EU legislation appears to create 3 bases for liability: (1) Identity of sign & goods = presumption of existence of confusion. (2) The marks are different in one dimension or another, but there’s still a likelihood of confusion, which concept has received expansive definition in the ECJ. (3) Extended protection, which was optional but was adopted by all member states, for cases in which the marks are similar but the goods/services aren’t.
You could conceive of this as a core of protection (presumption) with a penumbra (likelihood) and then a second penumbra. The second penumbra would involve nonconfusion, but still implicate the harms which confusion can bring, justifying a remedy. There are generally two types of harm: the defendant can attract business by using the mark (how does this harm the plaintiff if the plaintiff is a noncompetitor?), and the defendant can generate aversion to the mark by mishandling the product/service. These things can happen without confusion.
That penumbral theory turned out to be too simple – the ECJ deleted the word “not” from the provision for extended protection covering situations where the goods/services are “not similar.” Now any mark with a qualifying reputation is entitled to the remedy of extended protection no matter what the accused goods/services are. If you have a reputation, you win if you have confusion and you win if you don’t have confusion.
People persistently allege confusion and fall back on extended protection, but this is gradually changing to a default to an extended protection claim. Significant is the low level of reputation required – it doesn’t require the mark to be “well-known” under the Paris Convention. You just need enough reputation to have a customer base/secondary meaning. It becomes circular: if you have enough of a reputation to be injured by the defendant, you have a claim. It’s a self-fulfilling prophecy.
Next question: how close is too close? It’s conventional to say that identity/virtual identity is the strongest claim, and differences between the marks make the claim harder. But there can be a lot of differences and still a successful claim: the D’Nickers sign was unregistrable because of the Nike swoosh, even though there was not enough similarity to give rise to a likelihood of confusion. 
(Comment: to an American, this sounds crazy -- we think of dilution as requiring more similarity than confusion, precisely because the right is broader.) Hobbs suggested that a lower standard of similarity in extended protection cases is the inexorable requirement of the absence of a confusion requirement. Unless the superior courts put a brake on this, extended protection will continue to proceed in this fashion.
Extended protection is very useful. It gets rid of overtechnical assessments of similarity for infringement purposes. Now, you don’t have to get so worked up about comparing the marks and just find general similarity. If someone sells Genuine Fake Rolex watches, there’s no coherent claim of confusion, and it’s a relief not to have to try to prove confusion.
Next battleground: Whether Moseley will spill over to the EU. Dilution liability is ultimately incapable of proof. A court opposed to liability can always raise difficulties of proof. The crucial word from the case law, infuriatingly vague, is “link” – is there a “link” between the two marks? With translation issues, perhaps the right thing to do is speak of a “connection” in the mind of the consumer. The Adidas court picked up on both of these, speaking of situations in which similarities lead the public to “make[] a connection between the sign and the mark, that is to say, establishes a link between them.” Nobody knows what that means, but it is circular: courts treat the link as existing if consumers’ mindset changes in a way that produces the consequences we don’t like (free riding or damage to reputation). (My comment: Of course free riding or damage to reputation are generally not proved with evidence but presumed, so the idea that there is something real underneath is kind of delusional.)
The assessment is essentially psychological – what impact will the sign have on peoples’ minds? When we find confusion, we’re again making a psychological assessment. The problem: we know too much. By the time we ask the question, we know there’s a question, but other people may not, and we somehow have to try to put ourselves in a position of ignorance, which is difficult. Courts simply don’t like the concept of a psychological assessment, and that’s why they recoil from extended protection. Calling for straight-up unfair competition analysis is a response, but it wouldn’t solve this ultimate problem: what is going on in a particular case?
Mechanisms of proof: He described a German colleague’s belief that dilution was essentially a matter of law. One uses the hypothetical “average consumer” for the purposes of testing whether a defendant has gone too far. He doesn’t like this imaginary “average consumer.” We’re looking for people whose real-world thoughts we can take into account. This will come to a head in the EU, because English courts are analyzing the matter differently from German and others.
Surveys: We must learn to live with and love them. But they substitute the causation of the questionnaire for the causation of the defendant’s use in the marketplace. There is no survey that can’t be destroyed by analysis. There’s another reason surveys fail: Judicial self-preservation. The judge wants to be the one to rule on liability, not have the survey do so for him/her. Thus, the judge will always do an independent analysis and find “support” for it in the survey.
Experts: Practical experience on brand extension work is key. Anyone who works on brand extension can tell you that it can be done right or wrong – if done right, the defendant will steal value; if done wrong, the defendant will harm the plaintiff’s reputation.
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