Elevations case, Dr. Anderson’s report outlines methodological flaws in the survey that the court accepted when it excluded the opposing expert’s report. First, the survey population sought to replicate Elevate’s audience in northern Utah, instead of Elevations’s audience in Colorado. Dr. Anderson noted that this would not accurately depict market conditions for Elevations. The court agreed, saying “EFCU [Elevate] only operates, advertises, and has a presence in three counties in Utah.”
Complicating matters was the opposing expert’s choice of a Squirt format survey, where respondents are shown both products or brands, side by side or sequentially, along with control products or brands. This is another failure in survey design, because to measure confusion accurately with a Squirt survey, conditions must be as close as possible to real-world market situations. Dr. Anderson explains in his rebuttal that an Everready format would have been more accurate to measure confusion using internet search results.
Further, Dr. Anderson argued that using the Bing search engine and in the iPhone app store do not accurately replicate marketplace conditions, because these search tools are not commonly used. The court accepted this argument, and also opined that “by constructing the survey under the assumption that it is reasonably common for people to select a financial institution based only on internet search results, [the opposing expert] may have made the survey sample overinclusive.”
Another flaw in methodology that Dr. Anderson identified was a failure to specify whether the survey measured reverse or forward confusion. It measured the senior mark, Elevations, and the control name UofC Credit Union, with a presumption that the survey would measure for both forward and reverse confusion. If the opposing expert had designed a survey for reverse confusion measuring whether users would mistakenly assume the Elevate (the junior mark) was affiliated with Elevations (the senior mark), it may have been more methodologically sound. Dr. Anderson’s report also noted that since the survey measured marks side by side, without a filter question to determine ____, the findings would be unreliable.
In its ruling, the court further pointed out that the survey failed to measure initial interest confusion–temporary confusion that is corrected before any purchase can be made–as well. Elevations argued that its survey measured initial interest confusion because the “survey undoubtedly measured this because ‘consumers were clearly confused at the initial point of commercial impression.” However, that is a conclusion, not an explanation. Elevations has not explained how the survey methodology is appropriate for, or how it measured initial interest confusion.”
Lastly, the court questioned the credibility of the expert in this particular matter because of a failure to convincingly and accurately record the manner in which they collected the internet research. The report did not include the following details that are significant: (1) the dates of each search; (2) the precise search terms used; (3) the search engine used for each search; (4) the type of hardware on which they ran each search; and (5) records of the actual results. Any one of these flaws could cause a likelihood of confusion survey to be excluded as evidence, because an expert witness report should be scrupulous in documenting every detail of the survey, survey universe, methodology, and experience of the surveying team and testifying expert.
Choosing Your Survey and Your Survey Firm, Wisely
To avoid wasting time, money, and reputation, it is best to hire an expert witness who is careful and thorough about avoiding foreseeable mistakes that could get the survey excluded. If you require a survey measuring consumer perception, or the likelihood of confusion between marks, perform due diligence in your choice of research firm and testifying expert. MMR Strategy Group has over forty years of experience conducting reliable research that has been accepted by federal courts and other regulatory bodies. If you are in an intellectual property dispute that requires a litigation survey, contact MMR Strategy Group.