A. What Constitutes Customer Confusion

The phrase "likelihood of confusion" is the key to most trademark conflicts. A "likelihood" means that confusion is probable—not necessarily that it has happened, or that it will happen, but that it is more likely than not that a reasonable customer would be confused by the simultaneous use of the two names.
Confusion in this context can mean two different things. Most commonly, it means that the goods or services a customer buys are different than what the customer intended to buy. For instance, suppose, on the recommendation of a friend, that you decide to purchase Lee's famous Flamebrain barbecue sauce, which is sold only on the Web. You intend to type "flamebrain.com" into your browser but accidentally enter "flamerbrain.com" instead. You get a website run by Henry, who has both copied Lee's idea to offer a barbecue sauce for sale on the Web and, with a very minor variation, the name of Lee's sauce. You order two bottles, completely unaware that you ordered the wrong product from the wrong website.
The other kind of customer confusion occurs when a misleading name causes customers to believe—wrongly—that a product or service is sponsored by, approved of or somehow connected with a business they already know about. In other words, customers are confused about the source of the product or service. This would be the case, for example, if you took your TV to a repair shop called IBM Electronics because you thought that IBM somehow sponsored the business.
The law imagines a "reasonable" customer who exercises ordinary care to distinguish among products and services. Courts recognize that a reasonable consumer will often make a snap judgment. For example, if, after only a hurried glance, you are confused between Heartbeat and Heartlite cooking oils, then the marks are too similar. That's reasonable. However, the law would surely not find it reasonable if you confused Heartbeat cooking oil with Esther's Cooking Oil because your Aunt Esther had recently died of a heart attack. Nor would you be reasonable in confusing Heartbeat with Esther's because of similar packaging, so long as the very different names were prominently displayed on the packaging.
Someone who alleges a trademark infringement must show (if the dispute goes to court) that a reasonable customer might be confused by the simultaneous use of the two marks. Typically, the challenger must somehow prove that a significant percentage of customers would likely be confused—anywhere between 5% and 50%, depending on the situation. The percentage varies from one court decision to the next. Proof typically comes in the form of statistically valid surveys and focus groups.
CautionWatch your metatags. Metatags are brief descriptions and key words that are pulled from a website's content and made part of the website's code. Users don't see this code, but it is visible to search engines. As a general rule, metatags should consist only of descriptive terms—ordinary terms that define your site's content—rather than distinctive terms that are in use by competing websites.
A court recently ruled that metatags that initially divert people away from a website containing a registered trademark may violate the trademark owner's rights. (Brookfield Communications, Inc. v. th West Coast Entertainment Corporation, 174 F.3d 1036 (9 Cir. 1999).) If your metatags have this effect, you could be forced to change them.
For example, suppose Josh launches a website for buying and selling Pokemon cards. Pokemon is a registered trademark of Nintendo of America, Inc., which operates pokemon.com. If Josh uses the word pokemon as a metatag, he might run afoul of Nintendo's trademark rights and end up at the wrong end of a court order forcing him to get rid of the metatags and perhaps pay money damages to Nintendo.