A&H Sportswear Inc v. Victorias Secret Filed December 1, 2000
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 99-1734 and 99-1735
A&H SPORTSWEAR, INC;
MAINSTREAM SWIMSUITS, INC., Appellants
v.
VICTORIA'S SECRET STORES, INC.;
VICTORIA'S SECRET CATALOGUE, INC.
On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. Civ. No. 94-cv-07408)
District Judge: Honorable Franklin S. Van Antwerpen
Argued: April 26, 2000
Before: BECKER, Chief Judge, BARR Y and
BRIGHT,* Circuit Judges.
(Filed: December 1, 2000)
ARTHUR H. SEIDEL, ESQUIRE
(ARGUED)
STEPHEN J. MEYERS, ESQUIRE
MICHAEL F. SNYDER, ESQUIRE
Seidel, Gonda, Lavorgna & Monaco
1800 Two Penn Center Plaza
Philadelphia, PA 19102
_________________________________________________________________
* Honorable Myron H. Bright, United States Circuit Judge for the Eighth
Circuit, sitting by designation.
NORMAN SEIDEL, ESQUIRE
Laub, Seidel, Cohen & Hof
Eastern Dollar Savings & Trust
Co. Bldg.
8 Centre Square
Easton, PA 18042
Counsel for Appellants
FRANK J. COLUCCI, ESQUIRE
(ARGUED)
RICHARD P. JACOBSON, ESQUIRE
Colucci & Umans
101 East 52nd Street
Manhattan Tower
New York, NY 10022
H. ROBERT FIEBACH, ESQUIRE
Cozen & O'Connor
The Atrium
1900 Market Street
Philadelphia, PA 19103
Counsel for Appellees
OPINION OF THE COURT
I. Facts 8
II. Procedural History 9
III. The Direct Confusion Claim 11
A. The Lapp Test and the Distric t Court's Opinion 12
B. The Test for Directly Competing Goods 14
C. The District Court's Methodology 20
IV. Review of the District Court's Analysis 22
A. Similarity of the Marks 22
1. Sight, Sound, Meaning
23
2. The Housemarks and the Disclaimer 26
3. The PTO's Rejection of Victoria' s Secret's
Application 28
4. Summary 31
2
B. Strength of the Marks 31
1. Distinctiveness or Conceptual Str ength 32
2. Commercial Strength of the Ma rk 36
3. Summary 36
C. Product Similarity 37
D. Marketing and Advertising Channels 37
E. Sophistication of Consumers 38
F. The Intent of the Defendant 39
G. Actual Confusion 40
H. Combining the Factors 42
V. The Reverse Confusion Claim 42
A. Introduction 42
B. The Test for Reverse Confusion 44
1. The Factors that are the Same 45
2. Similarity of the Marks 46
3. Strength of the Marks 47
a. Commercial Strength 47
b. Distinctiveness or Conceptual Str ength 49
4. The Intent of the Defendant 50
5. Factors Relating to Actual Confusion 52
6. Other Relevant Facts 53
7. Summary of the Test for Reverse C onfusion 54
C. The District Court's Opinion 55
D. Guidance for Remand 57
1. Introduction 57
2. Similarity of the Marks 58
3. Strength of the Marks 59
4. Intent 59
E. Summary 60
VI. Conclusion 61
BECKER, Chief Judge.
The critical question in this trademark infringement case,
before us for the second time, is whether a typical
consumer is likely to confuse MIRACLESUIT swimwear with
THE MIRACLE BRA swimwear.1 The former is a product of
Plaintiff A&H Sportswear Company ("A&H"), which
manufactures ten percent of all swimsuits made in the
_________________________________________________________________
1. We will refer to the marks in lower case throughout the remainder of
the opinion.
3
United States. The latter is a product of Defendant
Victoria's Secret, the lingerie leviathan that recently entered
the swimwear market. A&H filed suit in the District Court
for the Eastern District of Pennsylvania claiming that The
Miracle Bra swimwear mark violates the Lanham Act
because it is confusingly similar to the Miraclesuit
swimwear mark, which A&H registered first. A&H contends
that: (1) consumers are likely to wrongly associate The
Miracle Bra with A&H (the direct confusion claim2); or, in
the alternative, (2) consumers are likely to think that
Miraclesuit is a product of Victoria's Secret (the reverse
confusion claim).
During an extensive bench trial, A&H argued that
Victoria's Secret should be enjoined fr om using The Miracle
Bra mark for swimwear. Finding a "possibility of confusion,"
the District Court granted relief to A&H. Following an
appeal to this Court that clarified that likelihood of
confusion (instead of possibility of confusion) was the
correct standard, the District Court concluded that A&H
had failed to show by a preponderance of the evidence that
Victoria's Secret's The Miracle Bra swimwear mark created
a likelihood of either direct or reverse confusion with the
Miraclesuit product.
In Interpace Corp. v. Lapp, Inc., 721 F .2d 460, 463 (3d
Cir. 1983), this Court established a ten-factor test (the
"Lapp" test) to determine the likelihood of confusion for
direct confusion claims between goods that do not directly
compete in the same market, but we have never decided
what factors should be considered in the case of directly
competing goods. The District Court therefor e fashioned its
own multi-factored test that approximates, but does not
completely match, the Lapp test. In employing its test, the
District Court acknowledged that the most important factor
was the similarity of the marks, and determined that their
overall commercial impressions wer e not similar.
_________________________________________________________________
2. Although we described this phenomenon as "forward confusion" in
Fisons Horticulture, Inc. v. Vigoro Industries, Inc., 30 F.3d 466, 479 (3d
Cir. 1994), we think that the term"direct confusion" is more sonorous
and accurate. Products are not "forwar dly confused" but "directly
confused."
4
The District Court placed particular emphasis on the fact
that the The Miracle Bra mark typically appears alongside
Victoria's Secret's housemark (the mark of the
manufacturer), and that Victoria's Secr et uses a disclaimer
with its mark that explicitly states that The Miracle Bra
swimwear is unrelated to Miraclesuit or A&H. The court
also concluded that Victoria's Secret's intent, the paucity of
credible incidents of actual confusion, and the
sophistication of the consumers weighed in favor of
Victoria's Secret, while the competitive proximity of the
products and the strength of the Miraclesuit mark weighed
in favor of A&H. Taking all this into account, the District
Court found no likelihood of direct confusion between the
marks, rejected A&H's direct confusion claim, and, on the
assumption that the disclaimer would continue to be used
in an effective manner, denied injunctive relief.
Notwithstanding that likelihood of confusion is an issue of
fact subject to deferential review, the District Court's
disposition of the direct confusion claim has given rise to a
number of important issues in this appeal.
A&H first contends that multi-factored tests, like the one
used by the District Court, are inapplicable to competing
goods, and that with directly competing goods a court
should examine only the similarity of the marks. W e
disagree. Though a court need not look beyond the marks
when goods are directly competing and the marks virtually
identical, we conclude that the factors we have developed in
the noncompeting goods context are helpful tools and
should be used to aid in the determination of the likelihood
of confusion in other cases. Our jurisprudence does not
preclude this result, and the District Court did not err in
taking other considerations into account.
Alternatively, A&H submits that the District Court erred
as a matter of law by not following precisely the ten-factor
Lapp test that we have previously developed to determine
likelihood of confusion. It argues that by not considering
certain factors that would clearly have weighed in favor of
A&H, the District Court distorted the likelihood of
confusion standard. We reject this argument for two
reasons. First, we have developed the ten-factor Lapp test
only as a guide. Although all of the factors can be useful,
5
the Lanham Act does not require that they be followed
precisely so long as the relevant comparisons suggested by
the test are made. More importantly, although the District
Court arguably used a creative test, all of the Lapp factors
are integrated, in one way or another, into the court's
analysis. Therefore, even if the Lapp test were mandatory,
A&H could not show prejudice.
A&H also argues that, regardless of the test to be used,
the District Court clearly erred in resting its finding that
there was no likelihood of confusion on V ictoria Secret's
disclaimer. A&H asserts that it constitutes legal error even
to consider such a disclaimer, but we disagr ee, seeing no
reason to forbid courts from considering this kind of
distinguishing feature. In this case, the District Court
properly weighed the disclaimer. W e also reject A&H's
assertion that the District Court erred in failing to give
weight to the refusal of a Patent and T rademark Office
("PTO") examining attorney to register The Miracle Bra
mark for swimwear because of its similarity to Miraclesuit.
Where, as here, the PTO examining attor ney did not
consider all the relevant factors, and lacked significant
information that was available to the District Court, his
determination need not be given weight. In fact, one legal
error that we do find weighs in Victoria's Secret's favor: The
District Court erred by relying almost entirely on its
classification of A&H's mark as "suggestive to arbitrary" in
its determination that Miraclesuit was a conceptually
strong mark deserving of a high degree of protection. In
sum, we conclude that neither the District Court's fact-
finding nor its balancing of factors warrants r eversal, and
hence we will affirm its judgment on the dir ect confusion
claim.
As for the reverse confusion claim, A&H challenges the
District Court's treatment as inadequate, and inconsistent
with the method laid out in our leading reverse confusion
case, Fisons Horticulture, Inc. v. V igoro Industries, Inc., 30
F.3d 466 (3d Cir. 1994). Fisons adopted the doctrine of
reverse confusion, and used the Lapp factors to assess the
likelihood of such confusion, with a few minor
modifications. The District Court interpreted our precedents
to require a two-step inquiry, engaging the Lapp factors
6
only after an initial assessment that the disparity in
commercial strength reached a high threshold. Because the
threshold degree of commercial disparity that the court
believed was required was not met, the court did not even
examine whether there existed a likelihood of confusion.
After reviewing Fisons and our pr ecedent, we are
persuaded that the District Court erred in fashioning a two-
step inquiry, and in failing to consider the Lapp factors as
they apply to reverse confusion claims. W e will demonstrate
that the application of some of the factors changes in the
reverse confusion context, and we conclude that, on the
record before us, the judgment must be vacated with
respect to the reverse confusion claim and the case
remanded for further proceedings.
I. Facts3
The Miraclesuit bathing suit is made by A&H, which
manufactures ten percent of all swimwear in the United
States. The Miraclesuit is distributed by Swim Shaper, a
division of Mainstream Swimsuits. The Miraclesuit is
advertised as having a slimming effect on the wearer
without using uncomfortable girdle-like binds. Its material
purportedly smooths out middle body bulges and works
with a flattering design to confuse the eye such that the
wearer is advised, in advertising and in tags that generally
accompany the product, that she will "[l]ook ten pounds
lighter in 10 seconds[:] The ten seconds it takes to slip it
on." Miraclesuits also include tags indicating that they are
Swim Shaper products.
Miraclesuits, which sell for between $50 and $100, come
in both single pieces and bikinis. Many are equipped with
push-up bras, shaping or underwire bras, or simple,
unshaped bras. They are typically sold to trade buyers for
_________________________________________________________________
3. The facts are set forth more fully in the District Court's three opinions
in this case. See A&H Sportswear Co. v. Victoria's Secret Stores, Inc., 926
F. Supp. 1233 (E.D. Pa. 1996); A&H Sportswear Co. v. Victoria's Secret
Stores, Inc., 967 F. Supp. 1457 (E.D. Pa. 1997) (as amended); A&H
Sportswear Co. v. Victoria's Secret Stor es, Inc., 57 F. Supp. 2d 155 (E.D.
Pa. 1999).
7
department store sales and national mail-or der catalogues,
and, on two occasions, they were featur ed in the Victoria's
Secret catalogue. A&H received a trademark registration for
the mark Miraclesuit in the fall of 1992. The District Court
found that A&H has spent over $1.2 million to advertise the
Miraclesuit in magazines and trade papers, and has
received the equivalent of $1.5 million of advertising in "free
publicity," i.e., publicity in trade magazines, consumer
columns, and the general press. The advertising and
publicity campaign has been a success, and Miraclesuits
constitute approximately ten percent of all of A&H's sales.
While A&H is busy selling skinny waists and midrif fs,
Victoria's Secret, the nation's pr emier lingerie seller, has
focused on instant enlargements of the bust. 4 In 1993,
Victoria's Secret released The Miracle Bra, a padded push-
up bra. Victoria's Secret filed an application to register its
The Miracle Bra trademark, and unleashed an avalanche of
advertising and publicity, ultimately spending over $13
million on The Miracle Bra products. The campaign
succeeded, and sales of The Miracle Bra products have
topped $140 million since they were first introduced.
In 1994, Victoria's Secret's trademark application for The
Miracle Bra mark on lingerie was approved. Later that year,
Victoria's Secret moved The Miracle Bra mark into
swimwear, and The Miracle Bra swimsuit and The Miracle
Bra bikini started appearing in Victoria's Secret catalogues.
(The Miracle Bra lingerie and swimwear are sold only in
Victoria's Secret stores and catalogues.). The cost of The
Miracle Bra swimwear varies, but it is typically in the
neighborhood of $70, and The Miracle Bra and Victoria's
Secret tags are prominently featur ed on all swimwear. This
product also succeeded: The total sales of The Miracle Bra
swimsuits reached $28 million by summer 1997. The last
critical fact regarding this swimwear is that, as a result of
_________________________________________________________________
4. Victoria's Secret Stores, a Delaware corporation with headquarters in
Columbus, Ohio, has over 650 stores nationwide. Victoria's Secret
Catalogue, a Delaware corporation with headquarters in New York City,
distributes over 300 million catalogues annually. Both companies are
independent subsidiaries of Intimate Brands, Inc., owned by The
Limited, Inc., which is based in London. See A&H Sportswear Inc. v.
Victoria's Secret Stores, Inc. , 166 F.3d 197, 200 (3d Cir. 1999).
8
this litigation, Victoria's Secret has committed itself to
using the following disclaimer with all promotion,
advertising, and sales of The Miracle Bra: "The Miracle Bra
Swimwear Collection is exclusive to Victoria's Secret and is
not associated with Miraclesuit by Swimshaper ."
In 1995, after this litigation began, Victoria's Secret
applied to the PTO for a trademark for The Miracle Bra for
swimsuits, bathing suits, and bikinis. Because it had
previously conducted a search for The Miracle Bra as
applied to lingerie, which had led it to the conclusion that
The Miracle Bra did not threaten to infringe on other
trademarks, Victoria's Secret had not conducted a separate
trademark search of The Miracle Bra trademark as it
applied to swimwear. However, the PTO examining attorney
denied Victoria's Secret's application due to its similarity to
Miraclesuit because he determined that: (1)"Miracle" was
the dominant feature of each mark; and (2) the product
lines overlap. The denial was not appealed.
II. Procedural History
In December 1994, A&H filed a complaint against
Victoria's Secret, alleging direct and reverse trademark
infringement, unfair competition, dilution, and unjust
enrichment. The District Court held a bench trial on
liability in the fall of 1995, and a damages and r elief trial
in 1996. The court found that Victoria's Secr et's use of The
Miracle Bra on its lingerie created no likelihood of
confusion with A&H's Miraclesuit. See A&H Sportswear Co.
v. Victoria's Secret Stores, Inc. , 926 F. Supp. 1233, 1264
(E.D. Pa. 1996) ("A&H I"). However , with regard to Victoria's
Secret's use of The Miracle Bra mark on swimwear, the
District Court found a "possibility of confusion" with A&H's
Miraclesuit swimwear. See id. at 1269. Based upon this
finding, it ordered Victoria's Secret not to use The Miracle
Bra tag with swimwear unless it was accompanied by the
disclaimer: "The Miracle Bra (TM) swimwear collection is
exclusive to Victoria's Secret and not associated with
Miraclesuit (R) by Swim Shaper (R)." A&H Sportswear Co. v.
Victoria's Secret Stores, Inc. , 967 F. Supp. 1457, 1482 (E.D.
Pa. 1997) ("A&H II"). The District Court also ordered that
royalties on past and future sales of The Miracle Bra
9
swimsuits be paid to A&H. See id. at 1483. Both parties
appealed. Although the District Court granted a stay of its
order pending appeal, Victoria's Secr et has continued to
use the disclaimer voluntarily and has repr esented to us at
oral argument that it will continue to do so r egardless of
the outcome of this litigation.
During the prior appeal, we heard the case en banc to
consider the viability of the "possibility of confusion"
standard originally used by the District Court. We rejected
that standard, and remanded the case to the District Court
to apply the traditional "likelihood of confusion" standard to
the swimsuits' marks. See A&H Sportswear Inc. v. Victoria's
Secret Stores, Inc., 166 F.3d 197, 206 (3d Cir. 1999) ("A&H
III"). The bulk of the en banc opinion is devoted to
explaining the rejection of the "possibility of confusion"
standard. However, we also commented on what has
become a central question in the current appeal, namely,
whether the likelihood of confusion analysis dif fers for
competing, as opposed to noncompeting, goods:
[T]he standard to be applied when goods that are the
subject of a trademark infringement claim ar e directly
competing, as is the situation with [Miraclesuit and
The Miracle Bra swimwear], is differ ent than that
applied when the goods are not competing. The ten-
factor test for likelihood of confusion between marks
that are not competing, derived from Scott Paper Co. [v.
Scott's Liquid Gold, Inc.], 589 F.2d[1225,] 1229 [(3d
Cir. 1978)], is not required when the goods directly
compete. In fact, we have said that "wher e the
trademark owner and the alleged infringer deal in
competing goods or services, the court need rar ely look
beyond the mark itself.
Id. at 202 (quoting Interpace Corp. v. Lapp, Inc., 721 F.2d
460, 462 (3d Cir. 1983)). We also suggested that the District
Court should, on remand, consider whether this case
implicated the reverse confusion doctrine, noting the
possibility that the later-entering mark of the junior user--
in this case the larger, more powerful company (Victoria's
Secret)--might be overwhelming the mark of the prior, or
senior, user (A&H), the phenomenon typifying reverse
confusion.
10
Following our mandate, the District Court applied the
"likelihood of confusion" test and found that there was no
likelihood of direct confusion and no gr ounds for
consideration of reverse confusion. It ther efore denied the
request for injunctive relief. See A&H Sportswear Co. v.
Victoria's Secret Stores, Inc. , 57 F. Supp. 2d 155, 178-79
(E.D. Pa. 1999) ("A&H IV"). A&H appeals. We review the
District Court's factual determinations for clear error, but
we give plenary review to its legal conclusions. See A&H III,
166 F.3d at 202-03. Likelihood of confusion is a factual
question, see id., but legal principles govern what evidence
may, or must, be considered by the District Court in
reaching that conclusion, and also what standar ds apply to
its determination. We review the denial of the request for
injunctive relief for abuse of discretion. See Warner-Lambert
Co. v. Breathasure, Inc., 204 F .3d 87, 89 n.1 (3d Cir. 2000).
III. The Direct Confusion Claim
We measure federal trademark infringement, 15 U.S.C.
S 1114, and federal unfair competition, 15 U.S.C.
S 1125(a)(1)(A), by identical standards. See A&H III, 166
F.3d at 202.5 To pr ove either form of Lanham Act violation,
_________________________________________________________________
5. Section 32(1) of the Lanham Act provides:
Any person who shall, without the consent of the r egistrant--
(a) use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark in connection with the sale,
offering for sale, distribution, or advertising of any goods or services
on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; . . . shall be liable in
a civil action by the registrant . . . .
15 U.S.C. S 1114(1).
The same standard is embodied in section 43(a) of the Lanham Act,
which governs unfair competition claims. That section provides, in
pertinent part:
Any person who, on or in connection with any goods or services, . . .
uses in commerce any word, term, name, symbol, or device, . . . or
any false designation of origin . . . which--
(A) is likely to cause confusion, or to cause mistake, or to deceive as
to . . . the origin, sponsorship, or approval of his or her goods,
11
a plaintiff must demonstrate that (1) it has a valid and
legally protectable mark; (2) it owns the mark; and (3) the
defendant's use of the mark to identify goods or services
causes a likelihood of confusion. See Commer ce Nat'l Ins.
Servs., Inc. v. Commerce Ins. Agency, Inc., 214 F.3d 432,
437 (3d Cir. 2000). The plaintiff bears the burden of proof.
See American Home Prods. Corp. v. Barr Labs., Inc., 834
F.2d 368, 371 (3d Cir. 1987). It is undisputed that A&H
owns Miraclesuit, and that it is a valid and legally
protectable mark. Therefore, the questions in this case
involve the delineation and application of standar ds for the
evaluation of likelihood of confusion.
A. The Lapp Test and the District Court's Opinion
A likelihood of confusion exists when "consumers viewing
the mark would probably assume that the pr oduct or
service it represents is associated with the source of a
different product or service identified by a similar mark."
Dranoff-Perlstein Assocs. v. Sklar, 967 F .2d 852, 862 (3d
Cir. 1992) (quotation marks omitted). In Interpace Corp. v.
Lapp, Inc., 721 F.2d 460 (3d Cir. 1983), we stated that
when the goods involved in a trademark infringement
action directly compete with each other , a court "need
rarely look beyond the mark itself " to determine the
likelihood of confusion. Id. at 462. For noncompeting goods,
we developed a nonexhaustive list of factors to consider in
determining whether there is a likelihood of confusion
between marks:
(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 factors indicative of
the care and attention expected of consumers when
making a purchase;
_________________________________________________________________
services, or commercial activities by another person . . . shall be
liable in a civil action by any person who believes that he or she is
or is likely to be damaged by such act.
15 U.S.C. S 1125(a)(1).
12
(4) the length of time the defendant has used the mark
without evidence of actual confusion arising;
(5) the intent of the defendant in adopting the mark;
(6) the evidence of actual confusion;
(7) whether the goods, though not competing, ar e
marketed through the same channels of trade and
advertised through the same media;
(8) the extent to which the targets of the parties' sales
efforts are the same;
(9) the relationship of the goods in the minds of
consumers because of the similarity of function;
(10) other facts suggesting that the consuming public
might expect the prior owner to manufacture a product
in the defendant's market, or that he is likely to
expand into that market.
Id. at 463 (citing Scott Paper Co. v. Scott's Liquid Gold, Inc.,
589 F.2d 1225, 1229 (3d Cir. 1978)). Throughout the
opinion we will refer to these factors as the"Lapp" factors.
The District Court recognized that we have not"explicitly
elucidated what kind of factors should be consider ed in the
case of directly competing goods." A&H IV, 57 F. Supp. 2d
at 163. It chose not to use the Lapp test, but instead
developed its own test, drawing on many of the same
factors:
(1) strength of the plaintiff 's mark;
(2) similarity between the marks;
(3) similarity of the products and the degr ee to which
they directly compete with each other;
(4) marketing or advertising channels used;
(5) sophistication of consumers;
(6) defendant's intent in selecting the mark; and
(7) incidents of actual confusion.
Id. A&H contends that the District Court err ed in three
ways in applying these factors. First, it ar gues that when
13
goods are directly competing, a district court need only
examine the similarity of the marks. Second, it submits
that inasmuch as the District Court fashioned its own test,
the Lapp factors it omitted would have tipped the balance
in favor of finding a likelihood of confusion. Third, it
contends that on any test the similarity of the marks
creates a likelihood of confusion.
B. The Test for Directly Competing Goods
We have not previously settled upon a method that
district courts should use to examine whether ther e exists
a likelihood of confusion between directly competing goods.
Uncertainty on this point in the district courts within the
circuit, as demonstrated in the margin, counsels that we
clarify this area of law.6
The multi-factored test rescribed above was developed to
determine likelihood of confusion for noncompeting goods.
See Versa Prods. Co., Inc. v. Bifold Co. (Mfg.) Ltd., 50 F.3d
189, 202 (3d Cir. 1995). This genesis is apparent in the
substance of the test: factor (7) directs a court to look at
the markets of the goods "though not competing"; factor (9)
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6. In Capital Bonding Corp. v. ABC Bail Bonds, Inc., 69 F. Supp. 2d 691
(E.D. Pa. 1999), the court cited Lapp in support of its conclusion that
"[b]ecause Capital and ABC deal in competing services, we need only
compare the Capital image with the ABC image and determine whether
the marks are confusingly similar."Id. at 696. In New York Style Bagel
Chip Co. v. That's Entertainment, Inc., No. 90-7759, 1992 WL 46854
(E.D. Pa. Mar. 9, 1992), the court followed the statement in Lapp that
the court need not look beyond the marks in deter mining likelihood of
confusion if they are directly competing, see id. at *9, but held that the
Lapp factors could be used when relevant and helpful, see id. at *13. In
Barnes Group, Inc. v. Connell Ltd. Partnership, 793 F. Supp. 1277, 1300
(D. Del. 1992), however, the court used all of the Lapp factors for
competing goods without a discussion of whether such a use was
appropriate. Likewise, in Icon Solutions, Inc. v. IKON Office Solutions, Inc.,
No. 97-4178, 1998 WL 314672 (E.D. Pa. June 15, 1998), the court used
four Lapp factors, noting that the Lapp factors can be used in directly
competing cases although developed for noncompeting goods. See id. at
*6-*7; see also W.L. Gore & Assocs., Inc. v. Johnson & Johnson, 882 F.
Supp. 1454, 1457-60 (D. Del. 1995) (using some Lapp factors in
determining that a preliminary injunction was not required).
14
directs that the court examine the "similarity of function";
and factor (10) directs that the court look at"other facts
suggesting that the consuming public might expect the
prior owner to manufacture a product in the defendant's
market, or that he is likely to expand into that market."
These factors are not apposite for directly competing goods:
By definition, the goods are competing, their function is the
same, and the senior and junior user are alr eady in each
other's markets.
Nonetheless, despite the test's etiology, the raison d'etre
of the Lapp factors and the purpose of their development
was to aid in the navigation of the difficult course of
determining a "likelihood of confusion." A district court
should not be foreclosed from using any factors that it
deems helpful in analyzing whether a likelihood of
confusion exists between given products, whether or not
they directly compete. Lapp's suggestion that, for competing
goods, the court "need rarely look beyond the mark itself,"
Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 462 (3d Cir.
1983), may be an exercise in unjustified optimism; cases
are often not easy, and courts will frequently need help in
sorting out the likelihood of confusion. District courts
within this circuit, as well as other appellate courts, have
found that consideration of the Lapp factors (or their
analogs from other circuits) can be quite useful for
determining likelihood of confusion even when the goods
compete directly. See, e.g., Barr e-National, Inc. v. Barr
Labs., Inc., 773 F. Supp. 735, 742 (D.N.J. 1991); Banff, Ltd.
v. Federated Dep't Stores, Inc., 841 F .2d 486, 490 (2d Cir.
1988).
Further, we recognize that many of the Lapp factors that
are specifically applicable only to noncompeting goods are
often used by courts to determine, in thefirst instance,
whether goods are or are not directly competing. This
makes the plaintiff 's proposed pr ohibition on the
examination of evidence beyond the marks themselves
somewhat illusory. For instance, in AMF Inc. v. Sleekcraft
Boats, 599 F.2d 341 (9th Cir. 1979), the Court of Appeals
for the Ninth Circuit concluded that two lines of
recreational boats were not dir ectly competitive because
they were marketed to different consumers and were
15
designed for different uses. See id. at 348. This inquiry
approximates Lapp factors (8) and (9), which look to the
different functions of the products and the different target
customers. Similarly, in Induct-O-Matic Corp. v.
Inductotherm Corp., 747 F.2d 358 (6th Cir. 1984), the court
affirmed a district court's conclusion that the parties were
direct competitors based on an examination of the
similarity of the parties' customer base, geographical
trading area, and products, see id. at 362, factors which
approximate Lapp factors (7), (8), and (9). Indeed, in A&H
I, the District Court first applied the Lapp test in analyzing
A&H's infringement claim regarding the use of The Miracle
Bra mark on lingerie, and then observed that much of the
same analysis could be used to determine whether The
Miracle Bra swimsuit and the Miraclesuit shar ed the same
market. See id. at 1266.7
The above observations lead us to conclude that the Lapp
factors should be used both for competing and for
noncompeting goods. As for those factors that specifically
refer to noncompeting goods, we believe that, rather than
force courts first to inquire as to whether or not the goods
are directly competitive simply for the purpose of
determining if those factors apply--and, pr esumably,
applying Lapp factors to make this initial determination--
factors (7), (9), and (10) of the Lapp test must be adapted
_________________________________________________________________
7. Courts have also occasionally borrowed fr om antitrust law's definition
of "relevant market" and "submarket" to determine whether goods are
directly competitive for the purpose of unfair competition claims. See,
e.g., Sara Lee Corp. v. Kayser-Roth Corp., 1994 U.S. Dist. LEXIS 19198,
at *98 (M.D.N.C. Oct. 13, 1994); Worthington Foods, Inc. v. Kellogg Co.,
732 F. Supp. 1417, 1436 (S.D. Ohio 1990); cf. A&H I, 926 F. Supp. at
1267 (citing to an antitrust case in its inquiry as to whether The Miracle
Bra swimwear and Miraclesuit competed in the same market). In Brown
Shoe Co., Inc. v. United States, 370 U.S. 294 (1962), the Supreme Court
explained that products may belong to distinct"submarkets," which may
be determined by reference to, inter alia, the functions of the products,
whether the products are marketed to different consumers via different
vendors, and whether the public understands the submarkets to be
"separate economic entit[ies]." Id. at 325. These factors for discovering
the presence of competition in the antitrust r ealm also track Lapp
factors (7) through (10).
16
to make them applicable whether the products directly
compete or not.
In holding that the Lapp test is to be employed when
examining both competing and noncompeting goods, we
acknowledge that we have at times suggested that the
method for comparing competing goods is differ ent from
that for noncompeting goods. In Williamson-Dickie
Manufacturing Co. v. Davis Manufacturing Co., 251 F.2d 924
(3d Cir. 1958), for example, we did not look beyond the
marks themselves in upholding a trial court's deter mination
that the marks "Dickie Davis" and "Dickie's" for boys'
clothing were confusingly similar. See id. at 926-27.
Furthermore, in Lapp we stated that
[w]here the trademark owner and the alleged infringer
deal in competing goods or services, the court need
rarely look beyond the mark itself. In those cases the
court will generally examine the register ed mark,
determine whether it is inherently distinctive or has
acquired sufficient secondary meaning to make it
distinctive, and compare it against the challenged
mark.
721 F.2d at 462 (emphasis added). Additionally, in Fisons,
we noted that the
showing of proof plaintiff must make for[likelihood of
confusion] depends on whether the goods or services
offered by the trademark owner and the alleged
infringer are in direct competition . . . . Where the
goods or services are not competing, the similarity of
the marks is only one of a number of factors the court
must examine to determine likelihood of confusion.
30 F.3d at 472-73. Finally, in A&H III , we stated that "the
standard to be applied when goods . . . ar e directly
competing . . . is different than that applied when the goods
are not competing." 166 F.3d at 202. In each of these cases,
we arguably implied that when the goods ar e competing,
the similarity of the marks is the only relevant factor.
Nonetheless, we read our prior opinions on this subject
to counsel only that a district court may, if it so chooses,
examine only mark similarity for directly competing goods.
17
A&H urges us to take the quoted statement fr om A&H III to
mean that a district court should not consider any factors
at all beyond the similarity of the marks themselves.
However, we believe that the word "standard" is different
from the word "test." The better r eading of this statement is
the literal one: The "standard" for deter mining when marks
are likely to be confused is differ ent when the marks
directly compete, i.e., the factor regar ding the similarity of
marks may increase in importance, but it does not
eliminate the other factors entirely. This pr oposition is not
only unremarkable, it flows naturally fr om the Lapp test,
which considers the competition and potential competition
of the products in the marketplace. We have certainly never
held that a court may not look beyond the marks
themselves to determine likelihood of confusion. The quote
from Lapp itself, rescribed in our prior opinion in this case
("the court need rarely look beyond the mark itself ")
presumes that a court might sometimes need to look
beyond the mark. Lapp, 721 F.2d at 462.
We think that this inference is a sound one, for there
appears to be no reason, statutory or otherwise, to impose
the restrictive rule proposed by A&H. Indeed, the cases
relied upon by A&H do no more than suggest that the Lapp
inquiry may be unnecessary in some directly competing
goods cases. See, e.g., A&H III, 166 F.3d at 202 (holding
that in directly competing goods cases, the multi-factored
test "is not required"). At all events, because we have never
before been confronted with this question, any implication
in our prior cases that courts are foreclosed from looking
beyond mark similarity for competing goods would have
been dictum.
Our conclusion that the Lapp factors may be used to
determine the likelihood of confusion in cases of directly
competing goods, at least when the marks are not identical,
accords with the approaches of the Second, Sixth, Eighth,
and Ninth Circuits, which also have appr oved using multi-
factored tests, developed for noncompetitive goods, in the
competitive goods arena. See Banff, Ltd. v. Federated Dep't
Stores, Inc., 841 F.2d 486, 490 (2d Cir. 1988); Jet, Inc. v.
Sewage Aeration Sys., 165 F.3d 419, 421-22 (6th Cir.
1999); Duluth News-Tribune v. Mesabi Publ'g Co., 84 F.3d
18
1093, 1096 (8th Cir. 1996); Dr. Seuss Enters., L.P. v.
Penguin Books U.S.A., Inc., 109 F.3d 1394, 1404 (9th Cir.
1997).
As explained above, we do not hold that a District Court
must use the factors. In fact our pr ecedents suggest the
opposite. If products are directly competing, and the marks
are clearly very similar, a district judge should feel free to
consider only the similarity of the marks themselves. See,
e.g., Opticians Ass'n of Am. v. Independent Opticians of Am.,
920 F.2d 187, 195 (3d Cir. 1990) ("[v]ery little analysis" was
necessary in a case where a splinter gr oup of a larger
organization continued to use the organization's collective
mark). Moreover, the court often need not apply each and
every factor; when goods are directly competing, both
precedent and common sense counsel that the similarity of
the marks takes on great prominence.8 At all events, the
factors are meant to be tools, not hurdles. On the other
hand, when, as in this case, the degree of confusing
similarity of the marks is not clear, see Barre-National, Inc.,
773 F. Supp. at 742, a court can turn to the other factors.
Here, the District Court did not err in choosing to look
beyond the marks themselves.
To summarize, we hold that whether or not the goods
directly compete, the Lapp factors should be employed to
test for likelihood of confusion. Therefor e, likelihood of
confusion for both competing and noncompeting goods
should be tested with reference to the following:
(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 factors indicative of
the care and attention expected of consumers when
making a purchase;
(4) the length of time the defendant has used the mark
without evidence of actual confusion arising;
_________________________________________________________________
8. Although a district court may reasonably decide that certain of the
Lapp factors are inapplicable or unhelpful in a particular case, we do
counsel that, to facilitate review, the court explain its choice not to
employ those factors.
19
(5) the intent of the defendant in adopting the mark;
(6) the evidence of actual confusion;
(7) whether the goods, competing or not competing, are
marketed through the same channels of trade and
advertised through the same media;
(8) the extent to which the targets of the parties' sales
efforts are the same;
(9) the relationship of the goods in the minds of
consumers, whether because of the near-identity of the
products, the similarity of function, or other factors;
(10) other facts suggesting that the consuming public
might expect the prior owner to manufacture both
products, or expect the prior owner to manufacture a
product in the defendant's market, or expect that the
prior owner is likely to expand into the defendant's
market.
As we stress further below, the Lapp test is a qualitative
inquiry. Not all factors will be relevant in all cases; further,
the different factors may properly be accorded different
weights depending on the particular factual setting. A
district court should utilize the factors that seem
appropriate to a given situation.
C. The District Court's Methodology
A&H argues in the alternative that inasmuch as the
District Court used a multi-factored test, it should have
considered all of the Lapp factors, and that the "missing"
factors would have favored A&H. It ther efore contends that
the court erred as a matter of law in fashioning its own
test. However, the test used by the District Court is
functionally the same as the Lapp test. A comparison of
these factor lists reveals that the ostensibly missing Lapp
factors appear to be incorporated into the District Court's
test. Lapp factor (9), "the relationship of the goods in the
minds of the consumers because of the similarity of
function," and Lapp factor (8), "the extent to which the
targets of the parties' sales efforts ar e the same," are
subsumed in the court's factor (3), which considers the
20
"similarity of the products and the degr ee to which they
directly compete with each other." Lapp factor (4), "the
length of time the defendant has used the mark without
evidence of actual confusion" is subsumed along with factor
(6), "evidence of actual confusion," within the District
Court's factor (7), "incidents of actual confusion." Lapp
factor (10), "other facts suggesting that the consuming
public might expect the prior owner to manufactur e both
products, or expect the prior owner to manufacture a
product in the defendant's market, or expect that the prior
owner is likely to expand into the defendant's market," is
unmentioned, but also unnecessary, because the similarity
of the goods and their competitive relationship was
accounted for in the court's factor (3).
A&H essentially argues that, had the Lapp test been
applied as written, a greater absolute number of factors
would have been decided in its favor, thus leading to a
different outcome; for instance, the court's factor (3), rather
than counting in its favor a single time, would have been
divided into at least two factors, each of which would have
weighed in its favor. However, we have repeatedly insisted
that the Lapp factors are not to be mechanically tallied, but
rather that they are tools to guide a qualitative decision.
See Fisons, 30 F.3d at 476 n.11 ("The weight given to each
factor in the overall picture, as well as its weighing for
plaintiff or defendant, must be done on an individual fact-
specific basis.").
The District Court did not engage in a simplistic
quantitative comparison, but accurately understood the
role of the factors:
No single factor is dispositive, and a finding of a
likelihood of confusion does not requir e a positive
finding on a majority of these factors. Instead, they are
simply a guide to help determine whether confusion
would be likely between the use of two contested
trademarks on competing products. In addition to the
listed factors, a court is free to consider other relevant
factors in determining whether a likelihood of
confusion exists.
A&H IV, 57 F. Supp. 2d at 164 (citations omitted). Although
it might promote clarity always to use the same factors in
21
the same order, the District Court cover ed all the ground
covered by the Lapp factors and did so with care. Therefore,
we conclude, the court did not err in its use of the factors.
IV. Review of the District Court's Analysis
Because we hold that the District Court's methodology
was functionally similar to the Lapp test, we will review the
court's decision on its own terms; i.e., using the multi-
factored test that the District Court cr eated. In the future,
however, for the sake of consistency, district courts should
employ the formulation of the test for confusion as set forth
in Lapp and in Part III.B, supra.
A. Similarity of the Marks
The single most important factor in determining
likelihood of confusion is mark similarity. See Fisons, 30
F.3d at 476. The test for such similarity is" `whether the
labels create the same overall impression when viewed
separately.' " Id. (quoting Banf f, Ltd. v. Federated Dep't
Stores, Inc., 841 F.2d 486, 492 (2d Cir. 1988)). Marks "are
confusingly similar if ordinary consumers would likely
conclude that [the two products] shar e a common source,
affiliation, connection or sponsorship." Id. Side-by-side
comparison of the two marks is not the proper method for
analysis when the products are not usually sold in such a
fashion. Instead, an effort must be made to move into the
mind of the roving consumer. See Ciba-Geigy Corp. v. Bolar
Pharm. Co., Inc., 747 F.2d 844, 851 (3d Cir. 1984)
(affirming a district court's conclusion that, in the trade
dress context, "[r]ealistically, the likelihood of confusion
cannot be assessed by a side-by-side comparison of the
plaintiff 's and defendant's products. It is the overall
physical appearance of defendant's trade dress which is
critical"); 3 J. McCarthy, Trademarks and Unfair
Competition S 23:59, at 23-162 (4th ed. 2000) ("The law
does not require that the reasonably prudent purchaser
keep a handy file of photographs and labels which he or
she must pull out to compare with the label of every
product purchased.").
22
The District Court acknowledged this principle,
recognizing that "side-by-side comparison of the conflicting
marks is improper if that is not the way buyers see the
products in the market." A&H IV, 57 F. Supp. 2d at 167-68.
However, the general rule that marks should be viewed in
their entirety does not undermine the common-sense
precept that the more forceful and distinctive aspects of a
mark should be given more weight, and the other aspects
less weight. See Country Floors, Inc. v. Partnership of
Gepner and Ford, 930 F.2d 1056, 1065 (3d Cir. 1991)
("When the dominant portions of the two marks ar e the
same, confusion is likely."). Applying these principles, the
court looked at the sight, sound, and meaning of the
marks, and considered the effect of the housemarks and
Victoria's Secret's disclaimer.
1. Sight, Sound, Meaning
The District Court closely examined the sight, sound, and
meaning of the competing marks and concluded that,
purely on the aesthetic level, the marks alone are
"somewhat distinct." A&H IV, 57 F . Supp. 2d at 167.
Considering the sound of the marks, it noted that although
they share the term MIRACLE, ther e are different numbers
of syllables, and the last syllable of each is dif ferent.
Moreover, Miraclesuit bleeds two wor ds together while The
Miracle Bra consists of three discrete wor ds. In short, the
District Court concluded that the two marks sound
different. We agree. The court also properly noted that in
previous cases, where courts had found a likelihood of
confusion based on sound, a closer phonetic similarity was
often present. See id. (citing Bell Publ'g Corp. v. Bantam
Doubleday Dell Publ'g Group, 17 U.S.P .Q.2d 1634, 1637
(E.D. Pa. 1990) ("Dell" and "Bell"); Pocono Rubber Cloth Co.
v. J.A. Livingston, Inc., 79 F.2d 446, 448 (3d Cir. 1935)
("swavelle" and "swavel")).
The District Court recognized that other , less similar-
sounding marks had been found to be confusingly similar,
as in Williamson-Dickie Manufacturing Co. v. Davis
Manufacturing Co., 251 F.2d 924, 926-27 (3d Cir. 1958),
where the court upheld the trial court's deter mination that
the marks "Dickie Davis" and "Dickie's" were confusingly
23
similar. However, it concluded that these cases could be
distinguished because the presentations of the Miraclesuit
and The Miracle Bra marks were sufficiently different to
create an overall impression that was not confusingly
similar, especially in light of Victoria's Secret's disclaimer
and the use of the housemarks, as discussed infra Section
IV.A.2.
Turning to the visual difference, the court noted that
Miraclesuit is often accompanied by the "Look ten pounds
lighter in ten seconds!" slogan, in various incar nations.
Moreover, the court observed that:
The Miracle Bra is presented in either all capital block
letters or in small capital letters with the letters, T,M,B
alone in upper capital letters, while the Miraclesuit has
sometimes been advertised with the initial letter M
capitalized and the rest of the mark in lower -case
letters in italicized script or as one word with both the
M and S capitalized.
A&H IV, 57 F. Supp. 2d at 167. The court also determined
that the meaning of the two marks was slightly dif ferent, as
the descriptive word "bra" focused attention on the
brassiere portion of the Victoria's Secr et product, rather
than on the entire suit. See A&H IV, 57 F. Supp. 2d at 166-
67 (stating that the term "bra" distinguishes the Victoria's
Secret product because it "identifies the particular feature
of the garment where the `miracle' is manifested"). This
conclusion accords with the District Court'sfinding in A&H
I, which was upheld by the en banc court. See A&H III, 166
F.3d at 195 ("[D]escriptive ter ms (such as `bra' and `suit')
must be considered in assessing infringement.").
Taking all of these elements into account, the District
Court concluded that, without consideration of the r ole of
the housemark and the disclaimer, "the Miraclesuit mark
and The Miracle Bra mark are somewhat distinct in sight,
sound and meaning." A&H IV, 57 F. Supp. 2d at 168. A&H
challenges this analysis. It begins by asserting that,
because the dominant portion of each mark is the wor d
"Miracle," and the other words in each mark are generic
(bra, swimwear, suit, the), the marks must be deemed
confusingly similar. It grounds this analysis on Country
24
Floors, Inc. v. Partnership of Gepner and For d, 930 F.2d
1056 (3d Cir. 1991), in which we noted that it was relevant
for purposes of comparison whether, in r egistering two
marks, the PTO required certain descriptive elements of the
mark to be disclaimed. Comparing "Country T iles" and
"Country Floors," we held that because "floors" and "tiles"
were discounted as generic in the application to the PTO,
"the use of the word `Country' by the Partnership is a
material, although not necessarily a controlling,
consideration on the Corporation's claim that `Country
Tiles' logo directly infringed on the Corporation's federal
trademark." Id. at 1065.
According to A&H, the same logic dictates that these
marks are likely to be confused. Not only is the dominant
portion of each mark "MIRACLE," but the PTO examining
attorney discounted the word "bra" in Victoria's Secret's
PTO application to use The Miracle Bra for swimwear .
Furthermore, A&H notes that in Fisons , in which "Fairway"
and "Fairway Green" were up against each other, we took
the district court to task for focusing too heavily on the
differences between the marks instead of analyzing the
overall impression. There, we held that"a subsequent user
may not avoid likely confusion by appropriating another's
entire mark and adding descriptive or non-descriptive
matter to it." Id. at 477 (quoting 2 J. McCarthy,
Trademarks and Unfair Competition S 23:15[8], at 23-102
(3d ed. 1992)).
We agree with A&H that the words"the" and "bra" and
"suit" are not particularly potent, but none of our cases has
suggested a per se rule about the impact of generic terms
within a nongeneric trademark; ultimately, the weight to be
given each word is a judgment call, best suited to the fact-
finder. Although the District Court might well have been
more emphatic in stating its ultimate conclusions on this
score, in our view, the court did not err , much less clearly
err, in finding that the sight and sound were distinct,
despite the fact that the differences involve generic elements.9
_________________________________________________________________
9. A&H also argues that all the cases cited by the District Court concern
generic or descriptive marks, and not the "highly protectable" mark of
Miraclesuit. However, as we discuss below in Part IV.B.1, the level of
25
2. The Housemarks and the Disclaimer
Having found the marks only "somewhat distinct," the
District Court further concluded that Victoria's Secret's use
of its housemark and disclaimer renders the marks
dissimilar.10 As the District Court recognized, affixing a
well-known housemark like that of Victoria's Secret can
help diminish the likelihood of confusion. See A&H IV, 57
F. Supp. 2d at 168. We have pr eviously acknowledged the
importance of housemarks in comparing the "overall
impression" of two marks. A&H III, 166 F.3d at 195. In our
previous decision, A&H III, we noted the relevance of the
fact that both The Miracle Bra and Miraclesuit wer e sold
with housemarks. See id. at 195.
Although A&H contends that Victoria's Secr et's
housemark should not have been a part of the similarity of
marks analysis, the consideration of the effect of such
marks has wide support in the case law. "Use of a strong,
well-known mark as a part of a composite name r educes
the likelihood that the remainder of the composite name
will create a commercial impression distinct from that
mark." Four Seasons Hotels Ltd. v. Koury Corp., 776 F.
Supp. 240, 247 (E.D.N.C. 1991); see also W .W.W. Pharm.
Co., Inc. v. Gillette Co., 984 F.2d 567, 573 (2d Cir. 1993)
("[W]hen a similar mark is used in conjunction with a
company name, the likelihood of confusion may be
lessened."); Astra Pharm. Prods, Inc. v. Beckman
Instruments, Inc., 718 F.2d 1201, 1205 (1st Cir. 1983)
("[O]therwise similar marks are not likely to be confused
where used in conjunction with the clearly displayed name
and/or logo of the manufacturer."); Henri's Food Prods Co.,
_________________________________________________________________
protectability is a factor discrete fr om mark strength in "likelihood of
confusion" analysis, and it is debatable whether A&H's mark even
qualifies for a "high" degree of pr otection conceptually. Further, A&H has
presented no support for its contention that the analysis of mark
similarity in a case involving generic marks is not relevant precedent for
the similarity of marks analysis in a case involving highly protected
marks.
10. The court also observed in a footnote that A&H's use of its own
housemark helps render the marks dissimilar . See A&H IV, 57 F. Supp.
2d at 168 n.17.
26
Inc. v. Kraft, Inc., 717 F.2d 352, 355-56 (7th Cir. 1983) ("Yet
even Kraft agrees that a prominent housemark may also
tend to lessen confusion."). But see Fr ehling Enters., Inc. v.
International Select Group, Inc., 192 F.3d 1330, 1337-38
(11th Cir. 1999) (adding brand name did not lessen
likelihood of confusion for marks of otherwise "striking
similarity"); A.J. Canfield Co. v. V ess Beverages, Inc., 612 F.
Supp. 1081, 1091 (N.D. Ill. 1985) ("Vess's use of its own
VESS housemark in conjunction with Chocolate Fudge is
not a defense to Canfield's infringement claim, for the use
of another's trademark constitutes infringement with or
without the use of the infringer's housemark."), aff 'd, 796
F.2d 903 (7th Cir. 1986).
Furthermore, and most importantly, the District Court
concluded that the disclaimer used by Victoria's Secret
"create[d] a distinction" between the two marks. Therefore,
it held that there was no similarity "solely based on the
presumption that Defendants will continue to use the
disclaimer when marketing The Miracle Bra swimwear ."
A&H IV, 57 F. Supp. 2d at 169. The court grounded its
finding on the fact that
[a]lthough the positioning varied, the disclaimer often
appeared in dark, black type against a light
background at the lower left corner of the actual page
on which The Miracle Bra Swimwear Collection was
featured in the catalog, just above the telephone
number for placing an order. The Pr esident of VS
Catalogue stated that since there are only a few
seconds in which to capture a consumer's attention,
placement near the telephone number is particularly
appropriate.
Id. (citations omitted). The disclaimer , the court concluded,
tips the balance and makes it unlikely that consumers will
be confused by the marks themselves.1 1
_________________________________________________________________
11. We consider Victoria's Secr et legally bound to continue the disclaimer
practice, as counsel for Victoria's Secr et stated in oral argument that it
intends to do. It would be well advised to continue to place the
disclaimer near to the telephone number in the catalogue. We judicially
notice the fact that, in one recent catalogue, the disclaimer was not so
near the telephone number, a lapse that is potentially problematic.
27
A&H argues that disclaimers cannot be consider ed when
determining likelihood of confusion, r elying heavily on
United States Jaycees v. Philadelphia Jaycees, 639 F.2d
134, 142 (3d Cir. 1981), in which we held that an
injunction requiring an infringing organization to add the
word "Philadelphia" to its use of the wor d "Jaycees" was too
narrow a remedy for a Lanham Act violation. However,
Jaycees does not control for two reasons. First, the addition
of a geographical term, unlike the use of a housemark, is
unlikely to vitiate confusion, as one could easily conclude
that the Philadelphia Jaycees was a subgroup of the larger
national organization. In this case, the contest is not
between Miraclesuit and Philadelphia Miraclesuit, a
situation that would probably cause confusion, but rather
is between two different names, one of which has a
prominent disclaimer highlighting the dif ference. Second,
our decision in Jaycees addressed the propriety of a
remedy, and was premised on a finding of a Lanham Act
violation, whereas in this case, we analyze the disclaimer
and housemark to determine whether ther e was any
violation at all.
In sum, the District Court committed no legal err or in
considering the disclaimer. We ar e also satisfied that the
District Court committed no factual error in concluding
that Victoria's Secret's disclaimer helped to dispel potential
consumer confusion between the Miraclesuit and The
Miracle Bra swimwear.
3. The PTO's Rejection of Victoria's Secr et's
Application
Finally, A&H argues that the District Court erred in
failing to give weight to the fact that the PTO attorney
rejected Victoria's Secret's application to register The
Miracle Bra for "swimsuits, bathing suits and bikinis" on
the ground that there was a likelihood of confusion between
its mark and Miraclesuit.12 A&H does not argue that a PTO
_________________________________________________________________
12. A&H also argues that the District Court did not even consider the
effect of the PTO attorney's denial. This is incorrect; in its discussion of
Victoria's Secret's intent, the court acknowledged that the PTO had
rejected Victoria's Secret's application, but concluded that such a
rejection was not dispositive. See A&H IV , 57 F.Supp. 2d at 173 n.26.
28
determination is controlling, but rather that it is important
evidence that should be given considerable weight. 13
There is some jurisprudence, although not in Third
Circuit case law, suggesting that a PTO deter mination that
marks are likely to be confused should be given weight as
a matter of law. See, e.g., Guar dian Life Ins. Co. of Am. v.
American Guardian Life Assur. Co., 943 F. Supp. 509, 523
(E.D. Pa. 1996) ("While not dispositive of the issue of
_________________________________________________________________
13. The application denial reads in r elevant part (with several citations
omitted):
A. Similarity of the Marks
. . .
The registrant's mark is Miraclesuit. The SUIT portion of the mark
is descriptive of the type of clothing, in this case, swimsuits. The
dominant part of the registered mark is MIRACLE. The dominant
part of the applicant's mark is MIRACLE. These dominant parts are
identical. When the applicant's mark is compar ed to a registered
mark, "the points of similarity are of gr eater importance than the
points of difference."
While the examining attorney cannot ignor e a disclaimed portion of
a mark and must view marks in their entireties, one feature of a
mark may be more significant in creating a commercial impression.
Disclaimed matter is typically less significant or less dominant. The
addition of generic wording such as BRA does not make the mark
less similar to the registered mark (see below for disclaimer
requirement).
B. Similarity of the Goods
If the marks of the respective parties ar e identical or highly similar,
the examining attorney must consider the commercial relationship
between the goods or services of the respective parties carefully to
determine whether there is a likelihood of confusion.
The applicant seeks to register its mark for goods in international
class 25 for "swimsuits, bathing suits and bikinis." Registrant's
goods are also under international class 25 for "swimwear." The
applicant's goods include the same goods as the r egistrants;
swimsuits, bathing suits and bikinis are types of swimwear. Because
of the confusing similarity between the registrant's mark Miraclesuit
and the applicant's mark The Miracle Bra and the identical class
and nature of the goods the, [sic] applicant's mark would cause
consumer confusion as to the source of goods.
29
likelihood of confusion, the PTO's refusal to r egister
Defendant's marks is entitled to substantial consideration
by this Court."); Driving Force, Inc. v. Manpower, Inc., 498 F.
Supp. 21, 25 (E.D. Pa. 1980) (same); Syntex Labs., Inc. v.
Norwich Pharm. Co., 437 F.2d 566, 569 (2d Cir. 1971)
(refusal of Patent Office to register a mark is "entitled to
great weight").
On the other hand, the Ninth Circuit has held that a
preliminary determination by a low-level PTO administrator
should not be accorded much weight, especially where the
PTO officer did not have access to the full panoply of
information that might inform a likelihood-of-confusion
analysis. See Carter-Wallace, Inc. v. Procter & Gamble Co.,
434 F.2d 794, 802 (9th Cir. 1970). The court explained:
Any such determination made by the Patent Office
under the circumstances just noted must be r egarded
as inconclusive since made at its lowest administrative
level. . . . The determination by the Patent Office is
rendered less persuasive still by the fact that the
Patent Office did not have before it the gr eat mass of
evidence which the parties have since presented to
both the District Court and this court in support of
their claims.
Id. (citation omitted). Moreover , other courts have held that
a court need not defer to the patent office when there is
relevant evidence not considered by the office that informs
the analysis. See, e.g., Marketing Displays, Inc. v. Traffix
Devices, Inc., 200 F.3d 929, 934 (6th Cir . 1999).
We find Carter-Wallace and Marketing Displays
persuasive, and conclude that, although an initial PTO
determination by an examining attorney may be
considered, it need not be given weight when the PTO
attorney did not review all the evidence available to the
District Court. In A&H I, 926 F.Supp. at 1255, the District
Court concluded that even a preliminary PTO determination
should be given "substantial weight," but it gave no weight
to the PTO's decision in its most recent opinion. It was not
clear error to refuse to do so. As in Carter-Wallace, the PTO
in this case was making a low-level preliminary
determination, and did not have the benefit of the complete
30
record before the District Court. Furthermore, the PTO
attorney's decision was conclusory, not sear ching or
analytical. See note 9, supra. Although we prefer to avoid
conflicts with the PTO, we do not think that such a decision
needed to receive deference here, where the District Court's
conclusion that the marks were not confusingly similar
relied upon the housemarks and Victoria's Secret's
disclaimer, matters apparently not considered by the
examining attorney.
4. Summary
In sum, we conclude that the District Court did not
clearly err in concluding that the marks themselves were
not confusingly similar, considering their overall
commercial impression, and did not make an error of law
in choosing to consider Victoria's Secr et's housemark and
the disclaimer, or in refusing to give weight to the decision
of the PTO attorney.
B. Strength of the Marks
With respect to Lapp factor (2),"the strength of the
owner's mark," the District Court applied the Fisons test,
which measures mark strength by "(1) the distinctiveness
or conceptual strength of the mark; and (2) the commercial
strength or marketplace recognition of the mark." A&H IV,
57 F.Supp. 2d at 164. The first prong of this test looks to
the inherent features of the mark; the second looks to
factual evidence of "marketplace recognition." See Fisons,
30 F.3d at 479. The District Court concluded that the mark
Miraclesuit ranged "conceptually" from suggestive to
arbitrary, and that evidence of A&H's advertising
expenditures demonstrated that Miraclesuit had
commercial strength, as well. Level of distinctiveness and
mark strength are factual determinations that we review for
clear error, see Ford Motor Co. v. Summit Motor Prods., Inc.,
930 F.2d 277, 292 n.18 (3d Cir. 1991), but our review of
legal conclusions is plenary.
31
1. Distinctiveness or Conceptual Strength
In order to determine whether a mark is protectable as a
trademark, marks are divided into four classifications: (1)
generic (such as "DIET CHOCOLATE FUDGE SODA"); (2)
descriptive (such as "SECURITY CENTER"); (3) suggestive
(such as "COPPERTONE"); and (4) arbitrary or fanciful
(such as "KODAK"). See Two Pesos, Inc. v. Taco Cabana,
Inc., 505 U.S. 763, 768 (1992).14 Arbitrary or fanciful marks
use terms that neither describe nor suggest anything about
the product; they "bear no logical or suggestive relation to
the actual characteristics of the goods." A.J. Canfield, 808
F.2d at 296 (citation omitted). Suggestive marks require
consumer "imagination, thought, or perception" to
determine what the product is. Id. at 297. Descriptive terms
"forthwith convey[ ] an immediate idea of the ingredients,
qualities or characteristics of the goods." Id. Generic marks
are those that "function as the common descriptive name of
a product class." Id. at 296. In or der to qualify for Lanham
Act protection, a mark must either be suggestive, arbitrary,
or fanciful, or must be descriptive with a demonstration of
secondary meaning. See id. at 297. Generic marks receive
no protection; indeed, they are not "trademarks" at all. See
id. at 305.
Under the Lanham Act, stronger marks receive greater
protection. See, e.g., Versa Prods. Co., Inc. v. Bifold Co.
(Mfg.) Ltd., 50 F.3d 189, 203 (3d Cir . 1995) (observing that
stronger marks carry greater recognition, and that therefore
a similar mark is more likely to cause confusion). Although
the conceptual strength of a mark is often associated with
the particular category of "distinctiveness" into which a
mark falls (i.e., arbitrary, suggestive, or descriptive), that is
not the only measure of conceptual strength. This is
because the classification system's primary purpose is to
determine whether the mark is protectable as a trademark
in the first place--that is, to determine whether consumers
_________________________________________________________________
14. The examples are culled from A.J. Canfield Co. v. Honickman, 808
F.2d 291 (3d Cir. 1986), Security Center, Ltd. v. First National Security
Centers, 750 F.2d 1295 (5th Cir. 1985), Douglas Labs. Corp. v. Copper
Tan, Inc., 210 F.2d 453 (2d Cir. 1954), and Wal-Mart Stores, Inc. v.
Samara Bros., 120 S. Ct. 1339 (2000).
32
are likely to perceive the mark as a signifier of origin, rather
than as a mere identification of the type of product. See
A.J. Canfield, 808 F.2d at 296; Banff, Ltd. v. Federated
Dep't Stores, Inc., 841 F.2d 486, 489 (2d Cir. 1988). The
classification of a mark as arbitrary, suggestive, or
descriptive is only secondarily used to deter mine the degree
of protection a mark should receive once protectability has
been established. These two inquiries--whether a mark is,
in fact, a trademark, versus how much protection the mark
should receive--are often identical, but they do not have to
be. See Plus Prods. v. Plus Discount Foods, Inc., 722 F.2d
999, 1005 (2d Cir. 1983) ("Although this classification
system is a helpful tool [for determining strength] . . . it is
not determinative . . . .").
Suggestive or arbitrary marks may, in fact, be "weak"
marks, particularly if they are used in connection with a
number of different products. For instance, in H. Lubovsky,
Inc. v. Esprit de Corp., 627 F. Supp. 483 (S.D.N.Y. 1986),
the court concluded that the mark "Esprit," though
suggestive, was, in fact, a "weak" mark. See id. at 487.
Similarly, common marks like "Arrow," though certainly not
particularly descriptive of the underlying pr oduct, have
been held to be "weak" marks. See Arr ow Distilleries, Inc. v.
Globe Brewing Co., 117 F.2d 347, 351 (4th Cir. 1941). "Self-
laudatory" marks like "Sure," see Procter & Gamble Co. v.
Johnson & Johnson, Inc., 485 F. Supp. 1185, 1196
(S.D.N.Y. 1980), "Super Duper," see S.M. Flickinger Co., Inc.
v. Beatrice Foods Co., 174 U.S.P.Q. 51, 56 (T.T.A.B. 1972),
"Plus," see Plus Prods., 722 F .2d at 1005, or, in this case,
"Miracle," are generally held to be weak marks. See 2
McCarthy, supra, S11:81, at 11-146 to 147.15 Thus, the
classification of a mark as "descriptive" or"arbitrary" for
the purpose of determining whether it r eceives trademark
protection at all--though a useful guide in assessing the
strength or weakness of a mark--is not dispositive. See
Express Servs., Inc. v. Careers Expr ess Staffing Servs., 176
F.3d 183, 186 (3d Cir. 1999) (observing that classification of
distinctiveness is "useful" in determining conceptual
strength (citing Banff, Ltd., 841 F.2d at 491)).
_________________________________________________________________
15. In fact, McCarthy observes that courts often hold self-laudatory
marks to be descriptive. See McCarthy, supra, S 11:17, at 11-22 to 24.
33
The District Court originally determined that the
MIRACLE part of Miraclesuit was fanciful because it does
not describe or reveal anything about the pr oduct. However,
the court believed that the SUIT part was generic because
it merely describes the qualities of the pr oduct. In sum,
taking the mark's parts together, the court concluded that
Miraclesuit "ranges from suggestive to arbitrary" because it
requires some consumer imagination to determine its
meaning, and therefore that the mark should receive the
highest level of protection. A&H IV, 57 F. Supp. 2d at 165.
For reasons we will presently explain, we conclude that
the District Court's categorization of the Miraclesuit mark
was clearly erroneous, and that the ter m Miraclesuit does
not rise to the arbitrary level but is, at best, mer ely
suggestive. Further, we believe that the Court erred as a
matter of law in holding that its categorization of the mark
was dispositive of the inquiry into the mark's str ength.
Because both of these conclusions were r elevant to the
District Court's determination that the mark was entitled to
a high level of protection, we review each separately.
The District Court concluded that the Miraclesuit mark
ranged from "suggestive to arbitrary" because it believed
that the word MIRACLE did not reveal anything about the
product. To the contrary, we believe that both parts of the
mark describe or suggest something about the pr oduct: The
word "suit" has many meanings, but "bathing suit" is a
frequent and familiar one. The word MIRACLE, unlike, say,
XEROX, indicates the effect that the pr oduct is supposed to
have on the user or wearer, and is ultimately merely a
declaration of praise. Just as a "miracleworker" is a person
who works miracles, a "miraclesuit" is a suit that works
miracles. Whether the slimming effect is literally
miraculous may be subject to debate, but the mark itself
communicates something about the product. Suggestive or
descriptive marks are, of course, protected, but, depending
on surrounding circumstances (discussed below), they may
receive lesser protection than arbitrary marks.
We also believe that the District Court committed an
error of law in its automatic conclusion that, because the
Miraclesuit mark "range[d] from suggestive to arbitrary," it
therefore should receive the highest level of protection, thus
34
dismissing efforts by Victoria's Secr et to show that the
Miraclesuit mark is conceptually weaker because MIRACLE
has been used by several other companies. MIRACLE is
used in other apparel markets, such as hosiery, children's
wear, ready-to-wear, and mater nity wear. The court held
that these other uses were irrelevant because the term
MIRACLE was not used specifically in conjunction with
swimwear. See A&H IV, 57 F. Supp. 2d at 165 n.16.
Although the wide use of a term within the market at issue
is more probative than the wide use of a term in other
markets, see Fisons, 30 F.3d at 479, the extensive use of
the term in other markets may also have a weakening effect
on the strength of the mark.
For example, in Sun Banks of Florida, Inc. v. Sun Federal
Savings & Loan Association, 651 F.2d 311, 316-17 & n.8
(5th Cir. 1981), the court gave special weight to the fact
that 25 competing financial institutions used the word
"sun" in their titles, but also noted that over 4,400 Florida
businesses used the term. The Sun Banks court thus
clearly considered extensive use in other markets in its
assessment of the weakness of the contested ter m. See also
Triumph Hosiery Mills, Inc. v. Triumph Int'l Corp., 308 F.2d
196, 199 n.2 (2d Cir. 1962) ("The mark`Triumph' is a so-
called weak mark, i.e. it has been used many times to
identify many types of products and services."). The
relevance of such other uses of similar marks is apparent;
if a consumer is aware that a particular mark, like
"Triumph" or "Ace," is often used to designate a variety of
products made by a variety of manufactur ers, that
consumer will be less likely to assume that in a particular
case, two individual products, both with the mark
"Triumph," come from the same sour ce. See Steve's Ice
Cream v. Steve's Famous Hot Dogs, 3 U.S.P .Q.2d 1477,
1479 (T.T.A.B. 1987) ("[T]he numerous third-party uses [of
Steve's] demonstrate that the purchasing public has
become conditioned to recognize that many businesses . . .
use the term . . . and . . . is able to distinguish between
these businesses based on small distinctions among the
marks."); cf. S.C. Johnson & Son, Inc. v. Johnson, 116 F.2d
427, 430 (2d Cir. 1940) ("When all is said, if a man allows
the good will of his business to become identified with a
surname so common as Johnson, it is fair to impose upon
35
him some of the risk that another Johnson may wish to sell
goods not very far afield. . . .").
A&H notes that in Fisons we stated that"[w]hile other
registrations and uses of Fairway for r elated products and
services would make the mark less strong if they were in
the same market, their use in different markets and for
products and services that are not closely related does not
necessarily undermine Fisons' claim of str ength." 30 F.3d
at 479. We read this sentence to mean no more than it
says, and not, as A&H urges, as a per se rule against
considering the use of the mark in differ ent markets and
for unrelated products. The short of it is that, whatever
category of distinctiveness into which the mark falls, the
multiple uses of MIRACLE in other markets is r elevant to a
determination of A&H's mark's strength.
2. Commercial Strength of the Mark
Turning to the second part of the test, the District Court
determined that the Miraclesuit mark has a high level of
commercial strength. It based its finding on the fact that
A&H had spent so much money on advertising, and that
"their efforts undoubtedly resulted in increased public
recognition." A&H IV, 57 F. Supp. 2d at 165. The court also
noted that A&H's swimwear sales have steadily incr eased.
Taking these two indications of commer cial strength into
account, the District Court concluded that the commercial
strength inquiry weighed in favor of A&H. Although
evidence of money spent does not automatically translate
into consumer recognition, it is clearly r elevant, and hence
the District Court's methodology and conclusion does not
appear to be in error or to involve a misapplication of the
law.
3. Summary
The District Court erred in concluding that the
Miraclesuit mark contained an arbitrary component, and in
concluding that the mark Miraclesuit was conceptually
strong solely on the basis of its categorization. However, if
anything, the District Court's error weighed in A&H's favor
by leading the court to reject evidence that the Miraclesuit
36
mark was weaker than A&H claimed. Therefor e, the District
Court's error does not affect our affir mance of the District
Court's conclusion that there was no likelihood of direct
confusion between Miraclesuit and The Miracle Bra.
C. Product Similarity
In discussing product similarity, the District Court first
noted that although the products were both swimsuits, they
have slightly different functions: The Miraclesuit is
designed and advertised to make the figure appear slim,
whereas The Miracle Bra suit is designed and advertised to
enhance cleavage. However, the court also noted that most
Miraclesuits have bras--some even have cleavage
enhancing bras--and that a few Miracle Bra suits have
lower body control. A review of these facts led the District
Court to conclude that the Miraclesuit and Miracle Bra
suits were "somewhat interchangeable." A&H IV, 57 F.
Supp. 2d at 170. Therefore, it concluded, the product
similarity factor favored A&H.
Given the evidence that, although both products may
have a primary bust or midriff focus, both pr oducts also
have attributes that enhance both aspects of the female
figure, we do not think that the District Court clearly erred
in making this finding. Furthermore, there was evidence
that both products pitch themselves as "impr oving" female
shapeliness through swimwear, and although the means of
improvement are different and the products have different
foci, the two suits are similar. In sum, while the products
are not identical, the court committed no err or of law here,
and its conclusion on product similarity is supported by the
record.
D. Marketing and Advertising Channels
The District Court concluded that the channels of sale
and advertising of the products overlap. It noted that both
the price range for the suits and their means of sale are
similar. It observed that the Miraclesuit has been advertised
in in-store promotions, magazines, department store bill
enclosures, and press kits to buyers, editors, and
publishers, and that The Miracle Bra suits have been
37
marketed in point-of-sale promotions in V ictoria's Secret
stores, and through press kits and print and television
advertising. The court held that the channels of trade were
similar, in that Miraclesuit is sold to department stores and
catalogues that compete with Victoria's Secr et Stores and
Victoria's Secret Catalogue. Although the court noted that
The Miracle Bra suits are never sold outside of the
Victoria's Secret store or catalogue, and that "[s]uch fine
distinctions between the channels in which the pr oducts
are sold may weigh in favor of diminishing a likelihood of
confusion," A&H IV, 57 F. Supp. 2d at at 171, it concluded
that the "conditions of purchase" wer e similar, and weighed
this factor in favor of A&H.
Although there are significant dif ferences in trade
channels--notably, that Victoria's Secr et sells its product
only in its own stores and catalogues--per fect parallelism
will rarely be found. Furthermore, the Miraclesuit has twice
been sold in Victoria's Secret catalogues. Thus, the District
Court did not clearly err in its factual conclusion that
channels of marketing and advertising weigh in favor of
A&H.
E. Sophistication of Consumers
The District Court next considered the "sophistication of
consumers," which is the functional equivalent of Lapp
factor (3), "the price of the goods and other factors
indicative of the care and attention expected of consumers
when making a purchase." The court concluded that the
products' consumers were likely to be sophisticated, and
weighed this factor in favor of the defendants. Thr ee
considerations drove this decision. The court r elied on
cases holding that buyers of women's apparel ar e
sophisticated purchasers, and on the fact that A&H had
presented no evidence that its consumers wer e not
sophisticated. The court also noted that the "entire
success" of each brand "relies on the pr emise that
consumers will discern the slimming ef fect and cleavage
enhancement features of their respective swimsuits." A&H
IV, 57 F. Supp. 2d at 172.
A&H submits that the District Court erred in r eaching
this conclusion. It points to Victoria's Secr et's admission
38
during this litigation that the attention of consumers must
be captured within a few seconds. See A&H II, 967 F. Supp.
at 1466. However, there are no har d and fast rules for this
determination, and the celerity with which one makes a
decision does not correlate exactly with the extent of one's
discrimination in matters of taste. The District Court's
conclusion that consumers will be discriminating in their
selection of swimwear, whether one-piece or bikinis, rings
especially true. We find no error in the District Court's
conclusion that this factor weighs in favor of V ictoria's
Secret.
F. The Intent of the Defendant
Before discussing this factor, it is important to reiterate
the purpose of the "intent" inquiry in the Lapp analysis.
Intent is relevant to the extent that it bears on the
likelihood of confusion. We have held that a defendant's
mere intent to copy, without more, is not sufficiently
probative of the defendant's success in causing confusion to
weigh such a finding in the plaintiff 's favor; rather,
defendant's intent will indicate a likelihood of confusion
only if an intent to confuse consumers is demonstrated via
purposeful manipulation of the junior mark to r esemble the
senior's. See Versa Prods. Co., Inc. v. Bifold Co. (Mfg.) Ltd.,
50 F.3d 189, 205-06 (3d Cir. 1995). 16 Courts' willingness to
infer the efficacy of an intent to confuse is thus somewhat
punitive, due in part to a willingness to believe that a closer
nexus exists between an intent to deceive and success in
that effort than exists between an intent to copy and
success in causing confusion. See id. at 205-07. Some
degree of bad faith is also relevant to the selection of an
appropriate remedy. See A&H III, 166 F.3d at 208-09.
The District Court found that Victoria's Secr et had not
intended to confuse customers when it began using The
_________________________________________________________________
16. In fact, as has been recognized in the trade dress context, copying,
absent an intent to confuse, might do no mor e than signal to potential
consumers that the junior user's product is in direct competition with
the senior user's product. Such copying might thus serve a valuable
communicative function. See Conopco, Inc. v. May Dep't Stores Co., 46
F.3d 1556, 1565 (Fed. Cir. 1994).
39
Miracle Bra in conjunction with its swimwear line. The
record supports the conclusion that V ictoria's Secret
brought the mark into swimwear because of its success in
lingerie. The court thus properly found that V ictoria's
Secret had not expanded The Miracle Bra into swimwear in
an effort to ride on A&H's good name.
A&H argues that the court should have weighed the
intent factor in its favor because when The Miracle Bra was
registered for lingerie, Victoria's Secret's counsel learned
that there were several pre-existing MIRACLE marks,
including A&H's Miraclesuit. However, the court credited
evidence that in 1994, when Victoria's Secr et attempted to
register The Miracle Bra for "swimsuits, bathing suits and
bikinis," Victoria's Secret Stor es assumed that its original
trademark search had uncovered no confusingly similar
registrations. See A&H IV, 57 F .Supp. 2d at 173. The court
also credited the evidence that no one at V ictoria's Secret
Stores responsible for the expansion of The Miracle Bra to
swimwear had ever heard of the Miraclesuit or knew that
Victoria's Secret Catalogue had ever sold Miraclesuits.
Further, the court found that Victoria's Secret Catalogue
had chosen to expand the mark into swimwear for
"legitimate reasons." Id. The PTO attorney's denial of
registration occurred after this suit had been filed. See id.
The District Court held, therefore, that it was "entirely
credible" that no one at Victoria's Secret Stores knew about
Miraclesuit and that "[a]t best, this lack of communication
was a result of bureaucratic carelessness and was not
intentionally done for the purpose of profiting from the
notoriety of Plaintiffs' Miraclesuit mark." Id. at 173-74. We
discern no clear error or misapplication of law in these
findings, or in the District Court's weighing of the intent
factor in Victoria's Secret's favor .
G. Actual Confusion
The District Court found that, although ther e was some
evidence of actual confusion, that evidence was insufficient
to permit weighing this factor in A&H's favor . A&H
produced an article in Women's W ear Daily mentioning "the
introduction of the Miracle Swimsuit in the upcoming
Victoria's Secret Catalog." A&H IV, 57 F. Supp. 2d at 174.
40
An A&H sales agent testified that a professional swimwear
buyer asked him if A&H carried The Miracle Bra swimsuit;
that a professional swimwear representative asked if the
two were related; that a former buyer asked if the
Miraclesuit had that push-up element she had hear d so
much about; and that a buyer asked him for an
appointment to see The Miracle Bra line. See id. A&H also
presented testimony that one of its own public relations
agents thought that A&H made both Miraclesuit and The
Miracle Bra; that a buyer stated that she had hear d of the
Miraclesuit as a suit that enhanced the bust; and that an
A&H receptionist had received two inquiries concerning The
Miracle Bra. See id.
The District Court, while not explicitly discr editing this
evidence, viewed it with great skepticism, given the
interested sources and the inability to cr oss-examine the
supposedly confused individuals.17 Furthermore, it
concluded that, even if it credited all the submissions, the
evidence of actual confusion was isolated and idiosyncratic.
See id. at 175. This decision is supported by the case law.
"Ownership of a trademark does not guarantee total
absence of confusion in the marketplace. Selection of a
mark with a common surname naturally entails a risk of
some uncertainty and the law will not assure absolute
protection." Scott Paper Co. v. Scott's Liquid Gold, Inc., 589
F.2d 1225, 1231 (3d Cir. 1978). Although some cases hold
that, given the difficulty of proving actual confusion,
relatively little showing on the part of the plaintiffs is
required, see, e.g., World Carpets, Inc. v. Dick Littrell's New
World Carpets, 438 F.2d 482, 489 (5th Cir. 1971), other
cases warn against using isolated instances of confusion to
buttress a claim, see, e.g., Amstar Corp. v. Domino's Pizza,
Inc., 615 F.2d 252, 263 (5th Cir. 1980). It is within the
District Court's discretion to consider the facts, and weigh
them. In our view, the District Court's conclusion as to the
absence of actual confusion was supported by the r ecord,
and hence we will not disturb its decision to weigh this
factor in favor of Victoria's Secret.
_________________________________________________________________
17. The court also chose not to credit the surveys conducted by either
side, a decision that has not been challenged.
41
H. Combining the Factors
As the foregoing discussion demonstrates, the District
Court carefully considered the relevant factors weighing for
and against a finding of likelihood of confusion. Most
importantly, the court determined that, although the overall
commercial impressions of the marks ar e only "somewhat
distinct" if one looks just to sight, sound, and meaning, the
fact that Victoria's Secret uses a housemark and a
disclaimer tips the balance and makes this factor , the
similarity of the marks themselves, weigh in favor of
Victoria's Secret. This factor was essential to the District
Court's ultimate finding of fact; it found that"solely" on the
assumption that the disclaimer would continue to be used,
the marks were not similar. As to the other factors, the
court found that: (1) the products; and (2) the channels of
marketing were sufficiently similar to weigh those factors in
favor of A&H, but that: (3) the consumers wer e
sophisticated; (4) Victoria's Secret exhibited no culpable
intent in selecting its mark; and (5) there was insufficient
credible evidence of instances of actual confusion, all of
which weighed in favor of Victoria's Secr et. We find no
reason to disturb any of these findings. Finally, the court
also concluded that the mark Miraclesuit merited a high
level of protection, and weighed this factor in favor of A&H.
Though we believe that the District Court could have been
more emphatic in its finding that the marks were
dissimilar, and may also have overrated the strength of the
Miraclesuit mark, these factors only support our affirmance
of the ultimate conclusion that the marks ar e not likely to
be directly confused.
Although a number of factors favored A&H, these do not
upset the balance. In sum, we find no error in the District
Court's careful consideration and weighing of the factors,
and its use of them as tools in reaching its ultimate finding
of fact. We therefore will affir m the judgment with respect
to the direct confusion claim.
V. The Reverse Confusion Claim
A. Introduction
We recently recognized the doctrine of "reverse confusion"
as a distinct basis for a claim under S 43(a) of the Lanham
42
Act. See Fisons, 30 F.3d at 475. While the essence of a
direct confusion claim is that a junior user of a mark is
said to free-ride on the "reputation and good will of the
senior user by adopting a similar or identical mark," id.,
reverse confusion occurs when "the junior user saturates
the market with a similar trademark and overwhelms the
senior user." Id. (quoting Ameritech, Inc. v. American Info.
Techs. Corp., 811 F.2d 960, 964 (6th Cir. 1987)). The harm
flowing from reverse confusion is that
[t]he public comes to assume the senior user's
products are really the junior user's or that the former
has become somehow connected to the latter. .. . [T]he
senior user loses the value of the trademark--its
product identity, corporate identity, contr ol over its
goodwill and reputation, and ability to move into new
markets.
Ameritech, Inc., 811 F.2d at 964; see also Fisons, 30 F. 3d
at 479; Sands, Taylor & Wood Co. v. Quaker Oats Co., 978
F.2d 947, 957 (7th Cir. 1992); Banff, Ltd. v. Federated Dep't
Stores, Inc., 841 F.2d 486, 490-91 (2d Cir. 1988); Capital
Films Corp. v. Charles Fries Prods, Inc., 628 F.2d 387, 393
(5th Cir. 1980); Big O Tire Dealers, Inc., v. Goodyear Tire &
Rubber Co., 561 F.2d 1365, 1372 (10th Cir . 1977). As we
explained in Fisons, reverse confusion protects "smaller
senior users . . . against larger, mor e powerful companies
who want to use identical or confusingly similar
trademarks." 30 F.3d at 475. Absent r everse confusion, "a
company with a well established trade name and with the
economic power to advertise extensively [would be
immunized from suit] for a product name taken from a
competitor." Big O Tire Dealers, Inc., 561 F.2d at 1372
(citation omitted).
The doctrine of reverse confusion--or , at least, some of its
applications--is not without its critics. See, e.g., Thad G.
Long & Alfred M. Marks, Reverse Confusion: Fundamentals
and Limits, 84 Trademark Rep. 1, 2-3 (1994); Daniel D.
Domenico, Note, Mark Madness: How Brent Musburger and
the Miracle Bra May Have Led to a More Equitable and
Efficient Understanding of the Reverse Confusion Doctrine in
Trademark Law, 86 Va. L. Rev. 597, 613-14, 621-24 (2000).18
_________________________________________________________________
18. The Domenico note analyzes, inter alia , the propriety of the remedy
awarded by the District Court in A&H II.
43
The chief danger inherent in recognizing r everse confusion
claims is that innovative junior users, who have invested
heavily in promoting a particular mark, will suddenly find
their use of the mark blocked by plaintiffs who have not
invested in, or promoted, their own marks. See Weiner King,
Inc. v. Wiener King Corp., 615 F.2d 512, 522 (C.C.P.A.
1980). Further, an overly-vigorous use of the doctrine of
reverse confusion could potentially inhibit lar ger companies
with established marks from expanding their pr oduct lines
--for instance, had Victoria's Secr et thought, at the outset,
that it would not be permitted carry over its popular The
Miracle Bra mark from lingerie to swimwear , it might have
chosen not to enter the swimsuit market at all.
This would be an undesirable result; in fact, it is
precisely to allow a certain amount of "space" for companies
to expand their product lines under established marks that
we allow infringement suits against suppliers of
noncompeting goods. See Interpace Corp. v. Lapp, Inc., 721
F.2d 460, 464 (3d Cir. 1983). This is not to say that the
reverse confusion doctrine does not have its pr oper place;
as has been recognized, without the existence of such a
claim, smaller business owners might not have any
incentive to invest in their marks at all, for fear the mark
could be usurped at will by a larger competitor. See SK&F,
Co. v. Premo Pharm. Labs., Inc., 625 F.2d 1055, 1067 (3d
Cir. 1980) ("[P]ermitting piracy of . . . identifying trade dress
can only discourage other manufacturers fr om making a
similar individual promotional effort."). However, these
concerns do sensitize us to the potential untoward effects
of an overenthusiastic enforcement of r everse confusion
claims, although they cannot supersede our judicial
recognition of the doctrine.
B. The Test for Reverse Confusion
As in a direct confusion claim, the ultimate question in a
reverse confusion claim is whether ther e is a likelihood of
consumer confusion as to the source or sponsorship of a
product. See Fisons, 30 F.3d at 475. Although it would
seem somewhat counterintuitive to posit that the likelihood
of confusion analysis changes from the dir ect confusion to
44
the reverse confusion context,19 there are differences
between the two situations that bear mentioning. Therefore,
to clarify the test for reverse confusion that has developed
in our jurisprudence, we will walk through the factors that
a district court should consider (where r elevant) in
assessing a such a claim.
1. The Factors that are the Same
As an initial matter, there are several factors that should
generally be analyzed in the same way for a r everse
confusion claim as they are for a direct confusion claim.20
First, the attentiveness of consumers does not change
(factor (3)); in both direct and reverse confusion, the
question is whether this is the kind of product that
consumers will care enough about to notice the differences,
or purchase hastily with only a limited impr ession. See
Fisons, 30 F.3d at 476 n.12 (considering this factor in the
same manner as it would for direct confusion). Second, and
similarly, the degree to which the channels of trade and
advertisement overlap (factor (7)) should be analyzed in the
same fashion. See id. at 475-76 (analyzing the channels of
trade in the same manner). Finally, Lapp factors (8) and (9),
considering the similarity of the targets of the parties' sales
efforts and the similarity of products, are also analyzed no
differently in the reverse confusion context. See id. at 475,
481 (treating these factors in the same way for reverse
confusion as they would have been treated for direct
confusion).
_________________________________________________________________
19. Indeed, some courts have simply inquir ed whether there exists a
likelihood of confusion between the marks, temporarily putting aside the
distinction between "direct" or "r everse" confusion until after such a
likelihood has been demonstrated. See Americana Trading Inc. v. Russ
Berrie & Co., 966 F.2d 1284, 1290 (9th Cir. 1992) (reversing district
court grant of summary judgment to defendants, on the ground that
plaintiffs had put forth enough evidence of"confusion"--some direct,
some reverse--to create a genuine issue of material fact).
20. We say "generally" only because we recognize that there may be
unforeseen circumstances in which these factors actually do apply
differently in the reverse confusion context.
45
2. Similarity of the Marks
Generally speaking, the similarity of the marks
themselves is necessarily analyzed in the same way in
direct and reverse confusion claims; the court looks to
sight, sound, and meaning, and compares whether these
elements combine to create a general commer cial
impression that is the same for the two marks. See, e.g.,
Fisons, 30 F.3d at 478-79 (analyzing the commercial
impression of the marks in light of dir ect confusion
principles). Therefore, a district court would not need to
examine these in a different manner than it would in a
direct confusion claim.
On the other hand, the direct confusion claim in this
case was rejected by the District Court in considerable
measure because the court felt that the V ictoria's Secret
housemark, coupled with the disclaimer, alleviated any
confusion that might otherwise result. See A&H IV, 57 F.
Supp. 2d at 168-69. Yet in the reverse confusion context,
the presence of housemarks or disclaimers must obviously
be treated differently than in the direct confusion context.
It is the essence of the reverse confusion claim that, when
consumers come across the Miraclesuit in the stream of
commerce, they will confuse it with The Miracle Bra and
think that it is a Victoria's Secret pr oduct. Therefore, the
weight of a disclaimer on the Victoria's Secr et product is
necessarily lessened. Because A&H puts no disclaimer on
its product to distinguish it from The Miracle Bra, the
consumer considering a purchase of the Miraclesuit will not
have the same handy reminder that Miraclesuit is not
associated with The Miracle Bra or Victoria's Secret. This is
not to say that such a disclaimer may not, in fact, mitigate
confusion in some cases; if consumers are faced with the
disclaimer every time they flip through the V ictoria's Secret
catalogue, they are less likely to forget that Miraclesuit is
unrelated to The Miracle Bra swimwear.
As to the presence of the housemark on the V ictoria's
Secret product, not only is there the possibility that
consumers will fail to remember the mark when
encountering A&H's swimwear, but ther e is also the
possibility that the mark will aggravate, rather than
mitigate, reverse confusion, by reinfor cing the association of
46
the word "miracle" exclusively with V ictoria's Secret. See,
e.g., Sands, Taylor & Wood Co. v. Quaker Oats Co., 978
F.2d 947, 960 (7th Cir. 1992); Americana Trading Inc. v.
Russ Berrie & Co., 966 F.2d 1284, 1288 (9th Cir. 1992). Of
course, we do not suggest that this actually occurr ed in
this particular case; after all, the District Court observed
that A&H typically includes its own housemark on
Miraclesuits, see A&H IV, 57 F. Supp. 2d at 160, but,
because the court only conducted a likelihood of confusion
analysis for the direct confusion claim, it only briefly
addressed the significance of the A&H housemark, see id.
at 168 n.17.
Clearly, the proper significance to be accor ded these facts
is a matter best suited for the determination of the trial
court. Instead, we merely highlight the questions raised by
the use of the housemarks and disclaimers in or der to
emphasize that a district court must separately examine
the similarity factor to determine whether there are any
aspects of the analysis that should be differ ent for a reverse
confusion claim, and, if so, alter its examination
accordingly.
3. Strength of the Marks
An important difference between r everse and direct
confusion manifests in the analysis of the str ength of the
marks. As we explained supra, this factor r equires
consideration both of the mark's commercial and
conceptual strength. For ease of understanding, we will
explain the appropriate treatment of commercial strength
first, and the treatment of conceptual str ength second.
a. Commercial Strength
It has been observed that a consumer first encountering
a mark with one set of goods is likely to continue to
associate the mark with those goods, and whether any
subsequent confusion is "direct" or "r everse" will depend on
whether the consumer's first experience was with the junior
or the senior user of the mark. See Banf f, Ltd. v. Federated
Dep't Stores, Inc., 841 F.2d 486, 490 (2d Cir. 1988)
(acknowledging such a possibility); Long & Marks, supra, at
47
5. The greater the commercial disparity between the
manufacturers, the more likely it is that a consumer's first
experience with a mark will be with one particular
manufacturer. That is, if one manufactur er--junior or
senior--expends tremendous sums in advertising while the
other does not, consumers will be more likely to encounter
the heavily advertised mark first. Where the greater
advertising originates from the senior user , we are more
likely to see a case of direct confusion; if the greater
advertising originates from the junior user , reverse
confusion is more likely. See 3 McCarthy, supra, S23:10, at
23-32; cf. Fisons, 30 F.3d at 479 (observing that direct
confusion involves a junior user "trad[ing] on" a senior
user's name and thus expending less on advertising,
whereas reverse confusion involves the opposite pattern).
Logically, then, in a direct confusion claim, a plaintiff
with a commercially strong mark is mor e likely to prevail
than a plaintiff with a commercially weak mark.
Conversely, in a reverse confusion claim, a plaintiff with a
commercially weak mark is more likely to prevail than a
plaintiff with a stronger mark, and this is particularly true
when the plaintiff 's weaker mark is pitted against a
defendant with a far stronger mark. McCarthy has written
that "the relatively large advertising and promotion of the
junior user . . . is the hallmark of a r everse confusion case."
3 McCarthy, supra, S23:10, at 23-37."[T]he lack of
commercial strength of the smaller senior user's mark is to
be given less weight in the analysis because it is the
strength of the larger, junior user's mark which results in
reverse confusion." Commerce Nat'l Ins. Servs., Inc. v.
Commerce Ins. Agency, Inc., 214 F.3d 432, 444 (3d Cir.
2000). As we explained in Fisons, "the evidence of
commercial strength is differ ent from what we expect in a
case of forward confusion, where the junior user tries to
palm off his goods as those of the senior user ." 30 F.3d at
479.
Therefore, in a reverse confusion claim, a court should
analyze the "commercial strength" factor in terms of (1) the
commercial strength of the junior user as compared to the
senior user; and (2) any advertising or marketing campaign
by the junior user that has resulted in a saturation in the
48
public awareness of the junior user's mark. See Fisons, 30
F.3d at 474, 479.
b. Distinctiveness or Conceptual Strength
In Fisons we remanded the case for the district court to
"reevaluate[ ] . . . distinctiveness as well as [the mark's]
commercial strength" for the reverse confusion claim.
Fisons, 30 F.3d at 479. Although we explained that the
evaluation of commercial strength would have to be altered
for reverse confusion claims, we did not discuss how
distinctiveness, or conceptual strength, should be re-
weighed in light of our adoption of the reverse confusion
doctrine. Nor did we clarify this aspect of our jurisprudence
in Commerce National Insurance Services, Inc. v. Commerce
Insurance Agency, Inc., 214 F.3d 432 (3d Cir. 2000), where
we referred to the different test for "commercial strength,"
in a reverse confusion context, without r eference to
"conceptual strength."
As stated above, in the paradigmatic reverse confusion
case, the senior user has a commercially weak mark when
compared with the junior user's commercially strong mark.
When it comes to conceptual strength, however , we believe
that, just as in direct confusion cases, a str ong mark
should weigh in favor of a senior user. Our decision is
supported by the fact that those courts that have clearly
distinguished conceptual from commercial strength in the
reverse confusion context have weighed a conceptually
strong mark in the senior user's favor, in the same manner
as they would in direct confusion cases. See, e.g.,
Worthington Foods, Inc. v. Kellogg Co., 732 F. Supp. 1417,
1456 (S.D. Ohio 1990).
In H. Lubovsky, Inc. v. Esprit de Corp., 627 F. Supp. 483
(S.D.N.Y. 1986), the court explained that conceptual
distinctiveness was relevant in the same way for a reverse
confusion claim because "if a customer saw a doll in a toy
store bearing a strong familiar trademark like `Exxon,' he
might well assume that the oil company had gone into the
toy business; if, on the other hand, he saw a doll bearing
a familiar but weak laudatory trademark like Merit, he
would be unlikely to assume that it is connected with the
49
similarly named gasoline or cigarettes." Id. at 487; see also
Long & Marks, supra, at 22.
The H. Lubovsky logic resonates, for it makes more sense
to hold that conceptual strength, unlike commer cial
strength, works in the plaintiff 's favor. That is, if we were
to apply the rule stated above for commercial strength, i.e.,
weighing weakness in the plaintiff 's favor , we would bring
about the perverse result that less imaginative marks would
be more likely to win reverse confusion claims than
arbitrary or fanciful ones. We therefor e hold that, as in
direct confusion claims, a district court should weigh a
conceptually strong mark in the plaintif f 's favor,
particularly when the mark is of such a distinctive
character that, coupled with the relative similarity of the
plaintiff 's and defendant's marks, a consumer viewing the
plaintiff 's product is likely to assume that such a mark
would only have been adopted by a single sour ce--i.e., the
defendant.
4. The Intent of the Defendant
In the direct confusion context, the intent of the
defendant is relevant to the extent that it bears on the
likelihood of confusion analysis. As we have said:
In the likelihood of confusion inquiry . . . we do not
focus on a defendant's bare intent to adopt a mark . . .
substantially identical to a plaintiff 's mark . . . , since
there is little basis in fact or logic for supposing from
a defendant's intent to copy without more that the
defendant's actions will in fact result in confusion.
Thus, what we have held is that a defendant's intent to
confuse or deceive consumers as to the product's
source may be highly probative of likelihood of
confusion.
Versa Prods. Co., Inc. v. Bifold Co. (Mfg.) Ltd., 50 F.3d 189,
205 (3d Cir. 1995) (emphasis omitted).
When reverse, rather than direct, confusion is alleged,
"intent to confuse," is unlikely to be pr esent. Cf. Fisons, 30
F.3d at 480. However, though per haps unusual, should an
intent to confuse exist, it would be relevant to the likelihood
50
of confusion analysis in the same manner as it would for a
direct confusion claim. For instance, in Commerce National
Insurance Services, Inc. v. Commerce Insurance Agency, Inc.,
214 F.3d 432 (3d Cir. 2000), we wer e confronted with a
situation in which the litigants had used very similar marks
in noncompetitive industries for a number of years, each
fully aware of the other and with no incidents of actual
confusion. Eventually, however, the lar ger company
expanded into the smaller company's line of business,
deliberately choosing to promote its services under an
almost identical mark. In holding that the smaller company
could maintain its claim against the larger for reverse
confusion, we specifically highlighted the possibility that
the larger company had adopted the mark with the
deliberate intent of pushing its rival out of the market, and
that it was this sort of usurpation of business identity that
the reverse confusion doctrine was designed to prevent. See
id. at 445.
As we have noted in our two prior cases on this issue,
the defendant's intent may be discovered thr ough such
inquiries as whether the defendant was aware of the senior
user's mark when it adopted its own mark, and whether the
defendant considered that its adoption of the mark might
result in confusion. See id. at 444; Fisons, 30 F.3d at 480.
If such an intent to confuse does, in fact, exist in a reverse
confusion case, it should weigh against the defendant in
the same manner as it would in a direct confusion case. Cf.
W.W.W. Pharm. Co., Inc. v. Gilette Co., 984 F.2d 567, 575
(2d Cir. 1993) (weighing the "intent" factor in a reverse
confusion case in the defendant's favor because the plaintiff
had not demonstrated an intent to confuse).
Although we recognize that our opinion in Fisons perhaps
implied that mere carelessness, as opposed to deliberate
intent to confuse, would weigh in a plaintif f 's favor in a
reverse confusion case, we are reluctant to adopt such an
interpretation, as it would be manifestly out of step with
our prior holdings regarding the r elevance of "intent" in
trademark infringement claims. Cf. O. Hommel Co. v. Ferro
Corp., 659 F.2d 340, 354 (3d Cir. 1981). Ultimately, all of
the Lapp factors are meant only to determine whether
confusion is likely; mere carelessness, like deliberate
51
copying, does not shed any light on this inquiry. Further, to
the extent that the intent inquiry in the likelihood of
confusion analysis carries with it the attribution of fault,
there is no reason to ascribe higher penalties to a lower
degree of fault because a particular case involves reverse,
rather than direct, confusion. Finally, in light of the policy
concerns implicated by the reverse confusion doctrine, it
would be troubling indeed to hold that a lesser degree of
culpability would weigh in the plaintiff 's favor for a reverse
confusion claim than it would for a direct confusion claim.
5. Factors Relating to Actual Confusion
As a matter of intuition, one would expect that in a
reverse confusion claim, evidence of actual confusion would
be as important as in a direct confusion claim, though the
nature of the confusion that would be pr obative would be
quite different. See Lang v. Retir ement Living Publ'g Co.,
949 F.2d 576, 583 (2d Cir. 1991) (holding that evidence of
"actual confusion" in which the public thought the senior
user was the origin of the junior user's products was
irrelevant for a reverse confusion claim). As applied to this
case, for example, evidence that consumers thought that
The Miracle Bra was an A&H product would be pr obative
on a direct confusion claim, but not on a r everse confusion
claim. Conversely, evidence that consumers thought that
Miraclesuit was a Victoria's Secret pr oduct would support a
reverse confusion claim, but not a direct confusion claim.
This was apparently the District Court's intuition; although
it declined to consider A&H's reverse confusion claim, it did
observe that most of the evidence A&H had put forth with
regard to "actual confusion" r elated to direct, rather than
reverse, confusion. See A&H IV, 57 F . Supp. 2d at 178
n.32.
However, marshalling evidence of actual confusion is
often difficult. See, e.g., Liquid Glass Enters., Inc. v. Dr. Ing.
h.c.F. Porsche AG, 8 F. Supp. 2d 398, 403 (D.N.J. 1998). In
our view, if we were to create a rigid division between
"direct" and "reverse" confusion evidence, we would run the
risk of denying recovery to meritorious plaintiffs. For
example, if a plaintiff alleged theories of both direct and
reverse confusion and was able to prove a few instances of
52
"actual" confusion in each direction, we might conclude
that the plaintiff did not have enough evidence of either
type to succeed on either of its claims, even though, taken
together, all of the evidence of actual confusion would be
probative of a real problem. As we explained in Part V.B.3,
supra, the manifestation of consumer confusion as "direct"
or "reverse" may merely be a function of the context in
which the consumer first encountered the mark. Isolated
instances of "direct" confusion may occur in a reverse
confusion case, and vice-versa. See Long & Marks, supra,
at 5. Though we might expect that, in most instances, the
consumer's first encounter will be with the mark that has
greater commercial strength, this will not invariably be the
case.
Given the problems litigants typically encounter in
locating evidence of actual confusion, then, we decline to
create a strict bar to the use of "dir ect" confusion evidence
in a "reverse" confusion case, or vice versa. However,
evidence working in the same direction as the claim is
preferred, and "misfitting" evidence must be treated
carefully, for large amounts of one type of confusion in a
claim for a different type may in fact work against the
plaintiff. For instance, the existence of r everse confusion
might disprove a plaintiff 's claim that its descriptive mark
has secondary meaning, thus resulting in no r ecovery at
all. See Jefferson Home Furnitur e Co, Inc. v. Jefferson
Furniture Co., Inc., 349 So.2d 5, 8 (Ala. 1977).
It follows that the other factor relating to actual
confusion, Lapp factor (4), examining the time the mark has
been used without evidence of actual confusion, should be
approached similarly.
6. Other Relevant Facts
The final factor of the Lapp test dir ects courts to look at
"other facts suggesting that the consuming public might
expect the prior owner to manufacture both pr oducts, or
expect the prior owner to manufacture a pr oduct in the
defendant's market, or expect that the prior owner is likely
to expand into the defendant's market." This factor is
necessarily transformed in the reverse confusion context to
53
an examination of other facts suggesting that the
consuming public might expect the larger , more powerful
company to manufacture both products, or expect the
larger company to manufacture a pr oduct in the plaintiff 's
market, or expect that the larger company is likely to
expand into the plaintiff 's market. See Fisons, 30 F.3d at
480 (directing the district court to examine facts suggesting
that the public might think that the junior user would
expand into the senior user's market).
7. Summary of the Test for Reverse Confusion
In sum, in the typical case in which there is a claim of
reverse confusion, a court should examine the following
factors as aids in its determination whether or not there is
a likelihood of such confusion:
(1) the degree of similarity between the owner's mark
and the alleged infringing mark;
(2) the strength of the two marks, weighing both a
commercially strong junior user's mark and a
conceptually strong senior user's mark in the senior
user's favor;
(3) the price of the goods and other factors indicative of
the care and attention expected of consumers when
making a purchase;
(4) the length of time the defendant has used the mark
without evidence of actual confusion arising;
(5) the intent of the defendant in adopting the mark;
(6) the evidence of actual confusion;
(7) whether the goods, competing or not competing, are
marketed through the same channels of trade and
advertised through the same media;
(8) the extent to which the targets of the parties' sales
efforts are the same;
(9) the relationship of the goods in the minds of
consumers, whether because of the near-identity of the
products, the similarity of function, or other factors;
54
(10) other facts suggesting that the consuming public
might expect the larger, more powerful company to
manufacture both products, or expect the larger
company to manufacture a product in the plaintiff 's
market, or expect that the larger company is likely to
expand into the plaintiff 's market.
As with the test for direct confusion, no one factor is
dispositive, and in individual cases, particular factors may
not be probative on the issue of likelihood of confusion.
"The weight given to each factor in the overall picture, as
well as its weighing for plaintiff or defendant, must be done
on an individual fact-specific basis." Fisons, 30 F.3d at 476
n.11.
C. The District Court's Opinion
The District Court approached the reverse confusion
claim in a different manner from that described in the
foregoing section. It held that befor e engaging the reverse
confusion factors, A&H needed to demonstrate, as a
threshold matter, that Victoria's Secret "used their
economic power to overwhelm the market with advertising"
of their product. A&H IV, 57 F.Supp. 2d at 178. The
opinion therefore focused only on a comparison between
the commercial strengths of the Miraclesuit and The
Miracle Bra, i.e., only on one aspect of the "mark strength"
inquiry. The District Court found that Victoria's Secret had
saturated the market with $13 million in The Miracle Bra
advertising, and that a "meaningful portion" of the
advertising went towards promoting The Miracle Bra
swimwear. It then compared Victoria's Secret's effort to
A&H's effort to promote Miraclesuit swimwear; A&H spent
over $1.2 million on advertising, and received $1.5 million
in free publicity.21
The court noted that A&H did not dispute--even heralded
--the fact that its campaign was widely successful.
Therefore, it found that "[p]laintiffs' [sic] are not entirely
_________________________________________________________________
21. This finding is significant because A&H contends that the court erred
in considering A&H's free publicity, but not considering whether
Victoria's Secret received the same, as is discussed in Part V.D.3, infra.
55
without market power in the swimwear industry" and that
"[i]n light of Plaintiffs' advertising campaign, we find that, in
comparison, Defendants did not saturate the marketplace
with its advertising to promote The Miracle Bra swimwear."
Id. at 177. Consequently, the District Court concluded that
the doctrine of reverse confusion was not even implicated,
and "decline[d] to examine whether a likelihood of reverse
confusion exists." Id. at 178.
In A&H III, we began our discussion of r everse confusion
with an explanation of the phenomenon: "Reverse confusion
occurs when a larger more powerful company uses the
trademark of a smaller, less powerful senior owner and
thereby causes likely confusion as to the sour ce of the
senior user's goods or services." 166 F.3d at 207 (quoting
Fisons, 30 F.3d at 474.). In Fisons , we stated that it would
be necessary to recognize the reverse confusion doctrine to
provide protection to "smaller, senior users" against "larger,
more powerful companies." 30 F .3d at 475. While these are
accurate statements about the doctrine of reverse
confusion, the District Court appears to have interpreted
them as establishing a separate, threshold step that must
be examined prior to engaging the Lapp test, and, finding
the threshold not met, concluded that A&H's power to
advertise extensively precluded it from bringing a reverse
confusion claim. The District Court was corr ect to note that
commercial disparity is, in fact, a factor to consider (factor
(2), to be specific); however, it err ed in applying a threshold
commercial disparity requirement, in effect making this
sole factor determinative and treating the reverse confusion
inquiry as requiring a two-step process.
The quoted statements are understandably confusing,
and the method of applying the doctrine of r everse
confusion is admittedly still developing. However , a close
examination of Fisons, from which the quotes hail, reveals
that they are nothing more than descriptions of the
phenomenon of reverse confusion, and do not establish an
initial inquiry that a court needs to make in or der to apply
the reverse confusion analysis. In Fisons we held that the
Lapp factors constitute the method courts should use in
order to determine if a likelihood of r everse confusion
exists. We made no mention of a threshold requirement,
nor did we direct the District Court, on r emand, to use one.
56
The District Court further explained its choice not to
apply the reverse confusion factors by r eference to the fact
that several reverse confusion cases involve enormous
junior companies pitted against tiny senior companies; it
cited these cases and concluded that the same degr ee of
economic disparity was non-existent in this case. See A&H
IV, 57 F. Supp. 2d at 178. The difficulty with this
conclusion is that in Fisons itself, in which we found a
viable reverse confusion claim, Fisons had fully 25% of the
peat moss market, greater than A&H's 10% of the
swimwear market. This suggests that a company need not
be all that weak within its market in order to bring a viable
reverse confusion claim. See Fisons, 30 F.3d at 479; see
also Fuji Photo Film v. Shinohara Shoji Kabushiki , 754 F.2d
591 (5th Cir. 1985) (finding a viable r everse confusion claim
where the plaintiff had spent millions of dollars). In fact, in
stating that "[i]n reverse confusion, the junior user is
typically a wealthier, more power ful company who can
overwhelm the market with advertising," 30 F .3d at 479
(emphasis added), we implied that there might be the rare
case in which reverse confusion exists wher e the junior
company overwhelms the senior user with advertisements
although it is not wealthier and mor e powerful.
In short, we hold that, although economic disparity
between the companies and the marks is an important
consideration in the evaluation of the marks' commer cial
strength, the District Court legally err ed in fashioning a
threshold "economic disparity" requirement before a reverse
confusion claim will even be considered. Because the
District Court failed to undertake the Lapp analysis with
respect to A&H's reverse confusion claim, we must vacate
the judgment with respect to that claim and r emand to the
District Court for a redetermination of those factors that
receive different treatment under direct and reverse
confusion theories, and for a reweighing of all of the factors
once those redeterminations have been made.
D. Guidance for Remand
1. Introduction
If the record suggested that, under the test we have set
forth, A&H could not succeed as a matter of law in a
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reverse confusion claim, we would be bound to explicate
our reasoning and affirm the judgment of the District
Court. However, we do not so conclude, and hence vacatur
and remand is necessary. Inasmuch as we have clarified
the law of reverse confusion in this cir cuit by filling the
gaps left in Fisons, it will be useful to the District Court if
we comment on the extent to which it needs to r evisit the
various issues.
As explained supra, the factors concer ning the market,
sales, and function similarity (factors (3), (7), (8) & (9)) need
not be reexamined for the reverse confusion claim because
the District Court has already discussed them in
connection with direct confusion and ther e is typically no
difference in the analysis of these factors for reverse and
direct confusion claims. As for the "actual confusion"
factors ((4) & (6)), the District Court did not cr edit the
evidence proffered by A&H and, in its best light, regarded
it as de minimis. A&H's evidence of actual confusion
primarily supported its claim for direct, rather than reverse,
confusion, see supra Section IV.G, with the only exception
being the Women's Wear Daily article mentioning "the
introduction of the Miracle Swimsuit in the upcoming
Victoria's Secret catalog." Because these incidents, though
relevant to reverse confusion, are more probative of direct
confusion but the District Court felt that they wer e too
weak to support even that claim, the court may, but need
not, reexamine this factor on remand.
2. Similarity of the Marks
When addressing the direct confusion claim, the District
Court placed great weight on the presence of Victoria's
Secret's housemark and disclaimer when it concluded that
the marks were not confusingly similar. See A&H IV, 57 F.
Supp. 2d at 168-69. However, as we explained supra,
although such embellishments of the junior user's mark
may still have relevance in the reverse confusion context,
their weight must necessarily be reevaluated. Therefore, on
remand, the District Court should reconsider the similarity
of the marks in light of A&H's reverse confusion claims.
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3. Strength of the Marks
The District Court did not consider the commer cial
strength of the marks within the ambit of the r everse
confusion Fisons analysis, but it functionally did as much
in its "threshold" determination that A&H lacked sufficient
"economic disparity" relative to V ictoria's Secret to advance
a reverse confusion claim. Therefor e, the District Court
essentially demonstrated that it weighed this factor in favor
of Victoria's Secret. However, in comparing the relative
commercial strengths of the products, the District Court
committed clear error: Although it consider ed the free
publicity received by A&H in determining its commercial
strength, it did not consider the free publicity received by
Victoria's Secret. This led to an inaccurate comparison of
their relative commercial vitality. Had the court used the
same calipers to measure the commercial strength of each,
it might have determined that the Miraclesuit had less
commercial strength relative to The Miracle Bra. Of course,
the court might well deem the difference unimportant, but
we cannot say that either Victoria's Secr et or A&H should
have this factor weighed in its favor as a matter of law.
Furthermore, the court should have also considered the
conceptual strength of the Miraclesuit mark, according to
the standards for conceptual strength set forth in Sections
IV.B and V.B.3, supra. In so doing, the court must gauge
the strength of the Miraclesuit mark and must consider
whether--as with the example set forth supra involving a
doll with the mark "Exxon"--the Miracle Bra/Miraclesuit
marks are so distinctive that, when consider ed
simultaneously with the court's determination as to their
similarities, consumers with a general awareness of The
Miracle Bra swimsuit are likely to assume that the
Miraclesuit is a Victoria's Secret pr oduct.
4. Intent
In its evaluation of A&H's direct confusion claim, the
District Court concluded that Victoria's Secr et's "choice to
extend The Miracle Bra mark to swimwear was for
legitimate reasons, rather than out of bad faith." A&H IV,
57 F. Supp. 2d at 172. However, because it "decline[d] to
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examine whether a likelihood of reverse confusion exists,"
id. at 178, the District Court focused on whether Victoria's
Secret had intended to "profit[ ] from the notoriety of
Plaintiffs' Miraclesuit mark," A&H IV , 57 F. Supp. 2d at
173-74. The court did not specifically addr ess the question
whether Victoria's Secret, rather than intending to "free
ride" on A&H's goodwill, instead intended to usurp it by
deliberately undertaking to cause consumer confusion (and
thereby destroy A&H's business identity). On remand, the
District Court should consider whether its pr evious finding
of Victoria's Secret's good faith is dispositive of the reverse
confusion intent analysis, or whether further examination
of this issue is warranted.
E. Summary
Although we believe that the District Court's evaluation of
individual factors relating to market, sales, and
functionality would have remained unchanged had it
examined A&H's reverse confusion claim in light of the
Lapp factors, we simply do not know how it would have
treated the commercial strength and mark similarity factors
had it considered the free advertising The Miracle Bra
received, or the effect of the housemark and disclaimer in
the reverse confusion context. We also cannot predict what
the result would have been had the District Court examined
the "intent" factor in light of A&H's r everse confusion claim,
or how the District Court would have weighed the various
factors had it not determined that ther e was a threshold
commercial disparity requirement.
The question of likelihood of confusion is ultimately one
of fact, and we cannot roll up our sleeves and engage in the
balancing ourselves. In its balancing on the dir ect
confusion claim, the District Court found that the case was
close, holding that no likelihood of confusion existed "solely
based on the presumption that Defendants will continue to
use the disclaimer when marketing The Miracle Bra
swimwear," A&H IV, 57 F. Supp. 2d at 169. As we have
explained, we believe that Victoria's Secr et's disclaimer has
a lessened significance for reverse confusion. We also
believe that the conceptual strength of the Miraclesuit mark
must be reevaluated. Under these circumstances, we
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cannot say as a matter of law that a differ ent weighing of
the factors could not have influenced the District Court to
make a different finding of ultimate fact, thus necessitating
a remand.
VI. Conclusion
We will affirm the District Court's judgment for Victoria's
Secret on the direct confusion claim. However, we will
vacate the judgment with respect to the r everse confusion
claim, and remand to the District Court for further
proceedings consistent with this opinion. The District Court
may wish to hear and consider additional evidence fr om the
parties on reverse confusion. The parties shall bear their
own costs.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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