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Chapter 6, Chapter 6, Part 1Part 1
Lesson: Behavioral/Social Knowledge Can Aid in the
Resolution of Factual Disputes
This is the 3rd reason why behavioral/social factual knowledge is used in legal decision-making
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We use symbols all the We use symbols all the time in Society…time in Society…
•Symbols help us communicate information.
•Symbols are also important for businesses.
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Trademark Trademark InfringementInfringement
• Trademark: A word, phrase, logo or other symbol used by a company to distinguish its products from those of other companies
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–Case: Volkswagen and Audi v. Uptown Motors
–Court: U. S. District Court for the Southern District of New York
Example: Trademark Infringement
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The Factual Dispute In This Case
•VOLKSWAGEN®, VW®, and Audi® are registered trademark in the United States
•Uptown Motors used the logos in its ads without VW’s permission
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VW’s Claim
• VW claims that Uptown’s actions infringed its trademark rights
• VW argues that the consumers are confused by Uptown’s use of the VW trademark
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Uptown’s Claim
• Uptown argues the opposite of VW
These opposing beliefs constituteThese opposing beliefs constitute a FACTUAL DISPUTEa FACTUAL DISPUTE
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Importance of Resolving the Factual Dispute
• If VW proves that consumers are likely to be confused by Uptown’s business practice then VW wins its case and is entitled to:
Stop Uptown’s
use of VW’s logo
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Importance of Resolving the Factual Dispute
• But if VW proves that consumers were actually confused by Uptown’s business practice then VW wins its case and is entitled to:
Stop Uptown’s use of VW’s logo
Uptown’s profits VW’s financial damages
Cost’s of litigation Up to 3x the amount of actual damages
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Proving VW’s Claim • To prevail, VW had to show that:
– an appreciable number
– of ordinarily prudent purchasers
– are likely to be misled or confused •and/or were actually misled or confused
– as to the source of the services provided by Uptown (i.e., was Uptown an authorized VW service center)
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Proving Likelihood of Confusion
1. Strength of VW's trademark:
Years of Advertising
Billions of Sales
Fanciful = Distinctive and Strong
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Proving Likelihood of Confusion
2. Degree of Similarity Between VW's and Uptown's marks
Uptown used VW’s mark
3. Proximity of the Products or Services
Both Uptown and VW services and repairs automobiles
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Proving Likelihood of Confusion
4. Consumer Sophistication
Sophisticated = Unlikely to be confused
Unsophisticated = Easily confused
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Proving Likelihood of Confusion
5. Quality of Services
VW: high quality of service work
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Proving Likelihood of Confusion
vs. Uptown , which: Did not know its employees’ background
or prior training
Had no formal training program
Did not give VW any control over the quality of the work done at Uptown
Could not guarantee the quality of its work in the future
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Proving Likelihood of Confusion 6. ‘Good Faith’ in using VW's trademark
VW’s logo = trademark
VW vigorously enforced its trademark rights
Uptown was not authorized to use VW’s logo (mark)
Uptown received 4 letters from VW demanding that it cease and desist from using the VW logo
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Proving Likelihood of & Actual Confusion
7. Evidence of likelihood of confusion can come from a social science survey
8. Courts accept such surveys to prove actual confusion
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Social scientists can help resolve factual disputes
They are experts at:
Designing, Conducting, Analyzing, and Interpreting
the results of research (e.g., surveys)
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• Asked the same question of 2 groups
– Treatment Group:
– Control Group:
VOLKSWAGEN
VOLKSWAGEN
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• Study 1: “Look at this advertisement and tell
me if the repair shop is an authorized VW service center.”
–Might the question asked in the survey lead to biased responding?
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• Study 1 was conducted using people who were getting services at 3 NYC VW dealers
–Might the type of respondents surveyed
affect the results?
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• Study 2:
“Is the dealer authorized or independent, in your judgment?”
To answer these questions, a follow-up survey was conducted using undergraduates at the social scientist’s university in Canada
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Study I: • Treatment Group:
45% believed the ad to be from an authorized service center
• Control Group: 28% believed the ad to be from an authorized service center
• Difference Between Groups (i.e., the Logo Effect): 17%
Study II• Treatment Group:
21% believed the ad to be from an authorized service center
• Control Group: 5% believed the ad to be from an authorized service center
• Difference Between Groups (i.e., the Logo Effect): 16%
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The logo effect was almost identical in the two studies
–Type of surveyand type of respondent
did not compromise the validity of study 1
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Did VW Prove its Claim ?
• Using the results of the surveys, VW was able to show that:
– an appreciable number
– of ordinarily prudent purchasers
– are were actually misled or confused
as to the source of the services provided by Uptown
16.5%
Based onSurvey Sample
Believed Uptown to be an Authorized VW service center
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Court’s Conclusion
There was significant actual confusion
VW Wins!