A recent Tenth Circuit opinion offers guidance as to what may be unacceptable methodologies for a likelihood of confusion survey. In Water Pik, Inc. v. Med-Systems, Inc., 726, F.3d 1136 (10th Cir. 2013), the Court affirmed the trial court's summary judgment ruling that appellee's ("Water Pik") mark was not likely to cause confusion with appellant's ("Med-Systems") mark. Id. Med-Systems' word mark, SINUCLEANSE, was "conspicuously feature[d]" as "the stylized term 'SinuCleanse.'" Id. at 1141. Water Pik's word mark was SINUSENSE, and on packaging it appeared with a "waterpik" logo. Id. Both companies used these marks on sinus irrigation products. Id. at 1140-41.
Med-Systems offered the following Internet consumer survey, designed by its expert, as evidence of actual confusion:
After first answering a few questions for demographic identification and to establish their experience with purchasing healthcare products, respondents were shown the unitalicized typewritten words "SinuCleanse," "SinuSense," and "NeilMed" [another competitor in the same market] in varying orders and were asked (Question 3) what came to mind when they saw those marks. . . . They then viewed packages for SinuCleanse-branded products, SinuSense-branded products, and NeilMed-branded products in varying orders and were asked to rank, on a scale of one to seven, how appealing they found the design of each package. These initial questions were to disguise the goal of the survey while focusing attention on the packages.
Next, respondents were shown packaging for saline refill packets that carried the SinuCleanse, SinuSense, and NeilMed brands. After viewing each brand's package in isolation, then all three packages side by side, respondents were given a sequence of three questions aimed at measuring confusion. The first asked whether they thought that two or more of the displayed products were made by the same company. The second asked whether they thought that one or more of the companies whose brands were displayed had a business relationship with one of the other companies. And the third asked whether they thought that one or more of the companies whose brands were displayed had obtained permission or approval from one of the other companies. Respondents were presented with the second question only if they responded no or not sure to the first, and they were presented with the third question only if they had responded no or not sure to the second. Respondents who answered yes to any one question were asked to identify which two or three brands they thought were related and why. The survey also used this same procedure, with the same questions, to gauge reactions to neti pots branded as SinuCleanse, SinuSense, and NeilMed. In both cases, after the three-question sequence all respondents answered a final question in which they were shown three pairs of typewritten words--"SinuCleanse and SinuSense," "NeilMed and SinuCleanse," and "SinuSense and NeilMed" --and were asked (Question 10) to rank the similarity between the paired words on a scale from 1 to 7.
Id. at 1144 (internal citations omitted). The district court ruled that the survey results were "devoid of any probative value and therefore irrelevant." Id. at 1146.
The district court concluded that "Questions 3 and 10 did not present the marks as they would appear to a consumer," namely, "divorced from packaging, and without any italics; and the SinuSense mark was unaccompanied by the distinctive 'waterpik' logo that appears on packaging for SinuSense products." Id. at 1145. The Tenth Circuit agreed, explaining that, by presenting both marks differently from how they appear on packaging, these questions "exaggerated the similarities between the two marks, likely increasing the confusion of the respondents." Id. at 1146-47.
Furthermore, "by suggesting the possibility that SinuSense might be connected with another brand, and limiting the candidates to SinuCleanse and NeilMed, the survey questions risked sowing confusion between SinuSense and SinuCleanse when none would have arisen otherwise." Id. at 1148. The Tenth Circuit cited a number of cases from different circuits as support for the premise that survey questions cannot improperly suggest a link between a plaintiff and defendant. See id. at 1147-48 (citing Fifth and Second Circuit cases and a Fourth Circuit district court decision).
Additionally, the district court concluded that "the survey presented images of Water Pik's products and images of Med-Systems' products side by side, thereby failing to recreate the true conditions of the marketplace." Id. at 1145. The Tenth Circuit explained that
[a] side-by-side comparison can emphasize differences in marks that might not be noticed by the actual shopper . . . or it may bring to mind the senior mark when the respondent would not otherwise have thought of it . . . . Although Med-Systems did point to screenshots of search results from online shopping websites, where both SinuCleanse products and SinuSense products are featured, these screenshots do not support its contention that a side-by-side comparison was the proper survey design. In none of the screenshots are SinuCleanse, SinuSense, and NeilMed products isolated and displayed next to one another; rather, they are scattered among a host of other sinus remedies . . . . The district court could properly distrust the survey's side-by-side format.
Id. at 1145. Finally, the Tenth Circuit observed that, even if the expert's survey was methodologically sound, it did not show consumer confusion because it had not reliably controlled for "'background noise,' or false positives arising from something other than the particular confusion that is alleged and that the survey aims to capture." Id. at 1149.
The district court also concluded that the universe of respondents ("potential purchasers of sinus remedies in general, not potential purchasers of sinus-irrigation products in particular (which account for only 1% of sinus-remedy sales)") was overinclusive, and that the expert "skewed the survey population to ensure that 42% of respondents were older than 55, but an independent market study indicated that fewer than 29% of sinus-remedy consumers belonged to that age group." Id. at 1145. The Tenth Circuit did not add analysis to these findings.
This opinion offers clear and precise reasons for potentiailly rejecting a survey, which may assist in designing defendable surveys. While the Third Circuit "is generally more skeptical of surveys" than other circuits "and is often willing to disregard such evidence for flawed methodology, " Patrick M. Bible, Defining and Quantifying Dilution Under the Federal Trademark Dilution Act of 1995: Using Survey Evidence to Show Actual Dilution, 70 U. Colo. L. Rev. 295, 340 n.112 (1999), it has still recognized that survey evidence is "the most direct method of showing the likelihood of confusion created by an infringing defendant." Charles Jacquin Et Cie, Inc. v. Destileria Serralles, Inc., 921 F.2d 467, 475 (3d Cir. 1990); cf. Sabinsa Corp. v. Creative Compounds, LLC, 609 F.3d 175, 190 (3d Cir. 2010) (Ambro, J., concurring) (noting that plaintiff "could have easily conducted a survey of customers to assess actual confusion in the relevant market. Given this, we could reasonably infer that [plaintiff] expected that any survey results would undermine its case").