The Materiality of Sponsorship Confusion

Abstract

The question of whether and when confusion over product sponsorship should be actionable is one of the most vexing in trademark law. Mark owners often claim that the use of their marks in movies and on merchandise will mislead consumers to believe that their companies have approved these other products, and that these uses therefore must be controlled. But overzealous enforcement of sponsorship rights can chill valuable speech and unnecessarily prevent competition in merchandising domains. In an effort to rein in overreach by trademark owners, several prominent scholars have proposed adding a materiality requirement to the sponsorship confusion analysis. They want to require mark owners to show not only that consumers assume a particular product is sponsored by the mark owner, but also that this assumption materially affects consumer behavior. The data gathered and presented here show that requiring materiality would alter the treatment of several classes of products, but would not have nearly as broad an effect as many would have expected: sponsorship confusion is material to about half of consumers. The implications of these findings for other proposed limiting doctrines are discussed.