Alzheimer's Disease & Related Disorders Ass'n, Inc. v. Alzheimer's Found. of Am., Inc.
Docket: 10–CV–3314 (AJN); Rel: 10–CV–5013 (AJN)
Court: District Court, S.D. Illinois; April 20, 2018; Federal District Court
In September 2017, the Court conducted a bench trial involving two Alzheimer's charities: the Alzheimer's Disease and Related Disorders Association (the "Association") as the Counterclaim Plaintiff and the Alzheimer's Foundation of America (the "Foundation" or "AFA") as the Counterclaim Defendant. The Association alleged that AFA infringed on its trademarks by purchasing Association trademarks as search engine keywords and using the name "Alzheimer's Foundation," claiming trademark infringement and false designation of origin under the Lanham Act. The Court ruled in favor of AFA, concluding that the Association did not demonstrate that AFA's actions were likely to cause consumer confusion.
The procedural history indicates ongoing litigation between the two charities since 2007, beginning with a Virginia state court case over a trust bequest. Subsequent federal cases included AFA's lawsuit against the Association in 2010 regarding checks, and the Association's countersuit for trademark infringement. Most claims were dismissed by Judge Sweet, leaving only the Lanham Act claims from the Association's countersuit. In 2014, the Association sought a preliminary injunction to stop AFA from using its trademarks, but Judge Sweet denied this motion, finding the Association failed to establish a likelihood of success on the merits or other necessary factors for such an injunction.
The Court established a motions and trial schedule after reassignment and received motions from AFA to exclude the Association's expert witness reports and testimony, as well as a motion in limine concerning a damage theory. The Court reserved judgment on these motions. A six-day bench trial commenced on September 6, 2017, following standard procedural practices for non-jury cases. Prior to trial, both parties submitted direct and rebuttal testimony declarations, anticipated exhibits, deposition designations, and proposed findings of fact and conclusions of law. During the trial, only witnesses intended for cross-examination were called, and deposition designations were read into the record. The Court heard from 25 witnesses, including 13 who provided live testimony, and admitted around 280 exhibits. Post-trial memoranda and updated findings were submitted by October 25, 2017, followed by closing arguments on December 5, 2017.
The Alzheimer's Association, established in 1980 and led by CEO Harry Johns since 2005, is the largest private non-profit funder of Alzheimer's research, operating more than 80 local chapters across the U.S. Significant changes occurred in 2015-2016 with several chapters merging or disaffiliating from the Association. In fiscal year 2016, the Association raised over $160 million and spent $133.6 million on programs, including substantial investments in public awareness and education. The Association achieved nearly 9 billion media impressions and over 41 million website visits in that year. Despite its efforts, awareness of the Association among the general population remained low compared to other health charities, with only 3% naming it when prompted about health charity organizations. Awareness among targeted demographics ranged from 10% to 20% from 2009 to 2015.
Aided awareness of the "Alzheimer's Association" among the general population was approximately 25-32% and 35-47% among "Champions" from 2011 to 2015. In contrast, the Alzheimer's Foundation of America (AFA) had awareness levels of 15-19% and 25-32%, respectively. The Alzheimer’s Association owns multiple trademarks, including the key mark ALZHEIMER'S ASSOCIATION (U.S. Reg. No. 2,850,223), registered since June 2004 but in use since 1988, alongside other related marks like WALK TO END ALZHEIMER'S® and MEMORY WALK, which significantly contribute to its fundraising efforts. In 2016, these events engaged nearly 500,000 participants and raised over $78.6 million. The Association's website prominently features "alz.org" and its principal color is purple. Notably, the Association does not hold exclusive rights to the terms "Alzheimer's" or "Association" alone.
The AFA, established in 2002, aims to provide care and services for individuals with Alzheimer’s disease and their families. Led by Charles J. Fuschillo, Jr. since 2014, AFA has over 2,600 member organizations and awarded millions in grants for services like respite care. In 2010, AFA reported approximately $6.6 million in revenue from contributions and events. Its website uses teal and white colors. AFA holds various trademarks, including "AFA Alzheimer's Foundation of America" (U.S. Reg. No. 3,179,067) and applied for the "Alzheimer's Foundation" mark, which was registered on December 23, 2014 (U.S. Reg. No. 4,661,324), with first use claimed in 2004. AFA has disclaimed exclusive rights to certain literal elements of its marks.
AFA asserts that it has used the name "Alzheimer's Foundation" since its establishment, primarily in press releases and online advertising, with some limited instances in other media. The name has been most prominently featured in online advertisements, although the Association does not claim rights to "Alzheimer's Foundation" and does not use it in its own advertisements or website.
The document discusses keyword advertising and search engine algorithms, explaining that search engines like Google and Bing display both organic and sponsored results, with paid ads appearing first. Search Engine Optimization (SEO) techniques, including metatags, are utilized to improve visibility in organic searches, though Google has stopped using metatags in its algorithm since 2009. Advertisers purchase keywords to ensure their ads appear as sponsored results, with Google AdWords charging based on user clicks.
The bidding process for keywords is conducted through real-time auctions, and neither Google nor Bing limits the number of advertisers per keyword, maintaining a non-exclusive bidding environment. The order of ads is influenced by bid amounts and relevancy, with Google and Bing allowing the use of trademarks as keywords even in the face of complaints. Notably, AFA has not been prevented from purchasing keywords associated with the Association Marks.
Advertisers frequently bid on competitors' trademarks as keywords to enhance online visibility. Both the Alzheimer's Foundation of America (AFA) and the Alzheimer's Association have utilized online marketing strategies to broaden audience reach. AFA's primary goal was to drive traffic to its website to increase online donations, engaging consultants like Correlative for keyword selection and ad content development. Since June 7, 2004, AFA has branded itself as "Alzheimer's Foundation" in online ads, achieving over 30 million impressions by the end of 2009. AFA invested $300,000 to $500,000 annually on keyword purchases, including Association Marks, and actively purchased "alzheimers association" keywords from late 2007 onward. Although AFA ran ads containing "Association" from April 2012 to June 2014, it ceased this practice following legal correspondence but continues to purchase related keywords.
The Association initiated its own keyword marketing in April 2007, spending approximately $150,000 annually in 2015-16 and leveraging Google Grants for an additional $480,000. Initially, the Association bought "Alzheimer's Foundation" keywords but removed them in August 2010, believing their actions were proper. The Association has never used "Alzheimer's Foundation of America" as a keyword. In August 2016, AFA's counsel raised concerns about an Association chapter purchasing "Alzheimer's Foundation" keywords, leading the chapter to stop after merging with the Association. Current AFA ads may feature "Alzheimer's Foundation" in standard typeface, with a website URL and a descriptive tagline, and typically appear above the Association's ads in search results.
Exhibit 71 includes various trial exhibits demonstrating that Google search results for "Alzheimer's Association" display ads in differing orders and text variations, yet maintain a similar context for consumers. Notably, AFA has employed the term "Alzheimer's Foundation" in its advertising and included "Alzheimer's Association" as part of its competitor-targeting campaign, which constituted approximately 40% of its marketing budget. In October 2011, AFA's SEO consultant Chris Leone advised increasing the budget for this campaign, which yielded more clicks for AFA's ads compared to its own branding at times. AFA also collaborated with a vendor, Vizions, for SEO strategies incorporating keywords related to the Association, but did not implement all recommendations, particularly those involving Association Marks. AFA ran an ad using "An Association of Care and Support," which included the terms "Alzheimer's" and "Association," but they were not adjacent. Following a complaint from the Association, AFA retracted this ad. Leone described the strategy of competitor-targeted advertising as effective in providing options for users searching for the larger organization. The Association argues that AFA's use of metatag keywords from 2005 to 2008 and mid-2011, including terms trademarked by the Association, is pertinent. However, the court finds AFA's metatag practices largely irrelevant due to their diminished impact on consumer search behavior, as modern search engines have moved away from using metatags, relying instead on algorithms. To donate online to AFA, consumers must visit its website rather than relying solely on keywords or ads.
AFA's website allows users to navigate back if they decide not to donate, while proceeding to the donation page requires clicking "Donate" or "Support Us." The donation page prominently features "AFA" or "Alzheimer's Foundation of America" with no mention of the Association or its marks, indicating no visibility of the Association's Marks during the donation process. Evidence presented by the Association indicates prior acknowledgment of confusion by AFA, including a 2004 letter from AFA’s CEO expressing concern over potential confusion from a web search for "alzheimers foundation." However, no witness explained this letter, which may not relate to the current confusion claims. In litigation, AFA alleged unauthorized use of its marks due to the Association’s handling of checks made out to "Alzheimer's Foundation," although this issue is not central to the current case. Additionally, a 2014 internal communication from AFA suggested confusion among online donors regarding the identity of the organizations. Check-related evidence reveals that the Association received over 5,700 checks made out to "Alzheimer's Foundation," totaling more than $1.5 million, significantly outnumbering checks made payable to AFA. Conversely, AFA also received over 5,000 checks incorrectly made out to the Association. Disputes exist between the parties regarding the significance of this evidence, including the volume of confusion and the relationship between mislabeled checks and AFA's operational practices. AFA claims the erroneous checks represent a small percentage of its total receipts, while the Association contests these figures as misleading.
The Association acknowledges that the checks received in connection with its claims were a minor fraction of the total checks processed during the specified periods. Mr. Fuschillo's assessment of the checks made out to the Association as "de minimis" lacks credibility, as he could not specify the total checks received by AFA or those payable to the Association, nor did he review relevant records. On July 30, 2014, the Association's general counsel received checks meant for it along with an obituary instructing donations to be sent to the Association, linked to an AFA donation form. A donor confirmed her intent to donate to the Association, stating she was unaware she was on the AFA site. However, the Association failed to provide substantial evidence connecting AFA's keyword practices to donor confusion, nor did it present testimonies from other donors experiencing similar confusion. While there were claims of actual confusion, such as in a legal case regarding a will bequest to "Alzheimer's Foundation," there was no evidence tying this confusion to AFA's actions. The Association also referenced instances, like a mistake made by NBC and a Celebrity Family Feud episode, but did not link these errors to AFA. Additionally, the Association introduced survey evidence and expert testimony from Dr. Kent Van Liere, a seasoned marketing researcher, but the relevance of this evidence to the confusion claims remains unclear.
Van Liere's studies were challenged by AFA through a Daubert motion aimed at excluding his testimony, though AFA did not dispute his qualifications as an expert. Instead, AFA engaged its own expert, Hal Poret, to critique Van Liere's surveys; however, Poret did not conduct an independent survey. The Court ultimately denied AFA's motion both during Van Liere's examination and at the trial's conclusion, opting to consider all evidence presented.
In Study 1, Van Liere assessed consumer confusion between "Alzheimer's Association" and "Alzheimer's Foundation." Respondents viewed the Alzheimer's Association mark, followed by either a test condition featuring "Alzheimer's Foundation" or a control condition with "Alzheimer's Trust." Results showed that 50% of respondents associated the Foundation with the Association, compared to only 16% for the Trust, indicating a 34% net confusion rate. Van Liere concluded that the use of "Alzheimer's Foundation" likely confused a significant portion of consumers.
AFA's expert Poret raised three main criticisms of Study 1, particularly questioning the selection of the survey population. Van Liere defined the relevant universe as individuals who had recently donated or were likely to donate to Alzheimer's-related charities. Screening data indicated that 85% of respondents qualified based on potential future donations, and around 65% expressed willingness to consider donating to various charities. Poret contended that the data suggested respondents were primarily from the general public without specific ties to Alzheimer's charities. The Court, however, found no significant error in Van Liere's definition of the survey population, noting that potential consumers could include those without recent donation history.
AFA contends that a stricter screening of participants likely would not have significantly impacted the study results due to the low awareness of both charities. AFA also criticizes Study 1 for not accurately reflecting marketplace conditions, as it presented only the text "Alzheimer's Association" and "Alzheimer's Foundation" in plain black and white, suggesting that real-world consumers encounter these terms with color, design, and additional context. The Association counters that the study's design is suitable for assessing confusion since the terms would appear similarly in online searches without logos or colors. AFA highlights that the marks are usually seen with their own unique accompanying content, which varies for each. While both marks could be viewed simultaneously in advertisements, the court finds that the artificial nature of Van Liere's word association test does not render it unreliable or devoid of probative value. However, it acknowledges that the test's context reduces its relevance to actual confusion.
AFA further challenges the selection of "Alzheimer's Trust" as a control term, arguing that it led to inflated confusion rates. The court concurs, stating that a control term should closely resemble the test stimulus except for the characteristics under assessment. Dr. Van Liere's choice resulted in higher confusion rates for "Alzheimer's Foundation" compared to other pre-tested controls, which would have produced lower net confusion rates. Dr. Van Liere had initially considered using "Alzheimer's Charity" but opted for "Alzheimer's Trust" after concluding that "Alzheimer's Charity" sounded more like a category than a specific entity. Notably, Dr. Van Liere did not receive results from the pre-tests, despite those results being disclosed to the Association's attorneys.
Dr. Van Liere claimed ignorance regarding the methodology used by NERA staff in pre-test studies. When questioned by the Court about whether his work was influenced by these studies, he found it difficult to assess such influences, despite overseeing and designing the study. The Court perceived him as lacking candor concerning the impact of pretest surveys. Although conducting pre-tests is generally acceptable for study improvement, the lack of credible justification for alterations made from the pre-test to the final survey raised concerns about possible improper motives.
The term "Alzheimer's Trust" was selected by Dr. Van Liere and his staff as a control term because it was a two-word combination that sounded legitimate but did not exist in the marketplace. This choice aimed to avoid confusion that could arise if "Alzheimer's Foundation" was the only two-word name compared with the "Alzheimer's Association." However, the Court noted that "Trust" is a unique and ambiguous descriptor that could mean more than just a charity, which complicates its effectiveness as a control. Alternative control terms, such as "Alzheimer's Federation" or "Alzheimer's Foundation of America," could have been used to reduce confusion.
The Association argued that AFA's use of the two-word mark specifically led to consumer confusion, suggesting that testing with their full name would be more appropriate. While the Court acknowledged that no perfect control exists, it found the first study—focused solely on sequentially presented words with the word "trust"—to be unconvincing, especially given evidence that other control terms with three or five words generated significantly higher confusion levels.
Dr. Van Liere's second study aimed to mimic consumer behavior when searching for "Alzheimer's Association" and analyzing the results. The study revealed that many consumers were initially confused by the search results, a confusion that persisted even after visiting the AFA's website. In the test condition where respondents saw AFA's ads alongside search results, 42% believed the AFA ad was affiliated with the Alzheimer’s Association, compared to only 22% in the control condition, resulting in a net confusion rate of 20%. Furthermore, 74% of those initially confused remained so after viewing AFA's webpage. Dr. Van Liere concluded that AFA’s keyword advertising likely caused confusion at both the search results and landing page stages.
AFA raised four main criticisms of the study, primarily focusing on the definition of the survey population. Although the court acknowledged that the sample may not perfectly represent potential donors or searchers, it deemed the population's selection not substantially erroneous. AFA also contended that the survey did not accurately replicate market conditions, arguing that respondents must have prior knowledge of the Alzheimer’s Association to avoid confusion with AFA's ad. The court found Dr. Van Liere's assertion that participants understood they were searching for a specific organization reasonable, but acknowledged that real-world searchers might lack this understanding, potentially weakening the relevance of the study’s results to actual consumer behavior.
AFA criticizes the test stimulus used in a study for being biased, noting that all respondents saw a search results page where the first sponsored ad was AFA's, with no ad for the Association. This setup does not reflect real-life conditions, as the Association also bids on its own trademarks and would typically appear in the sponsored ads. AFA argues that not rotating the order of ads created bias, leading participants to more likely choose AFA's ad as the organization they were searching for, a phenomenon supported by existing research on response-order effects. Although this bias suggests that the actual confusion percentage might be lower, the study's use of real ads from a legitimate web search adds some credibility, meaning a finding of likelihood of confusion could still be valid under the Lanham Act.
Further, AFA critiques Study 2's control stimulus for using a version of the search results with all sponsored ads removed instead of a control that eliminated only AFA's ad or its use of the term "Alzheimer's Foundation." In this setup, confusion was measured by whether respondents clicked on a Wikipedia or news link instead of the Association's webpage. AFA argues this approach fails to account for the natural tendency of respondents to select related pages, thus inflating confusion rates. While this criticism is acknowledged, it does not negate the study's main finding that AFA's landing page does little to alleviate preexisting confusion after a wrong link is clicked. Additionally, the control stimulus's flaw lies in not including non-infringing sponsored ads, which would better assess confusion rates, as the control's first search result was the correct Association site, unlike the test condition featuring AFA's ad. Dr. Van Liere emphasized that a control should closely mirror the test stimulus, barring the characteristics being evaluated.
Van Liere's defense centers on defining "key elements at issue" as "the sponsored links," arguing that proper controls should mirror test conditions except for the focal issue. However, the actual focus should be on the allegedly infringing AFA ad, not on sponsored ads in general; thus, only the infringing item should have been addressed. Study 1 aimed to assess whether the use of "Alzheimer's Foundation" caused confusion, while Study 2 evaluated if AFA's sponsored ads led to confusion during searches for the Association. The court determined that the studies lacked credible evidence of consumer confusion due to deficiencies in Van Liere's methodology, particularly his choice of controls, which weakened the validity of the results. Although the court denied a Daubert motion, it suggested that the study evidence was not robust.
The Association presents circumstantial evidence indicating AFA acted willfully or in bad faith regarding the name "Alzheimer's Foundation" and keyword purchases. A timeline shows that on April 13, 2004, AFA's then-CEO expressed concerns about consumer confusion arising from searches for "alzheimers foundation," yet by June 2004, AFA began purchasing the keyword "Alzheimer's Association." An email in December 2007 indicated AFA's awareness of the trademark implications of this phrase. Additionally, litigation in Virginia revealed that AFA learned of the Association's practice of depositing checks made out to "Alzheimer's Foundation." After the litigation concluded, AFA registered the name in multiple states. In April 2010, AFA sued the Association, claiming unfair competition and trademark infringement, while simultaneously asserting that consumer confusion existed regarding checks made payable to "Alzheimer's Foundation." AFA’s first use of the '014 Mark occurred six months after filing its lawsuit, leading the Association to argue that AFA's actions were driven by an intention to exploit known consumer confusion, as evidenced by AFA's SEO strategy that involved purchasing Association Marks as keywords.
AFA ran an advertisement containing the word "association," which was discontinued after a complaint from the Association. The Association alleges that AFA's patent counsel submitted two false specimens of use to misrepresent its branding as "Alzheimer's Foundation," despite known confusion surrounding the name. In 2014, AFA applied for a standard character mark for "Alzheimer's Foundation," which is now on the supplemental register. AFA's application included a magazine page where "of America" was obscured, a mistake acknowledged by Kristen Traina, AFA's trademark counsel associate. After the Association highlighted the false specimen issue, Traina substituted it with press releases accepted by the USPTO.
In March 2017, AFA filed a "Section 8" declaration claiming ongoing use of its '014 composite mark, again presenting a specimen that omitted "of America" and had not been used in commerce. Following the Association's objection, AFA amended the filing, which the USPTO accepted. Emily Santana, another associate, mistakenly filed a mock-up of the AFA website as evidence. The amended filing did not distinguish the '014 Mark from the '067 Mark, which includes "of America." The Association contends that AFA rarely uses "Alzheimer's Foundation" in advertising, primarily doing so in contested keyword contexts. Although the Section 8 filing bore the electronic signature of AFA's acting CEO Charles Fuschillo, neither he nor trademark counsel Mark Ingber had seen the false specimen prior to submission. Fuschillo had permitted the Ingber Law Firm to apply his signature to USPTO documents, and there was no evidence that AFA was aware of the false specimens.
Regarding damages, the Court did not find for the Association on liability, rendering detailed damage theories unnecessary. However, the Association proposed three alternative damage theories, one presented by accounting expert Marylee Robinson, who calculated AFA's revenues linked to the name "Alzheimer's Foundation" from online searches, estimating damages of $5,005,509 from January 2010 to December 2016.
Robinson's analysis aimed to quantify AFA's revenues linked to the use of Association Marks as keywords by tracking online revenues within 30 days post-search. Her damage estimate for January 2010 to December 2016 was $1,220,264 but relied on questionable assumptions, notably that all donors who searched using Association Marks were confused and would have otherwise donated to the Association. This included donors whose confusion may have been resolved before donating. In contrast, the Association's CEO, Harry Johns, calculated damages exceeding $11 million by comparing contributions from 2011 to 2016 against a 2006 baseline, asserting that all donations above this baseline resulted from AFA's alleged infringing actions, a claim lacking substantiation. His calculation encompassed various donation sources without distinguishing between online and offline contributions. AFA contended that neither Robinson's nor Johns' calculations demonstrated a causal link between AFA's actions and the claimed damages, a point the Court found valid, noting both analyses were based on unfounded assumptions. Additionally, the Association brought trademark infringement claims against AFA under two sections of the Lanham Act, asserting that unauthorized use of its registered marks in commerce likely caused confusion or deception, thus leading to potential civil liability.
Counts 3 and 4 of the legal action allege false designation of origin under sections 43(a)(1)(A) and (a)(1)(B) of the Lanham Act, which prohibits the use of terms or symbols in commerce that may confuse or deceive regarding the affiliation or origin of goods or services. Both trademark infringement and false designation claims under the Lanham Act share the same legal test. A plaintiff must demonstrate that the defendant has made "use in commerce" of the plaintiff's trademark, as defined by 15 U.S.C. § 1127. The Second Circuit has ruled that purchasing trademarks as keywords for internet advertising constitutes "use in commerce." The Association does not dispute that AFA has established such use.
To support its claims, the Association must prove it holds a valid trademark and that there is a likelihood of confusion regarding AFA's mark or use. The Court will analyze AFA's use of the name "Alzheimer's Foundation" and the use of Association Marks in keyword advertising together, as they are interrelated. The Association does not contend that AFA's use of "Alzheimer's Foundation of America" is infringing. Furthermore, it is noted that mere purchasing of a plaintiff's trademark as a keyword term has rarely been sufficient for establishing liability on its own.
In the case of Gen. Steel Domestic Sales, LLC v. Chumley, the court evaluates the likelihood of consumer confusion resulting from AFA's purchase of keywords related to Association Marks and its advertisement as "Alzheimer's Foundation." The analysis begins with determining the validity of the plaintiff's trademark, assessing whether it is distinctive and not generic. A registered trademark is presumed to be distinctive, and the Association's Marks, being registered on the USPTO Principal Register, are deemed protectable.
Once the marks' validity is established, the court shifts to the likelihood of confusion, which is a key issue in trademark infringement actions. The plaintiff must demonstrate a probability of confusion among consumers, not just a possibility. The court adopts the eight-factor balancing test from the Polaroid Corp. v. Polarad Electronics Corp. case to assess confusion in the context of keyword advertising. Each factor's resolution is a finding of fact, while the overall balancing is a conclusion of law, focusing on whether consumers are likely to be confused by the infringing actions.
The eight Polaroid factors include: 1) strength of the plaintiff's mark, 2) similarity of the marks, and 3) proximity of the products and their competitiveness. The court's analysis remains centered on the consumer's perspective regarding potential confusion.
Evidence that may support a claim of trademark infringement includes: the senior user's ability to develop a competing product, actual consumer confusion, bad faith by the defendant, product quality comparisons, and consumer sophistication. The Polaroid factors serve as a framework for evaluating likelihood of confusion, with emphasis on the specific type of confusion alleged. The Association claims that AFA’s name and practices could mislead consumers regarding their affiliation, termed "source confusion." This confusion can manifest at different stages of the purchasing process, primarily as point-of-sale confusion, where consumers mistakenly buy the defendant's product believing it to be the plaintiff’s. Alternatively, "initial interest confusion" occurs when consumers are attracted to the junior user's mark due to its similarity to the senior user's mark, even before making a purchase. In the digital context, initial interest confusion may lead potential customers away from the senior user's website, potentially causing harm despite consumers recognizing the competing source before purchase. The damage can arise from diverting consumer interest, influencing purchasing decisions through perceived associations, and granting unwarranted credibility to the junior user's product based on the senior user's reputation.
A plaintiff must demonstrate "intentional deception" to succeed in an initial interest confusion case in internet contexts, as established by the Second Circuit. The distinction between actionable and non-actionable initial interest confusion is illustrated through two scenarios. A clear bait-and-switch, such as using Association Marks in advertisements with no distinguishing features, constitutes infringement. Conversely, comparison ads, like those contrasting Pepsi and Coca-Cola, do not violate the Lanham Act because they clarify the source of the advertisement, minimizing consumer confusion. Trademark infringement fundamentally relies on consumer confusion caused by the infringing behavior; mere diversion without confusion is insufficient for liability. Therefore, purchasing a competitor's marks as keywords, absent additional confusing actions, is generally not actionable. The Court will analyze AFA's keyword purchases and advertising under the lens of potential consumer confusion versus legitimate competition.
The strength of a trademark is assessed based on its distinctiveness and marketplace recognition, with registered marks presumed distinct but potentially weak. Strength is evaluated by inherent distinctiveness and commercial strength, which can be categorized as generic, descriptive, suggestive, or arbitrary/fanciful. A generic mark describes goods generally and is unprotected, while a descriptive mark can only be protected if it has acquired secondary meaning.
A suggestive mark indicates product features without directly describing them, requiring consumer imagination to infer the nature of the goods. Fanciful or arbitrary marks do not need proof of secondary meaning for protection and are easier to prove infringement. The Association contends that its registered trademark negates the need for further analysis of its inherent strength. An incontestable registration, defined as continuous use for five consecutive years, is conclusive evidence of exclusive rights to the mark, but does not inherently imply the mark's strength. The court must still evaluate the mark’s strength as part of the first Polaroid factor. Registration adds weight to the assessment, but the mark itself must be examined deeply.
The strength of a mark is vital for determining potential consumer confusion, particularly in online advertising contexts. Consumers searching generic terms expect various sources, while those searching distinct terms are more likely seeking specific products, making them more susceptible to confusion from similar advertisements.
In analyzing the "Alzheimer's Association" mark, the court finds it descriptive, as it relates directly to a charitable organization focused on Alzheimer's disease. The term "Alzheimer's" refers to the disease itself, and "Association" is a common descriptor for charitable organizations, lacking distinctiveness. Together, the words merely form a basic descriptor without unique significance, rendering the mark conceptually weak.
Trademark law generally discourages granting exclusive rights to descriptive marks. However, the Lanham Act allows for the registration of descriptive marks if they can demonstrate acquired secondary meaning, indicating they identify the source of goods. The term "Alzheimer's Association" qualifies for protection as distinctive due to its established secondary meaning, which is determined through rigorous evidentiary standards. Factors indicative of secondary meaning include advertising expenditures, consumer studies linking the mark to a source, sales success, unsolicited media coverage, attempts to plagiarize the mark, and the length and exclusivity of its use.
While secondary meaning pertains to a mark's validity, commercial strength relates to infringement assessments. A mark can be validly protected under trademark law while still being commercially weak. The evidence used to determine a mark's commercial strength often overlaps with that for secondary meaning, as both assess real-world recognition.
The Alzheimer's Association asserts that its dominant position in the charity sector demonstrates the strength of its mark. As the largest Alzheimer's-related non-profit and significant research funder, it reported over $160 million in contributions and $44 million in advertising in 2016, alongside nearly 9 billion media impressions and over 41 million website visits that year. This extensive presence supports the claim that competitors, like AFA, have intentionally targeted the Association's marks, highlighting the significant recognition and consumer awareness surrounding the "Alzheimer's Association" name.
Consumer studies reveal that the "Alzheimer's Association" has not established strong secondary meaning, as evidenced by survey results indicating that only 3% of respondents recall the Association when asked for the top two health charities. Even when prompted about organizations involved in fighting Alzheimer's disease, only about 11% recognize the Association. Awareness among a targeted demographic, termed "Champions," has remained between 10% and 20% over eight years. Although the PTO's prior trademark registration offers prima facie evidence of secondary meaning, the court finds that the mark's descriptive nature and low consumer awareness render it weak both conceptually and commercially. This weakness influences the overall case disposition, as weak, descriptive marks receive narrower protection to avoid monopolizing descriptive terms and to align with consumer expectations regarding source identification. The likelihood of confusion is lessened when consumers perceive similar marks as descriptive rather than as indicating a common source.
The weakness of the trademark complicates distinguishing between consumers searching for the Alzheimer’s Association as a specific entity versus those seeking general Alzheimer’s charities. This ambiguity is further exacerbated by the descriptive nature of both parties' marks, making it difficult to attribute confusion solely to AFA's actions rather than the similarity of the marks themselves. Consequently, the first factor favors AFA significantly.
In assessing the similarity of the marks, courts evaluate the overall impression and context of the marks, considering various factors that may lead to consumer confusion. AFA's purchase of keywords related to the Association does not inherently cause confusion; rather, consumer confusion arises from the context of the ads displayed alongside the Association’s results. The comparison should focus on the ads presented to consumers rather than just the marks themselves.
When consumers search for "Alzheimer's Association," they may encounter AFA's ads, which might read "Alzheimer's Foundation" with no graphic elements, accompanied by a URL and a brief description. Different search results may show varying orders and texts for the ads, but the context remains consistent. The Association contends that AFA’s use of the two-word mark and keyword purchases create results that are notably similar, potentially misleading consumers.
AFA's website appears in organic search results as "Alzheimer's Foundation of America," while it uses a two-word name in its advertisements, which the Association argues is intentional to align with its own branding. AFA contends that any perceived similarity to the Association's name is lessened by the distinct content and URLs of its ads, emphasizing that it does not utilize any Association trademarks in its advertisements. However, the comparison should focus on the ads rather than their linked websites. The court finds that the ads are visually and contextually similar, which favors the Association.
The analysis also considers the competitive proximity of the two organizations. AFA asserts that it primarily provides care services, contrasting its mission with the Association's focus on research funding, and claims that competition is solely against the Alzheimer's disease itself. Nonetheless, the court concludes that both organizations operate similarly in the Alzheimer's charity space and compete for the same donor pool, indicating that this factor also supports the Association.
Regarding the "bridging the gap" factor, which typically assesses the potential for a plaintiff to enter a defendant's market, the court deems it irrelevant since both parties already compete in the same market. The factor concerning actual confusion is introduced but not elaborated upon in this excerpt.
The Second Circuit emphasizes the critical role of actual consumer confusion in assessing the likelihood of confusion in trademark cases, asserting that while no single factor is decisive, evidence of actual confusion is "particularly relevant." Actual confusion is recognized as strong evidence of a likelihood of confusion, and while difficult to prove, it is not a prerequisite for establishing likelihood of confusion under the Lanham Act. However, such evidence must be directly related to the alleged infringing actions to be relevant in the Polaroid analysis.
Judge Sweet, in a preliminary injunction ruling, noted that although some actual confusion was acknowledged, it was not significant enough to attribute to the AFA's online advertising practices. The court requires that evidence of actual confusion must demonstrate a causal link to commercial harm, such as diversion of sales or damage to goodwill. Instances of confusion must indicate a substantial impact on consumer decision-making rather than mere fleeting mix-ups. The Association has cited three primary types of evidence of actual confusion, including over 11,000 checks mistakenly made out to the wrong organization, with more checks directed to "Alzheimer's Foundation" than to "AFA" or "Alzheimer's Foundation of America."
Evidence indicating actual consumer confusion does not sufficiently link such confusion to the actions of the AFA. The Association presented a single instance of a 2014 donation check accompanied by AFA's donation form, but this isolated example fails to demonstrate that the majority of the 11,000 checks received were influenced by AFA's advertising. It suggests that confusion may arise from the synonymous nature of "association" and "foundation" rather than AFA's practices. The Court refrains from quantifying the mistakenly addressed checks due to insufficient evidence regarding their percentage in AFA's total receipts; thus, this evidence is deemed limited and unpersuasive.
Additionally, the Association cited minimal instances of confusion in media and anecdotal reports, including a court case involving a bequest misinterpreted due to the name similarity, and a media reference that misidentified the Association as raising funds for AFA. However, these instances lacked a credible connection to AFA's marketing tactics. The Association's claims are further undermined by the descriptive nature of both marks involved, reinforcing that confusion stems more from the weakness of the marks and consumer inattention rather than AFA's actions.
Finally, while the Association introduced survey evidence and expert testimony from Dr. Kent Van Liere to indicate the likelihood of confusion, it is emphasized that such surveys do not measure actual confusion but rather serve as circumstantial evidence. In cases where direct evidence of confusion is weak or absent, properly conducted surveys can help fill the evidentiary gap regarding consumer perceptions.
Consumer surveys must be well-prepared and focused on relevant issues to be considered probative of actual confusion, as established in case law. While survey evidence is not strictly evidence of actual confusion, the Court will assess such surveys under the Polaroid test factors. Dr. Van Liere conducted two studies, both subject to a Daubert motion by AFA to exclude his testimony, which the Court denied, opting instead to consider all record evidence. A survey is inadmissible only if its flaws negate all relevance; however, methodological criticisms affect the weight of the testimony.
Dr. Van Liere's first study, a "Squirt" style lineup test, aimed to evaluate confusion between the marks "Alzheimer's Association" and "Alzheimer's Foundation." He reported a 34% confusion rate, suggesting substantial consumer confusion. Despite criticisms, none were sufficient to render the study inadmissible, though collectively, the flaws indicated it should be given little weight. A significant issue was the choice of a weak control stimulus, "Alzheimer's Trust," which may have skewed confusion rates. Pre-tests indicated better control options, and the unique nature of the control word diminished its effectiveness.
The second study aimed to simulate consumer behavior when searching for "Alzheimer's Association" online, but its details are not provided in this excerpt. The findings of both studies contribute to the analysis of potential consumer confusion regarding the trademarks in question.
Dr. Van Liere concluded that AFA's keyword advertising campaign using Association Marks likely caused confusion at both the initial interest and landing pages. Although the Internet Search Survey's flaws did not render it inadmissible, substantial criticisms from Mr. Poret, who provided credible testimony, led the Court to question the reliability of the results. Study 2's design, where AFA's ad was presented first without rotating conditions, may have artificially inflated confusion rates. Additionally, using a control scenario without any sponsored ads likely depressed confusion, as the Association's website appeared as the first result. The lack of control for the presence of other sponsored ads further inflated reported confusion. Real-world search behaviors may also lead consumers to use terms generically, reducing the likelihood of confusion from AFA's ads.
The Court faces challenges in distinguishing between confusion arising from the charities' names in a general sense and confusion stemming from AFA’s alleged infringing actions. While there are some instances of confusion, such as mislabeled checks, the evidence does not substantiate a direct connection to AFA's conduct. The Association's request for the Court to infer a link between mislabeled checks and AFA's advertising practices is not well-supported by the record. Dr. Van Liere's surveys could have provided clarity, but significant control issues undermined their reliability, making it difficult for the Court to draw informed conclusions about actual confusion. Effective survey design is crucial for establishing causation, as controls must accurately reflect the confusion caused by the accused mark rather than other factors.
Dr. Van Liere's surveys contain significant flaws, leading to the conclusion that his opinions should hold minimal weight, although his report is not excluded entirely. The document emphasizes that vigorous cross-examination and the presentation of contrary evidence are appropriate methods to challenge admissible evidence. Regarding bad faith, it is defined as a defendant's intention to capitalize on a plaintiff’s reputation and create confusion with their mark. However, even if a defendant is aware of an earlier mark, they may still act in good faith if no additional evidence of intent to confuse or exploit goodwill exists. AFA's arguments suggest that a finding of bad faith precludes a finding of intentional deception; thus, the analysis is simplified in this case. The Association alleges that AFA has historically profited from confusion between their names, citing AFA's complaints since 2004 about name similarity, and accusing AFA of using Association Marks in metatags and keywords despite their complaints. The Association claims AFA's registration and advertising actions were intended to exploit the Association's goodwill, including submitting false specimens of use to the USPTO. Conversely, AFA claims it used the name "Alzheimer's Foundation" in internet advertising as early as 2004 and denies knowledge of the false specimens, arguing that mistakes made by associates cannot be attributed to them as bad faith.
The Court found Mr. Ingber, AFA's trademark counsel, to lack credibility regarding the false filings associated with AFA's trademark applications. However, the circumstantial evidence did not indicate that AFA intended to exploit the Association’s goodwill or create confusion. AFA pointed out that the Association had engaged in similar practices, including purchasing "Alzheimer's Foundation" as a keyword before 2010, and coexisted with AFA for six years prior to the lawsuit. After the Association raised concerns about AFA's use of "association" in its ads in 2014, AFA removed those ads while asserting it did not intend to deceive. AFA maintained a good faith belief that its actions were non-infringing, citing its long-term usage of the two-word mark, the lack of false advertising, and that both Google and Bing permitted its advertising practices. The Court agreed, stating that the Association's claims of AFA's intent were unsupported by evidence, and the absence of direct evidence of actual confusion weakened the Association's argument.
The Court compared the circumstantial evidence provided by the Association to established cases of bad faith, noting that the Association failed to prove the necessary "intentional deception" for claims of internet-related initial interest confusion. Additionally, there was no evidence suggesting that AFA's product was inferior to the Association's, and the Association's argument regarding brand harm did not significantly affect the likelihood of confusion analysis. The Court noted that if there were a significant quality disparity between the products, this would actually reduce the likelihood of confusion among consumers. Thus, the quality factor ultimately weighed in favor of AFA. Finally, the sophistication of the consumer—how attentively they evaluate products—was also considered relevant to the likelihood of confusion.
The sophistication of consumers plays a critical role in determining the likelihood of confusion regarding trademarks. The Association argues that a significant percentage of online donors are first-time contributors, suggesting that the average consumer is not particularly sophisticated. In contrast, AFA contends that internet users, who navigate online searches and donation processes, exhibit greater sophistication. AFA further notes that many donors are foundations, corporations, or repeat donors; however, the Association emphasizes that the relevant consumer population consists mainly of average online users rather than institutional donors.
In assessing confusion, the Court finds that initial interest confusion is likely among these less sophisticated consumers, especially as navigating to donation pages online does not inherently indicate sophistication. The evaluation of various factors shows that four favor AFA (strength of the mark, actual confusion, bad faith, and quality of product) while three favor the Association (similarity of marks, competitive proximity, and consumer sophistication), with one factor being neutral (bridging the gap).
Despite the numerical breakdown, the Court stresses the need to focus on the likelihood of confusion rather than simply tallying factors. In the specific context of consumers searching for the Association's mark and encountering AFA's advertisement, key factors such as mark strength, similarity, and actual confusion predominantly favor AFA. An additional consideration is the labeling of online ads, which helps consumers differentiate between sponsored content and organic search results, reducing the potential for confusion. The Court faces challenges in quantifying the number of consumers who might not be misled by AFA's advertising practices.
Consumers searching for "Alzheimer's Association" may not be confused about the organization they intend to find. They might use the term generically, or if seeking the Association specifically, they could recognize the distinction between the Association and the Alzheimer's Foundation of America (AFA) upon reviewing search results. Some consumers mistakenly click on AFA’s ad due to AFA purchasing keywords related to the Association, leading to "initial interest confusion." A segment of these consumers remains confused even after visiting AFA's website, contributing to "point-of-sale" confusion when they mistakenly believe they are donating to the Association. Additionally, a group of consumers is confused for reasons unrelated to AFA’s actions, stemming from the inherently descriptive nature of the names involved.
Despite the confusion, determining the proportion of consumers in each category is challenging due to flaws in the surveys presented at trial, which failed to adequately separate confusion stemming from the descriptive nature of the marks from that caused by AFA's actions. While it's possible that some consumers are misdirected by AFA's omission of "of America" in its advertising, the plaintiffs must demonstrate a "probability of confusion," not just a possibility, and the trial evidence does not support such a conclusion. The resemblance between "Alzheimer's Association" and "Alzheimer's Foundation" alone does not indicate that AFA's actions are likely to mislead a significant number of reasonable consumers. Comparisons to other cases, such as CJ Products and Edible Arrangements, highlight key differences that affirm the Court's assessment in this matter, emphasizing that the evidence does not substantiate a finding of likelihood for consumer confusion.
Defendants registered "Pillow Pets" and operated the website www.mypillowpets.co, purchasing keywords like "Pillow Pets" and "My Pillow Pets" through Google Adwords. They created sponsored posts that linked directly to their site and mimicked the plaintiffs' branding, including identical colors, formats, and the mark "Pillow Pets." Evidence indicated actual consumer confusion, demonstrated by complaints and a spike in traffic to the defendants' site concurrent with their use of the plaintiffs' mark. Additionally, defendants displayed bad faith by abandoning their original URL "plushez.com" and falsely advertising "As Seen on TV" on their website and product tags.
The comparison to CJ Products revealed that the defendants' conduct lacked the same severity, as the marks at issue were weaker, evidence of confusion was limited, and bad faith was only circumstantial. The court granted plaintiffs a preliminary injunction against the defendants for copyright infringement, false advertising, and false designation of origin, restricting their use of the plaintiffs' marks in Google Adwords. In contrast, the case of Edible Arrangements involved a competitor who used similar keywords and phrases, prompting the court to analyze the likelihood of confusion based on the strength of the plaintiff's mark and the defendant's bad faith. However, the current case's keyword and mark weakness, along with AFA's accurate descriptor "Alzheimer's Foundation," did not exhibit the same exploitation of the plaintiff's brand as seen in Edible Arrangements.
The critical issue in trademark infringement is whether consumers are likely to be misled about the source of the goods. In this case, the Court concludes that there is no likelihood of confusion among prudent consumers regarding the actions of the Counterclaim Defendant. Subsequently, the Association's remaining claims also fail.
First, regarding unfair competition under New York common law, the Association did not demonstrate the necessary elements or establish the defendant's bad faith, which is required alongside a Lanham Act claim.
Second, the claims under New York General Business Law § 349 also fail, as the standards are similar to those under the Lanham Act, but require proving a substantial injury to the public interest beyond ordinary trademark infringement.
Third, the Association sought the cancellation of AFA's '014 Mark due to alleged confusion with its own '223 Mark and on grounds of abandonment. The Court dismisses the confusion argument and notes that to prove abandonment, the Association must show both non-use of the mark and an intent not to resume use. AFA's filing of a Section 8 maintenance application in 2017 suggests it did not abandon the mark, although the Court finds no evidence of the '014 Mark's use in that filing.
AFA’s filing of the application for the '014 Mark indicates its intent to use the mark, which, coupled with the high burden on the Association to prove abandonment and the insufficient evidence presented, leads the Court to conclude that abandonment cannot be established. Regarding damages, the Court does not need to decide on the merits due to its findings on liability but notes the weak causal relationship between AFA’s actions and any consumer confusion. For a plaintiff to claim money damages, they must prove actual damages and a causal link to the defendant's actions, as outlined in relevant case law. The Association's damages expert, Marylee Robinson, assumed every instance of AFA using "Alzheimer's Foundation" was infringing; however, this assumption does not support the conclusion that all donations made after seeing the term were confusedly linked to that usage. Robinson's calculations are deemed over-inclusive, failing to account for various factors affecting donation decisions. The baseline theory proposed by Mr. Johns lacks credibility, as he did not personally perform the calculations and made assumptions linking all revenue increases to AFA's alleged infringement without establishing direct causation. Consequently, even if liability were proven, the Association would not be entitled to actual damages. The Lanham Act requires proof of actual consumer confusion for monetary relief in trademark infringement cases. Additionally, the Court may award attorney's fees in exceptional cases, particularly where claims are found to be without merit and made in bad faith, as per established precedents.
The Court determined that the Association did not act with an "improper purpose" in filing counterclaims and consequently did not award attorney's fees. It ruled in favor of Counterclaim Defendant Alzheimer's Foundation of America (AFA), dismissing all claims from Counterclaim Plaintiff. The Clerk of Court is instructed to enter judgment and close the case. Previously, Judge Sweet dismissed AFA's Fourth Amended Complaint due to AFA lacking standing and failure to demonstrate the Association's use of AFA trademarks in commerce. Although AFA sought reargument, the Court maintained its original ruling. Only trademark counterclaims remain, thus the parties are referred to as Counterclaim Plaintiff and Counterclaim Defendant going forward. Both parties presented post-trial proposed findings of fact, which could be opposed with record citations; unopposed findings supported by appropriate citations were deemed admitted by the Court. Any finding reflecting a legal conclusion is treated as a conclusion of law, and vice versa. Exhibits are categorized numerically for the Association and alphabetically for AFA. The Court found no likelihood of consumer confusion regarding AFA's use of "Alzheimer's Foundation," negating the need for separate analysis of the two-word name. The Court also noted flaws in the Association's damages calculations due to not accounting for repeat donors but ultimately found in favor of AFA, thus not addressing AFA's defenses of laches and unclean hands.
