Imagine standing in an isle of cereals and you want to find THE cereal that has been advertised to you as exceptionally yummy and at the same time, exceptionally healthy—and all that for a great price!

What will influence your decision regarding what cereal box you’ll eventually place into your cart, and how could companies lure you into grabbing a product you didn’t want to buy? One solution to avoid confusion is the use of so-called trademarks.

“A trademark […] is a recognizable sign, design, or expression which identifies products or services of a particular source from those of others.” You surely know many of these; a few examples are given below:

Trademarks are ubiquitous—so much that they have even found their way into our common language. For instance, when you cut your finger while making dinner, you’d ask your spouse to bring you a “band aid” rather than an “adhesive bandage”. Or when you need to fetch data from one of the experimental computers, you’d use a “memory stick” instead of a “flash memory storage device”. Yes, “memory stick” is a trademark! You can find a list of such trademark examples that have been incorporated into our daily language here.

A paper by Michael Humphreys and colleagues recently published in Psychonomic Bulletin & Review aimed to test certain common assumptions in trademark law. The intent of trademark law is to protect brands—whose identity is a valuable asset to its owners—and reduce consumer confusion—because when you want to buy a Gucci handbag, you presumably want just that and not a cheap imitation. In times of fake news all over the place, you’d at least want to get the real thing, not South Butt, for example!

So when are trademarks impinged? How similar does my apple icon have to be to the Apple icon before I violate the law? Courts have been deciding on the impact of brand similarity without much empirical guidance: in particular, there has been no prior work that examined the effect of a specific context on judged or perceived similarity between trademarks (or their imitations).

Essentially, Humphreys and colleagues wanted to know whether a moderate increase in the similarity of a target item to a trademark that is tested in a familiar context can significantly increase the probability of a false alarm.

Brands were studied with brand claims, and names from the same product category were tested with old claims or new claims. Likewise, names from a different product category were tested with old claims or new claims.

If this sounds a bit complex, here is a detailed explanation of their design:

The authors had participants study brand names (B) in the presence of a context consisting of a brand claim (A), e.g.: Energise with every mouthful of […].

Participants were then tested on five different types of pairs:

1)    The target pairs were studied brand names tested with the study claim paired with that brand at study (AB), like: “Energise with every mouthful of Lavazza!”

2)    The distractor pairs consisted of non-studied claims with a non-studied brand that was dissimilar to any studied brand (YX): “Spread on smooth with Nutella!”

3)    a studied brand claim with an unstudied brand that was dissimilar to any studied brand (AX): “Energise with every mouthful of Red Bull!”

4)    an unstudied brand claim paired with a brand that was similar to a studied brand (YB’): “Spread on smooth with Vittoria!”, and

5)    a studied brand claim with an unstudied brand that was similar to the brand that had been studied with that claim (AB’): “Energise with every mouthful of Vittoria!”

You can find a full list of examples in the paper’s Appendix.

Now the question was, how studied and unstudied brand names and brand claims would interact, and whether similarity between these would matter. Evidence for a multiplicative relationship would be given if the oldness of the brand claim on its own (AX pairing) and the use of a similar name on its own (YB’ pairing) failed to increase the false alarm rate, while the combination of the two would significantly increase the false alarm rate (AB’ pairing. And this is exactly what Humphreys and colleagues found when they made the following interesting observation: There was almost no evidence that a similar brand name on its own (“Spread on smooth with Vittoria”), or a familiar context on its own (“Energise with every mouthful of Red Bull”), produced an increase in false alarms. However, the similar brand name in conjunction with the familiar context substantially increased the false alarm rate. Thus, presenting “Vittoria” together with the energizing brand claim, i.e.  “Energise with every mouthful of Vittoria!” was all it took.

These results go in line with the prediction from so-called Global Matching Models, that shared context can multiplicatively combine with information about the relationship between a target and probe and lead to an increase false alarm rate when a new recognition probe is even only modestly similar to the studied target. In other words, if a brand from the same product category as the to-be-purchased brand occurs in the same context (here a brand claim), one is more like to be falsely purchasing the wrong item. Most importantly, shared context can cause mistakes even where brand similarity is low.

While the conclusions that can be drawn from this study are limited to the study’s specific design, and while a replication with different types of band presentations and shopping contexts is called for, the results nonetheless have implications for both trademark law and the way evidence is presented in trademark disputes.

Trademark examiners, for instance, have to decide whether a proposed trademark is likely to cause confusion with an existing trademark. From a legal perspective, evidence for a multiplier effect arising from a common context might be able to change how trademark examiners and courts assess the risk of confusion. Right now, it is commonly assumed that consumers can ignore generic content (like common packaging colors, or common descriptive words like “crunchy” for cereals) and focus on distinctive aspects of branding (like invented brand names) when identifying products they are looking for.

If experimental evidence — as provided by Humphreys and colleagues — shows that some of these assumptions are incorrect, this might have potential implications for trademark law around the world.

Coming back to that healthy yummy cereal you’re looking for: There seem to be many ways that you can be tricked into buying things you do now want to buy, creating a common context being one of them. You might be better off to just make that granola yourself, give it a fancy name and always enjoy it in your own familiar kitchen context.

Article focused on in this post:

Humphreys, M. S., McFarlane, K. A., Burt, J. S., Kelly, S. J., Weatherall, K. G., & Burrell, R. G. (in press). Recognition in context: Implications for trade mark law. Psychonomic Bulletin & Review. DOI 10.3758/s13423-017-1235-6