Case(s): Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 561 F.2d 1365 (10th Cir. 1977).
Big O Tire Dealers, Inc. was a franchisor of retail tire stores that sold and installed tires under the name “Big O Tires,” while Goodyear Tire & Rubber Cowas a well-known manufacturer and seller of tires. In the fall of 1973, Big O decided to identify two of its lines of private brand tires as “Big O Big Foot 60” and “Big O Big Foot 70.” These names were placed on the sidewall of the respective tires in raised white letters. Thereafter, Goodyear Tires adopted the mark “BIG FOOT” for use on its tires. After learning of Big O’s trademark rights, Goodyear representatives met with Big O representatives, and Big O rejected Goodyear’s offer of money in exchange for permission to use the Big Foot mark. Goodyear continued its use of the mark and by August 31, 1975, had spent nearly ten million dollars on its “massive, saturation campaign.”
Big O sued for false designation of origin under section 43(a) of the Lanham Act, trademark infringement under Colorado common law, and “trademark disparagement.” At issue was whether Big O had an actionable trademark infringement claim when “Big O does not claim nor was any evidence presented showing Goodyear intended to trade on the goodwill of Big O or to palm off Goodyear products as being those of Big O. “
The jury found for Goodyear on the Lanham Act claim but for Big O on the other claims, awarding compensatory damages of $2.8 million and punitive or exemplary damages of $16.8 million. The district court went on to award an injunction against any use of the contested mark by Goodyear.
Tenth Circuit Appeal & Reverse Confusion
The Tenth Circuit found in favor of Big O, affirming the district court judgment as to all but the size of the damages award. In the decision that gave rise the concept of reverse confusion, the Tenth Circuit held that reverse confusion was an actionable claim under the trademark laws of Colorado. The court reasoned that Colorado’s “‘policy of protecting trade names and preventing public confusion’ as well as having ‘the tendency (of widening) the scope of that protection”‘ called for protection against reverse confusion. Also persuasive was evidence of actual confusion presented by witnesses showing they thought that Goodyear was the source of Big O’s tires after seeing the Goodyear commercials. Therefore, for the first time, a circuit court recognized and enforced the doctrine of reverse confusion in trademarks.