Reverse confusion occurs when the second user becomes better known than the first user. Typical consumer confusion occurs when the second user of a mark ‘cashes in’ on the goodwill generated by the first user of that same mark. In reverse confusion, the first user looses the opportunity to control its own reputation and goodwill. Consumers even disrespect the first user assuming the second user is the original. The first user is virtually always the prevailing party in any trademark litigation.
Reverse confusion occurs when a junior user engages in extensive promotion of goods under a mark that the market is swamped, resulting in a likelihood that consumers will mistakenly believe the senior user’s goods are associated with the junior user. Mostly, reverse confusion occurs when a more powerful company uses the mark of a smaller, less powerful senior user.
The doctrine of reverse confusion is intended to enable small, senior users to protect their trademark rights against junior users whose marks have gained commercial strength through extensive marketing. Since a senior user only learns of the junior use of the mark through the junior user's advertising campaign, the application of the doctrine will result in the loss to the junior user of substantial sums already invested in the marketing and promotion of goods under the mark. It can also result in loss of profits in the form of damages. Therefore, reverse confusion can be a powerful weapon in the arsenal of lesser known companies in terms of protecting their trademark rights and as leverage against larger users.