How Interpace v. Lapp Built

When two companies used the Lapp name on non-competing electrical goods, the Third Circuit produced the ten-factor framework courts still use to gauge trademark confusion.

Trademark law gets hardest when two companies sell different things under the same name. That was the puzzle in Interpace Corp. v. Lapp, Inc., 721 F.2d 460 (3d Cir. 1983), where the plaintiff’s Lapp Division sold ceramic electrical insulators under the “Lapp” mark and the defendant, Lapp, Inc., sold electrical wire and cable under the very same word. The goods did not compete head to head, and the district court believed precedent forced it to dismiss. The Third Circuit reversed and, in doing so, distilled a ten-factor test for likelihood of confusion that has governed the circuit ever since. Practitioners simply call them the Lapp factors.

At a glance

Case: Interpace Corp. v. Lapp, Inc., 721 F.2d 460 (3d Cir. 1983), No. 83-5036.
Court: U.S. Court of Appeals for the Third Circuit; panel of Circuit Judges Gibbons and Hunter and District Judge Mansmann (by designation).
Posture: Appeal from a bench-trial judgment dismissing the trademark-infringement complaint.
Holding: Likelihood of confusion can exist between non-competing goods; the court announced a ten-factor framework and reversed, remanding for entry of judgment for the mark owner and a proper remedy.
Significance: Created the canonical Third Circuit likelihood-of-confusion test and clarified its application where the parties’ goods do not directly compete.

Same name, different wares

Interpace’s Lapp Division had long used “Lapp” on ceramic insulators; the defendant used “Lapp” on wire and cable. Both were electrical products sold to overlapping industrial buyers, but neither sold what the other did. After a bench trial, the district court made findings that largely favored the plaintiff yet felt compelled, by its reading of Scott Paper Co. v. Scott’s Liquid Gold, Inc., to conclude that likelihood of confusion alone could not support relief between non-competing goods, and it dismissed. The Third Circuit disagreed. The relevant question, it held, is not whether the parties compete but whether consumers are likely to be confused about source, sponsorship, or affiliation — a question that demands looking past the marks to the nature of the products and the context in which they are sold.

Building the ten-factor test

To structure that inquiry the court set out ten factors: (1) the degree of similarity between the owner’s mark and the alleged infringing mark; (2) the strength of the owner’s mark; (3) the price of the goods and other indicia of buyer care and attention; (4) the length of time the defendant used the mark without evidence of actual confusion; (5) the defendant’s intent in adopting the mark; (6) evidence of actual confusion; (7) whether the goods, though non-competing, are marketed through the same channels and advertised through the same media; (8) the extent to which the parties’ sales targets overlap; (9) the relationship of the goods in consumers’ minds because of similarity of function; and (10) other facts suggesting the public might expect the prior owner to enter the defendant’s market. The court was emphatic that the list is not a mechanical scorecard: no single factor controls, the factors carry different weight depending on the goods, and a finding of confusion does not require prevailing on a majority of them.

Why the marks “stand out” and the expansion factor

Applying the framework, the court found the marks “for all practical purposes identical.” Even when the defendant marketed its products as “Lapp Cable,” the surname “Lapp” still “stands out” as the source signal. The strength of the plaintiff’s established mark, the overlap of industrial buyers and trade channels, and the close functional relationship between insulators and wire all pointed toward confusion. The tenth factor — the likelihood that the owner would expand into the defendant’s field — proved pivotal in this non-competing-goods setting. Where it appears probable that the senior user will move into the junior user’s market, the risk that consumers will assume a common source grows, and that prospect weighed heavily toward relief. The court reversed and remanded for entry of judgment for the mark owner and the fashioning of an appropriate remedy.

Open questions

How much weight does expansion deserve? Lapp made market-expansion central to non-competing-goods cases but left its weight relative to actual confusion to later panels.
When are trade channels “the same”? The court treated overlapping industrial buyers as significant, yet the line between shared and merely adjacent channels remains fact-bound.
Does the test differ for competing goods? Lapp arose with non-competing goods; subsequent decisions had to sort which factors recede when the parties compete directly.

Implications

Plead and prove the factors that fit. Because no factor is dispositive, focus evidence on the ones that matter for your goods — often similarity, strength, and the relationship of the products.
Watch the expansion factor. A senior user’s plausible plans to enter the junior user’s market can carry a non-competing-goods case.
Channels and buyers matter. Overlapping trade channels and shared customer targets bridge the gap between goods that are not direct substitutes.
Surname marks still signal source. Adding a descriptive term like “Cable” does not cure confusion when the distinctive surname dominates the impression.
Non-competition is not a defense. Defendants cannot rely on selling a different product; confusion as to source or affiliation suffices.

Frequently asked questions

What are the Lapp factors? They are the Third Circuit’s ten-factor test for likelihood of confusion: similarity of the marks; strength of the owner’s mark; the care and attention of buyers; how long the defendant used the mark without actual confusion; the defendant’s intent; evidence of actual confusion; whether the goods share trade channels and media; overlap in sales targets; the relationship of the goods in consumers’ minds; and whether the public would expect the owner to enter the defendant’s market.

Why did Interpace v. Lapp matter for non-competing goods? The district court thought it was bound to dismiss because the parties did not compete directly. The Third Circuit reversed, holding that likelihood of confusion can exist between non-competing goods and that the same multi-factor analysis applies, with extra weight on the relationship of the goods and the likelihood of market expansion.

Are all ten Lapp factors required to find confusion? No. The factors are a non-exhaustive checklist, not a scorecard. No single factor is dispositive, different factors carry different weight depending on the goods, and a court need not find a majority of them satisfied to find a likelihood of confusion.