The ‘Reverse’ Confusion Issue

Kargo Global, Inc. v. Advance Magazine Publishers, Inc.

U.S. District Court for the Southern District of New York
August 6, 2007

Judge: John F. Keenan, U.S. District Judge

ISSUE: Plaintiff Kargo Global, Inc., a distributor of online content for wireless devices, argues that the defendant’s defunct (Conde Nast) magazine, “Cargo,” infringed on the plaintiff and caused damages through the concept of “reverse confusion.” (Cargo was a short-lived men’s shopping magazine that promoted clothes, cars, electronic gadgets and other luxury items.) Also at issue are defendant’s attempts to exclude a report and testimony of survey expert, Dr. Jacob Jacoby and plaintiff’s attempts to exclude report and testimony of defendant’s expert, Dr. Itamar Simonson.

SURVEY EXPERTS. Dr. Jacoby, a professor at New York University, is perhaps the most well know survey expert in America. In this case, Dr. Jacoby directed two Internet surveys, using survey panels. After a rigorous screening process, respondents were shown work product from different media including, “Cargo.” This sophisticated protocol was designed to determine if what was shown came from the same source that produced the magazine. Dr. Simonson, a professor at Stanford University and also a well known intellectual property survey expert, had Opinion Research Center conduct two telephone surveys. Respondents in the first survey were questioned whether they associated “Kargo” with any product. Respondents in the second survey were questioned whether they associated “Powered by Kargo” with any product or service.

RESULTS: Dr. Jacoby’s survey found likelihood of confusion of 17.7 %, which was reduced to 15.5% from “noise” uncovered by a control group. No respondents in either of Dr. Simonson’s surveys found any awareness of either “Kargo” or “Powered by Kargo.”

REBUTTAL ARGUMENTS: The two surveys served to rebut each other’s findings. The court’s opinion made no use of any other adversarial survey experts.

RESOLUTION: The court chose to exclude the findings produced by Dr. Jacoby and dismissed Dr. Simonson’s findings as “moot” since the Jacoby survey was excluded.
No damages were awarded.

SUBJECTIVE OPINION: The concept behind “reverse confusion” is when a well-known new party attempts to hijack the trademark of a lesser-known senior user. Dr. Jacoby should be congratulated for undertaking an extremely creative and sophisticated survey. However, the case foundation appears weak and the survey findings of less than 20% were marginal at best. Judge Keenan didn’t buy any of it and singled out Dr. Jacoby’s work as “so flawed that its probative value is substantially outweighed by its potential for unfair prejudice and likelihood that it will confuse or mislead a jury.”
The Simonson survey, on the other hand, was clean and straightforward — but as it turned out — unnecessary.