Overview:
How did likelihood of confusion survey methodology factor into the Clase Azul and Casa Azul trademark decision? Learn the importance of the two major likelihood of consumer confusion survey formats, Squirt and Eveready, to the outcomes of trademark infringement cases.
Clase v. Casa Case Facts:
Clase Azul and Casa Azul both manufacture and sell tequila products. Both names are Spanish and translate to “blue class” (Clase Azul) or “blue house” (Casa Azul). Clase Azul sells a premium distilled tequila that starts at $135 per bottle, in distinctive ceramic bottles stored behind locked shelves in retail locations and in restaurants. Casa Azul sells distilled tequila and canned mixed drinks (tequila, carbonated water, and flavorings) in retail locations, near mid-market brands and wine coolers. Marketing of Casa Azul is skewed to younger demographics, due to the price point and type of products, whereas the marketing and advertising of Clase Azul is directed at connoisseurs of tequila.
Clase Azul has been selling its brand of tequila since 2003, and registered a trademark in 2008 with the United States Patent and Trademark Office. Casa Azul also has a trademark registered in 2008, originally for its canned mixed drinks; it expanded its product line and trademark in 2018 to include distilled tequila in bottles. Clase Azul is a product of Casa Tradición S.A. de C.V., which brought a trademark infringement action against Casa Azul, alleging likelihood of consumer confusion between the brands and seeking a permanent injunction.
Likelihood of Confusion Survey Clase in Session
In lawsuits involving trademark allegations, measuring consumer confusion between trademarks can help either side bring evidence of likelihood of confusion (or lack thereof). In this case, both Clase Azul and Casa Azul submitted survey evidence regarding the likelihood of confusion (or lack thereof).
Both parties’ surveys were designed to measure whether consumers were likely to believe that the Casa Azul products were made, distributed or sponsored or approved by the owner of the Clase Azul brand. The Casa Azul survey used the Eveready survey format to measure confusion, and the plaintiff used a modified version of the Squirt survey format. In the Eveready survey format, only the alleged infringer’s brand or products are shown; a Squirt survey shows both brands or products, mixed with those of competitors who are not part of the litigation.
Best in Clase: Squirt vs Eveready Survey Formats
The Clase Azul survey, which used the modified Squirt format, showed respondents the plaintiff’s Clase Azul tequila bottle next to the box it comes in, then showed two canned beverages, one from defendant Casa Azul and another made to look like the Casa Azul product, but with the name Loma Blanca, which was used as a control. This survey found a net confusion rate of 29.2%.
Casa Azul submitted two surveys that used the Eveready format, one measuring consumer confusion as to the canned beverages and one measuring confusion as to bottled tequilas. In the survey involving canned beverages, respondents were shown cans of Casa Azul and asked whether they believed the brand was from, affiliated with, or sponsored by Clase Azul. In the bottled beverages survey, respondents were shown three bottles of the Casa Azul tequila–the brand’s blanco, reposado, and añejo varieties–and asked the same questions about source, sponsorship, or affiliation. This survey used a fictional control tequila, Agave Azul. The net confusion measure from the bottled beverages survey was 1.7% and the net confusion measure from the canned beverages survey was 0.33%. Both measures were below 10%, which is below the threshold that is often used for finding likelihood of confusion.
Clase Azul’s survey expert testified that the defendant’s expert improperly used the Eveready format, because the Clase Azul brand is not well-known enough to be at the top of consumers’ minds. When products are proximate in the marketplace, she testified, this survey format generates low confusion measures due to low brand awareness, not due to lack of infringement. Casa Azul also supplied an expert to rebut the survey evidence from Clase Azul’s modified Squirt survey. This expert argued that the Squirt format was flawed because the products are not proximate in the market and are sold in different areas of the store, and that the survey did not include any third-party products.
Confusion Conclusion and Court Decision
The court excluded the Clase Azul survey evidence and accepted the Casa Azul survey evidence. It ruled that the Clase Azul survey evidence was not reliable because it used the Squirt survey format, which “did not reflect the ways the products appear in the marketplace.” Whereas, the court wrote, the Eveready methodology was “appropriate to the actual marketing of the products at issue” and was therefore “the more reliable method.” And as a result of those decisions, “the survey evidence does not show a likelihood of consumer confusion.”
After a bench trial, the court ruled that the defendant is not liable for trademark infringement. In its decision, the court discussed the elements of likelihood of confusion, notably product similarity and market proximity. While both brands sold distilled tequila, the target demographics, channels for marketing, types of tequila, and prices were too distinct to be in competition. The canned mixed drink was “plainly dissimilar” to the premium tequila.
The court also noted that the only admitted survey evidence showed a very low likelihood of confusion. This decision underscores the importance of conducting a properly designed, situationally appropriate survey. When surveys do not accurately reflect the consumer’s experience in a marketplace choosing a product, the measures they produce will not be accurate.
If you are involved in a trademark infringement action, MMR Strategy Group offers decades of experience in designing and conducting reliable Squirt and Eveready format surveys to measure consumer confusion.
To learn more, see Likelihood of Confusion, Using the Squirt Survey Format, and Using the Eveready Survey Format.