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Article Excerpt
Anheuser Busch, the brewers of Budweiser, sued a Czech brewer alleging that its beer brand, Budejovicky Budvar, created confusion in the marketplace and breached New Zealand consumer protection legislation that prohibits misleading and deceptive conduct. The case brought against Budejovicky Budvar included a survey of beer consumers and this was central to the action. This paper explores the robustness of the survey by evaluating its methodology in terms of the four errors that affect survey research: coverage error, measurement error, sampling error and non-response error. In each area, the survey adduced contained serious flaws that undermined its validity. Ironically, these flaws were largely avoidable. An alternative survey design that draws on past cases and empirical generalisations in question wording is proposed. While untested in court, this design takes greater cognisance of issues regarding forensic research that have been raised internationally. More attention to these issues should reduce the vul nerability of surveys to criticism and help ensure that the relevant public's voice is better represented in actions that allege consumer confusion.
Introduction
As markets become increasingly competitive, manufacturers' sensitivity to their rivals' behaviour has also heightened, particularly if competitors' actions seem likely to generate confusion among consumers. Established manufacturers often request that competitors desist from marketing a brand if this features names, logos or visual devices that appear similar to those sported by an existing, or senior, brand. These requests are based on the view that trademarks, described by Peterson et al. (1999) as the legal equivalent of brands, confer benefits on their owners.
However, although the value of trademarks is now assessed typically from a business perspective, they were initially considered important because they assisted consumers. As Jacoby and Morrin (1998) noted: 'Trademarks...enable consumers to identify and distinguish among goods and services sold in the marketplace and, by implication, their quality' (p. 97). Trademarks thus protected consumers by enabling them to recognise products that had performed well, and which they may wish to purchase again, together with those they had found less satisfactory, and which they might wish to avoid in future. However, businesses also clearly benefit from consumer recognition of trademarks, as, Cohen (1991) argued: 'A successful trademark can help a company build a strong brand franchise that can be licensed, sold, or used in brand extensions' (p. 46). Thus the legal protection afforded by trademarks expanded to encompass the goodwill that, over time, has been paired with some brands (Loken et al. 1986; Cohen 1991; Simonson 1994).
Where trademarks are used in an unauthorised manner (i.e. are misused), or a manner that could confuse consumers, the owners of the trademark can suffer damage in at least three ways. First, consumers may purchase the brand featuring the junior mark believing that they are in fact purchasing the senior mark. Second, they may recognise differences in the two marks so that these are not confused, but they may believe that the marks are sufficiently similar to have come from the same manufacturer. Finally, if consumers are dissatisfied with the junior mark and believe it either to be the senior mark or manufactured by the senior mark, they may attribute negative characteristics to the senior mark and may even stop purchasing it (Simonson 1994; Jacoby & Morrin 1998; Kearney & Mitchell 2001).
Where companies believe consumers have confused their mark with a junior mark or that they are likely to do so, they require their rival to desist from using the junior mark. If ignored, these requests may result in litigation, where a Court is asked to rule on whether the allegedly confusing conduct is likely to mislead or deceive consumers. Companies involved in such litigation frequently commission surveys to ascertain whether the brands are confused and, if so, what proportion of consumers confuse them. However, although surveys are now widely accepted as evidence, they sometimes have little probative value because of flaws in their design or implementation.
In countries such as the UK and the USA, where surveys have been adduced for some time, and where the Federal Trade Commission (FTC) has commissioned its own surveys to assist the determination of a case, a body of case law has developed. The criticisms levelled at expert evidence based on surveys and the extent to which the Courts accepted these have helped guide the design of future surveys (although, as Preston (1992) noted, researchers and lawyers could take more cognisance of past decisions). However, in countries such as New Zealand and Australia, where survey evidence has gained acceptance only comparatively recently, fewer principles exist. Perhaps because of the lack of well-publicised criteria, research companies have often failed to appreciate that research conducted for litigation purposes must meet higher standards than more routine market surveys (Crespi 1987; Morgan 1990; Maronick 1991).
In New Zealand, this lack of experience in conducting surveys for presentation in Court, together with a failure to draw on relevant international information and a reluctance by litigants to fund high-quality work, has resulted in surveys that provide little guidance and that have carried little weight. This situation is disappointing, since it reflects a rather haphazard approach to survey design and a failure to draw on and use the well-documented generalisations that exist in the question wording and questionnaire design literature (see also Kearney & Mitchell 2001). This paper begins by outlining the role played by survey evidence internationally, before examining a case recently heard in New Zealand (that has also been heard in several other countries), and analysing the consumer survey evidence adduced in the case. Finally, we suggest how flaws that fatally undermined the survey evidence could have been avoided and outline an alternative methodology that might have met with fewer criticisms.
Use of survey evidence
Surveys were initially used as a means of identifying individuals who could be asked subsequently to appear as witnesses in court. However, this approach has obvious limitations since for every witness willing to support the plaintiff's case there is likely to be another who will testify in support of the respondent. The net effect of this approach is thus an intellectual counterpoint where neither side succeeds in establishing its case. More fundamentally, the representativeness of the witnesses prepared to provide evidence is questionable; thus, even if one side does produce more credible witnesses, judges may not be willing to generalise their views to a wider population.
In response to these problems, researchers began to use survey evidence to obtain the views of a representative group of relevant consumers. Although early survey evidence was initially .dismissed as hearsay because respondents were not typically available for cross-examination, surveys are now widely accepted in many jurisdictions, including the UK and other EU countries, the USA, Australia and New Zealand. The purpose of surveys adduced more recently has thus been to identify the proportion of a population affected by confusion,...
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