u.s. polo association v. prl usa holdings, 12-1346-cv (2d cir.) (appellee l'oreal's 10-16-12...
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12-1346-cvUnited States Court of Appeals
for the
Second Circuit
UNITED STATES POLO ASSOCIATION, INC.,
USPA PROPERTIES, INC.,
Plaintiffs-Counter-Defendants-Appellants,
against
PRL USA HOLDINGS, INC.,
Defendant-Counter-Claimant-Appellee,
LOREAL USA, INC.,
Intervenor-Defendant-Counter-Claimant-Appellee.
_______________________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
BRIEF FOR INTERVENOR-DEFENDANT-COUNTER-
CLAIMANT-APPELLEE
ROBERT L.SHERMAN,ESQ.
PAUL HASTINGS LLP
Attorneys for Intervenor-Defendant-Counter-Claimant-Appellee
75 East 55th StreetNew York, New York 10022
(212) 318-6000
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CORPORATE DISCLOSURE STATEMENT
Counsel for Intervenor-Defendant-Counter-Claimant-Appellee LOreal
USA, Inc. hereby certifies (1) that LOreal is the ultimate corporate parent of
LOreal USA, Inc.; and (2) that LOreal is a publicly held company traded on the
Paris Stock Exchange that owns 10% or more of LOreal USA, Inc.s stock.
Dated: New York, New York
October 16, 2012
PAUL HASTINGS LLP
By: /s/ Robert L. Sherman
Robert L. Sherman (RS 5520)
75 East 55th Street
New York, NY 10022
Telephone: (212) 318-6000
Facsimile: (212) 318-6847
Attorney for LOreal USA, Inc.
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TABLE OF CONTENTS
Page
-i-
INTRODUCTION .................................................................................................... 1
STATEMENT OF THE CASE ................................................................................. 8
STATEMENT OF FACTS ..................................................................................... 11
A. USPAs Foray Into Fragrances ................................................ 11
B. The Prior Disputes ................................................................... 12
1. The 1984 Opinion and Order ......................................... 12
2. The 2006 Apparel Litigation and Settlement
Agreement ...................................................................... 16
3. The Trademark Trial and Appeal Board Order ............. 18
SUMMARY OF ARGUMENT .............................................................................. 19
ARGUMENT .......................................................................................................... 24
I. THE DISTRICT COURTS POLAROID ANALYSIS AND
FINDING OF INFRINGEMENT WERE NOT CLEARLY
ERRONEOUS .............................................................................................. 24
A. The District Court Properly Rejected USPAs Argument That
The Parties Prior History Gives USPA Affirmative Rights to
Use An Infringing Mark In Connection With Fragrances ................. 26
B. The District Court Properly Rejected USPAs Argument That
Its Purported Rights To And Prior Use of Other Marks In
Connection With Other Goods Should Affect Or Excuse The
Determination of Infringement ........................................................... 31
C. The District Courts Conclusion That USPA Adopted The
USPA Mark In Bad Faith Was Amply Supported By The
Evidence of Record ............................................................................ 35
D. The District Courts Analysis of the Polaroid Factor RegardingSimilarity of the Marks Was Properly Conducted ............................. 39
E. The District Court Properly Concluded That Apparel and
Fragrances Constitute Separate Markets and That The
Purported Relatedness Between Them Was Irrelevant .................. 43
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TABLE OF CONTENTS(continued)
Page
-ii-
F. The District Court Properly Assessed and Evaluated The
Evidence Regarding Confusion And The Weight To Be GivenEach Partys Survey ........................................................................... 47
G. The District Court Properly Weighed the Polaroid Factors to
Find Infringement But, In All Events, There Is No Balancing of
the Factors That Would Have Led To A Different Result ................. 53
II. THE DISTRICT COURT PROPERLY GRANTED INJUNCTIVE
RELIEF BASED ON TESTIMONY THAT USPAS USE OF ITS
INFRINGING MARK WOULD CAUSE PRL IRREPARABLE
HARM .......................................................................................................... 54
III. THE DISTRICT COURT PROPERLY EXERCISED ITS
DISCRETION IN FASHIONING AN INJUNCTION TAILORED
TO ADDRESS THE THREATENED HARM POSED BY A
REPEAT INFRINGER ................................................................................. 60
CONCLUSION ....................................................................................................... 62
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TABLE OF AUTHORITIES
Page(s)
CASES
eBay, Inc. v. MercExchange, L.L.C.,
547 U.S. 388 (2006) .....................................................................................passim
Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. V. Steinway & Sons,
523 F.2d 1331 (2d Cir. 1975).......................................................................................... 40
International Star Class Yacht Racing Assn v. Tommy Hilfiger U.S.A. Inc.,
94 Civ. 2663 (RPP), 1995 WL 241875 (S.D.N.Y. Apr. 26, 1995), affd in
part, vacated in part, and remanded, 80 F.3d 749 (2d Cir. 1996) ........................32
Jaguar Cars Ltd. v. Skandrani,
771 F. Supp. 1178 (S.D. Fla. 1991)............................................................................... 44
Louis Vuitton Malletier v. Burlington Coat Factory Warehouse,
426 F.3d 532 (2d Cir. 2005) ..................................................................................... 40, 41
Paco Sport, Ltd. v. Paco Rabanne Perfumes,
234 F.3d 1262 (2d Cir. 2000).......................................................................................... 41
Patsys Brand Inc. v. I.O.B. Realty, Inc.,317 F.3d 209 (2d Cir. 2003) ............................................................................................ 60
Peoples United Bank v. PeoplesBank,
401 F. Appx 607 (2d Cir. 2010).................................................................................... 25
Polaroid Corp. v. Polaroid Elecs. Corp.,
287 F.2d 492 (2d Cir. 1961), cert. denied, 368 U.S. 820 (1961) ...................passim
PRL Holdings, Inc. v. United States Polo Assn, Inc.,
520 F.3d ................................................................................................................................ 61
PRL USA Holdings, Inc. v. U.S. Polo Assn, Inc.,
No. 99 CV 10199(GBD), 2006 WL 1881744 (S.D.N.Y. July 7, 2006),
affd, PRL USA Holdings, Inc. v. U.S. Polo Assn, Inc.,520 F.3d 109 (2d
Cir. 2008) .............................................................................................................. 4
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Salinger v. Colting,
607 F.3d 68 (2d Cir. 2010) ........................................................................... 22, 55
Scarves By Vera, Inc. v. Todo Imports Ltd.,
544 F.2d 1167 (2d Cir. 1976).......................................................................................... 44
The All England Lawn Tennis Club (Wimbledon) Ltd. v. Creations
Aromatiques, Inc.,
220 U.S.P.Q. 1069 (T.T.A.B. 1983)................................................................ 26, 33, 34
Times Mirror Magazine, Inc. v. Field & StreamLicenses Co.,
294 F.3d 383 (2d Cir. 2002) ............................................................................................ 45
U.S. Polo Assn, Inc. v. Polo Fashion, Inc.,
No. 84-civ-1142(LBS), 1984 WL 1309 (S.D.N.Y. Dec. 6, 1984) (the
1984 Order) .............................................................................................................passim
U.S. Polo Assn, Inc. v. PRL USA Holdings, Inc.,
800 F. Supp. 2d 515 (S.D.N.Y. 2011)........................................................................... 10
U.S. Polo Assn, Inc. v. PRL USA Holdings, Inc.,
No. 09 Civ. 9476, 2012 WL 697137 (S.D.N.Y. Mar. 5, 2012) ................................ 4
Union Carbide Corp. v. Ever-Ready, Inc.,
531 F.2d 366 (7th Cir. 1976), cert. denied,429 U.S. 830 (1976) ..........................49
OTHER AUTHORITIES
Rule 36(b), Fed. R. Civ. P. ....................................................................................... 29
J. Thomas McCarthy,McCarthy on Trademarks and Unfair Competition
24:1, at 24-7-8 (4th ed. 2012) ......................................................................................... 44
J. Thomas McCarthy,McCarthy on Trademarks and Unfair Competition
30:4, at 30-16-30-18 (4th ed. 2012)................................................................................60
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INTRODUCTION
The United States Polo Association, Inc. (USPA) and USPA Properties,
Inc. (collectively, the USPA Parties) are repeat willful infringers of the famous
Polo Player Logo and POLO word mark owned by PRL USA Holdings, Inc.
(PRL). They commenced a declaratory judgment action against PRL, seeking
a determination that their intended use of the Double Horseman logo in
combination with the wording U.S. POLO ASSN. on certain blue packagingfor
mens fragrances would not infringe PRLs trademark rights. LOral USA, Inc.
(LOral and, together with PRL, the PRL Parties), PRLs exclusive licensee
for fragrances, intervened and with PRL counterclaimed for infringement.
At trial, the PRL Parties demonstrated that USPA had adopted the Double
Horseman logo in combination with U.S. POLO ASSN. (the USPA Mark) in bad
faith and that use of that mark on fragrances would create a likelihood of confusion
with PRLs famous Polo Player Logo and POLO word mark (the PRL Marks).
The PRL Parties further demonstrated that they would suffer irreparable harm if
USPA were permitted to make use of its infringing mark in connection with
fragrances. In light of the USPA Parties prior infringement of the same PRL
Marks, their violation of a prior injunction with respect to those same marks and
their intractable insistence that they occupy a unique position that excuses or
negates their repeated infringement of the PRL Marks, the PRL Parties sought an
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injunction that would set clear limits on the parties respective rights and finally
clarify and reaffirm the prohibitions contained in the injunction that had been in
force against USPA for more than 25 years. The PRL Parties also sought an award
of attorneys fees based on the district courts finding of bad faith infringement and
on the USPA Parties bad faith litigation tactics. The district court acknowledged
that attorneys fees properly could be granted under the facts of this case but,
exercising its discretion,declined to award such fees and instead issued an
injunction appropriate in scope for a repeat willful infringer.
USPA appeals from the finding of infringement and the issuance and scope
of the injunction based on arguments that, if accepted, would excuse USPAs
deliberate copying and infringement of the PRL Marks for all goods merely
because USPA is the self-described governing body of the sport of polo.
Throughout the proceedings, the USPA Parties consistently mischaracterized the
issues -- including the very marks in dispute and the prior history between PRL
and USPA -- and persisted in asserting the misguided argument that USPA has,
through prior infringing uses, somehow acquired special additional rights that
allow it now to infringe the PRL Marks in connection with fragrances, a product
category in which the PRL Marks have achieved enormous strength and with
which the USPA Mark heretofore was never used. Among the USPA Parties
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many intentional, blatant and deceptive mischaracterizations trumpeted throughout
the trial and now in this appeal are:
The astonishing assertion that the order in U.S. Polo Assn, Inc. v. Polo
Fashion, Inc., No. 84-civ-1142(LBS), 1984 WL 1309 (S.D.N.Y. Dec. 6,
1984) (the 1984 Order)1ratified and affirmed USPAs right to
conduct a licensing program and conferred on USPA greaterrights to use
a mark confusingly similar to the PRL Marks despite the fact that the
1984 decision found the USPAs mounted polo player logo there at issue
to infringe PRLs Polo Player Logo, prohibited USPA from using POLO
as a trademark, prohibited USPA from using a mounted polo player logo
unless distinctive from PRLs Polo Player Logo in content and
perspective and prohibited USPA from using the name United States
Polo Association, or any other name which emphasizes the word POLO
(or the words U.S. POLO) separate, apart and distinct from such name in
a manner that is likely to cause confusion with [PRL]. Nonetheless,
USPAs appeal brief continues to refer to its Court-Approved Retail
Licensing Program and to suggest that it has special rights by virtue of
the 1984 Order that enjoinedits use of the marks there at issue, despite
1A-1588-93.
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the district courts clarification in this case (in its opinion addressing
attorneys fees) that:
the 1984 Order did not, as the USPA Parties
contend, grant [USPA] any right whatsoever to
conduct a licensing program, nor did this Court in
the May 2011 opinion. Instead, both courts
recognized the fact that the USPA Parties may,
having no judicially granted right to do so, enter
the marketplace just as any other may so long as
they do not infringe the PRL Parties marks or
otherwise violate the terms of injunctions. Thus,
to the contrary, both opinions found that while the
USPA Parties may enter the market as any other,their legal ability to do so with respect to their
marks will be necessarily more limited than others
who have not previously been found to infringe.
U.S. Polo Assn, Inc. v. PRL USA Holdings, Inc., No. 09 Civ. 9476,
2012 WL 697137 (S.D.N.Y. Mar. 5, 2012).
Attempting to position the dispute regarding fragrances as already havingbeen adjudicated in the litigation concerning apparel
2(the Apparel
Litigation), despite the fact that the Apparel Litigation involved different
marks, different goods and different facts.
Referring to the marks at issue in this appeal as the very sametrademarks and the identical trademarks as those involved in the
2 PRL USA Holdings, Inc. v. U.S. Polo Assn, Inc., No. 99 CV 10199(GBD),
2006 WL 1881744 (S.D.N.Y. July 7, 2006), affd, PRL USA Holdings, Inc. v.
U.S. Polo Assn, Inc.,520 F.3d 109 (2d Cir. 2008).
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Apparel Litigation, when that case did not address the use of U.S. POLO
ASSN. or any use of the word POLO in combination with the Double
Horseman logo.
Describing this Court as having affirmed a finding of non-infringement inthe Apparel Litigation, when this Court determined only that the district
court had not committed reversible error with respect to two specific
evidentiary rulings and a jury instruction, as a result of which the jury
verdict was allowed to stand.
Misrepresenting a purported settled right to use its name, when thesettlement agreement regarding the use of UNITED STATES POLO
ASSOCIATION, U.S. POLO ASSN. and other variations did not allow
for use of such wording with mounted polo players and expressly applied
only to goods classified in International Class 25 (apparel) and select
goods in other classes, none of which included fragrances or any other
International Class 3 goods, and cannot be relied on as the basis for
a right to make trademark use of POLO, alone or in combination with
other words, in connection with fragrances.
Arguing that adoption of the Double Horseman logo in combination withU.S. POLO ASSN. on blue packagingfor fragrances was reasonable in
light of the Apparel Litigation due to the purported relatedness of the
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apparel and fragrance markets, despite USPAs awareness of the
Trademark Trial and Appeal Boards (TTAB) order expressly finding
that [i]nsofar as the district court order [in the Apparel Litigation] is
silent as to products falling under International Class 3, the likelihood of
confusion claim before us involves different transactional facts material
to the claim and that the Apparel Litigation does not have preclusive
effect with respect to use of the mark in connection with goods in Class
3.
Confusing its rights, which are no greater than those of any other, tomake descriptive, non-trademark use of the word polo and to use non-
infringing marks that relate to or depict the sport of polo, with a supposed
right to make trademark use of the word POLO (alone or in combination)
and of a specific depiction of the sport.
Pressing the unsubstantiated and novel position that, as a sportingassociation, USPA has a special sort of trademark right in gross to use its
name and Double Horseman logo in connection with any goods
regardless of the likelihood of confusion with the marks of a senior user
in a specific product category, subject to a unique infringement analysis
that, apparently, applies to USPA alone.
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Remarkably, USPA argued before the district court and now argues on
appeal that its infringement of the PRL Marks in connection with fragrances
should be judged more leniently than that of a first-time offender because of the
prior history between the parties -- a history, it bears repeating, in which USPA has
been found to infringe the PRL Marks it again has been found to infringe here.
USPA also argues that its infringement should not be enjoined, despite trial
testimony regarding the loss of control and significant damage to PRLs reputation
and brand image that would ensue from confusion in the fragrance marketplace.
Under USPAs reasoning, a declaratory judgment defendant never would have any
recourse or remedy. Instead, it would be in the untenable position of having to
allow the adjudged infringer to make widespread use of its mark and cause actual
damage to the senior users reputation, brand value and goodwill, no matter how
devastating, eligible to seek relief only after the harm, which by definition is
irreparable, already had occurred (but before such time had passed as to allow
a defense of acquiescence or laches). USPAs theory cannot be the law. In
addition, despite claiming to rely on the 1984 Order as a road map that sets the
boundaries for its retail licensing program, USPA objects that the injunction here
entered by the district court is impermissibly broad, notwithstanding that the
language objected to merely repeats and incorporates the very same restrictions
contained in the 1984 Order on which the USPA Parties so heavily rely.
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The district court carefully considered and properly rejected USPAs
arguments, which include those presented here on appeal, correctly applied
a traditional Polaroidanalysis and issued a comprehensive but appropriate
injunction. In doing so, it committed no clear error and no abuse of discretion.
STATEMENT OF THE CASE
The USPA Parties have attempted at every turn to cast this case as already
having been determined by (1) the 1984 litigation, which they inexplicably
interpret as having ratified the [USPAs] right to maintain a licensing program
using its name and a mounted polo player symbol that is distinctive from PRLs,
and (2) the Apparel Litigation, going so far as to file the action below as a related
case despite the fact that there was no other action pending a request that Judge
Daniels rejected out of hand. The marks, goods and marketplace factors involved
in this appeal differ from those previously litigated. The only relevance of the
prior cases is the fact that, in both, USPA was found to have adopted a mounted
polo player mark that infringed PRLs Polo Player Logo and, in the 1984 case, an
injunction issued prohibiting USPA from adopting marks that are confusingly
similar to the PRL Polo Player Logo or POLO word mark in connection with any
goods or services. As a prior infringer, USPA had and continues to have an
obligation to exercise greatercaution against adopting yet another infringing mark,
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not, as it argues, a right to have its infringement excused based on the parties prior
history.
Nonetheless, despite its status as a prior infringer, despite the long-standing
injunction against the adoption and use of a mounted polo player logo, the word
POLO and trade dress that is confusingly similar to the marks and trade dress used
by PRL, and despite the TTABs rejection of USPAs argument that apparel and
fragrances are sufficiently related that the resolution of the Apparel Litigation also
resolves USPAs rights in the USPA Mark for goods in Class 3, the USPA Parties
authorized their licensee to create packaging for a mens fragrance using the
Double Horseman logo in combination with U.S. POLO ASSN. on navy blue
background with pale metallic lettering that unmistakably mimicked the trade dress
of PRLs best-selling mens fragrance, POLO BLUE.
LOral, not a named defendant in the USPA Parties declaratory judgment
action, moved to intervene and engaged an expert to conduct a consumer survey
regarding the likelihood of confusion between the parties marks. That survey was
conducted in January 2010, immediately following the holiday shopping season.
The order granting LOrals motion to intervene was entered on February 11,
2010. A-176-78. The survey and report were finalized and signed on February 25,
2010. On March 2, 2010, LOral filed its answer, counterclaims and motion for
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a preliminary injunction. That motion was consolidated with the trial on the
merits, which was heard in September 2010 by agreement of the parties.3
On May 13, 2011, the Honorable Robert W. Sweet, United States District
Judge for the Southern District of New York, issued an opinion in which he held
that the USPA Parties had adopted the USPA Mark for fragrances in bad faith, that
the USPA Mark used in connection with fragrances infringed the PRL Marks and
that the USPA Parties had violated the 1984 Order. He then granted the PRL
Parties request for a permanent injunction. U.S. Polo Assn, Inc. v. PRL USA
Holdings, Inc., 800 F. Supp. 2d 515 (S.D.N.Y. 2011); A-2269-329. On
November 14, 2011, the PRL Parties moved for attorneys fees. On March 5,
2012, the district court issued an order acknowledging USPAs bad faith and repeat
infringement but, in the exercise of the courts discretion, denying the request for
attorneys fees, and a separate order entering a permanent injunction that prohibits
the USPA Parties from using the Double Horseman logo or the word POLO alone
or in combination with other words in connection with fragrances, and
incorporating other prohibitions contained in the injunction that has been in force
against USPA since 1984.
3The USPA Parties agreed in a letter to the court that was so ordered not to
use the offending mark and trade dress unless and until a decision by the
district court would permit them to do so. A-7-8, D.E. 24.
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USPA filed this appeal, challenging the district courts finding of
infringement, entry of an injunction and the scope of that injunction.
STATEMENT OF FACTS4
A. USPAs Foray Into FragrancesIn 2008, USPA discussed with JRA Trademark Company Ltd. (JRA), its
master licensee in the United States, expanding into the fragrance market.5
By fall
of 2009, JRA designed packaging for use on a mens fragrance that featured the
Double Horseman logo that was being used by USPA on apparel, but this time in
combination with the wording U.S. POLO ASSN., on blue background with a thin
line creating a border around the perimeter of the front panel all appearing in light
gold.6
4For a summary of the facts concerning the evolution and acknowledged fame
of PRLs Polo Player Logo, shown immediately below, the Court is
respectfully referred to the district courts opinion at A-2273-75; A-2290-91.
5A-992:24-A-993:8.
6A-37; A-994:22-24.
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On November 13, 2009, the USPA Parties filed a declaratory judgment
action against only PRL seeking a determination that USPAs use of the Double
Horseman logo and U.S. POLO ASSN word mark in connection with fragrances
does not infringe PRLs rights.7
A fair reading of the complaint makes it clear that,
at that time, the USPA Parties had not yet launched their fragrance product.8
The
USPA Parties were about to go to market despite having no business plan, budget,
advertising or experience in the product category. A-2315.
Because USPA persists in presenting a tortured interpretation of its litigation
history with PRL, in an attempt to enlarge its trademark rights and excuse its
infringement, it is necessary to provide the factual background of those previous
disputes.
B. The Prior Disputes1. The 1984 Opinion and OrderIn 1984, USPA and its licensees commenced an action against PRLs
predecessor (also referred to herein as PRL) for a declaratory judgment that
various articles of merchandise bearing a mounted polo player symbol did not
infringe PRLs Polo Player Logo. PRL counterclaimed for trademark
infringement. The matter came before Judge Sand, who found that USPA and its
7A-18-138.
8A-28, 36; A-30, 44, 47; A-31, 51; A-32, 55.
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licensees infringed PRLs Polo Player Logo, POLO and POLO BY RALPH
LAUREN trademarks and trade dress, and engaged in unfair competition.9
The
1984 Order enjoined USPA and its licensees from infringing the Polo Player Logo
and the word POLO, but clarified that USPA was not enjoined generally from
engaging in a licensing program using non-infringing trademarks.10
Throughout this case, USPA inexplicably has relied on the 1984 Order as
having granted USPA affirmative and judicially-recognized rights to conduct
a retail licensing program using its name and a mounted polo player logo. In its
appeal brief, USPA repeatedly makes such claims, e.g., the 1984 Order, which
affirmed [USPAs] right to use its name and a distinctive mounted polo player
symbol in connection with a retail licensing program,11
[i]n recognizing
[USPAs] right to conduct a retail licensing program using marks related to the
sport of polo, the 1984 Order acknowledged the rights of a sporting association to
use marks related to its sport,12
and the 1984 Order held that [USPA] is entitled
to use its name in a manner that does not confusingly emphasize the word Polo or
9 U.S. Polo Assn v. Polo Fashions, Inc., No. 84 civ. 1142 (LBS), 1984 WL 1309
(S.D.N.Y. Dec. 6, 1984).10
A-1588-93, 8, 9.11
Appellants Br. 25.12
Id., 26.
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U.S. Polo.13
There is no fair reading of Judge Sands 1984 opinion and order
that can in any way support USPAs characterization of the order as having
granted, authorized or ratified any affirmative trademark rights in USPA. After
finding USPA liable for infringing PRLs Polo Player Logo, Judge Sand entered an
injunction that prohibitedUSPA from
(a) using any of the Polo Marks or any name or mark or
symbol which is confusingly similar thereto, in
connection with the sale or offering for sale of any
goods (d) using for any commercial purposes
whatsoever, the name United States Polo Association,or any other name which emphasizes the word POLO or
the words U.S. POLO separate, apart and distinct from
such name in a manner that is likely to cause confusion
with [PRL]; (e) infringing [PRLs] trademark, trade
names or trade dress; (h) using any reproduction,
counterfeit, copy or colorable imitation of the Polo
Marks, including but not limited to POLO used as
a trademark, in connection with the publicity, promotion,
sale or advertising of goods sold by them including,
without limitation, apparel, fashion accessories and any
other items or any related service; and (i) affixing,
applying, or using in connection with the sale of any
goods, a false description or representation, including
words or other symbols tending to falsely describe or
represent such goods as originating with [PRL], and from
offering such goods in commerce, including specifically,
but not limited to, all uses of the singular or composite
use of POLO and U.S. POLO in a manner which is likely
to cause confusion with [PRL].14
13 Id., 27.
14A-1588-93, 8.
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The 1984 Order clarifies that [n]othing contained herein shall be construed
to prohibit [USPA] from using the word polo, not as a trademark or indication
of origin, but solely to describe or refer to the sport of polo or to prevent USPA
from conducting a retail licensing program utilizing the USPA collective
membership mark (Reg. No. 1,181,651), the USPA horsehead symbol (Reg.
No. 1,304,236) or a mounted polo player or equestrian or equine symbol which is
distinctive from the [PRL] polo player symbol in its content and perspective,
provided that such symbol is used in conjunction with trade dress, i.e., labels,
hangtags and packaging, which does not utilize white or silver lettering on a blue
background or emphasize the word POLO by presenting it in a rectangle or
between parallel lines or in lettering larger than that of associated words or letters
used to identify USPA, and does not utilize any other trade dress which is likely to
cause confusion with [PRL].15
Although the 1984 Order recognizes that USPA
has the same rights as any other to make descriptive (i.e., non-trademark) use of
the word polo and to conduct a retail licensing program using trademarks and
trade dress that do not infringe PRLs trademarks or trade dress, it does not in any
way expand USPAs rights or endorse its use of any particular mark.
15 Id., 9.
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2. The 2006 Apparel Litigation and Settlement AgreementIn the Apparel Litigation, the jury considered four marks used in connection
with apparel and certain other goods, none of which includes fragrances. The jury
determined (a) that the solid double horseman alone infringed PRLs Polo Player
Logo, but (b) that the solid double horseman logo with the letters USPA
underneath, the outline double horseman alone (the mark now referred to as the
Double Horseman logo), and the outline double horseman with the letters USPA
underneath did not infringe PRLs Polo Player Logo in connection with the goods
there at issue.16
Unlike a courts determination of infringement, the jurys verdict does not
provide any information or insight regarding how the jurors analyzed each of the
Polaroidfactors, only that, on final balancing, certain marks were found not to
infringe. It may be that the jury determined that the marks were extremely similar
but that the similarity was outweighed by other Polaroidfactors and/or excused by
other facts there present. Regardless, despite USPAs repeated references in its
brief to the jurys determination regarding the very same or identical marks,
the jury in the Apparel Litigation neverconsidered the Double Horseman logo in
16A-2228-31.
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combination with U.S. POLO ASSN., or any mark that includes the term POLO.
The final order and judgment entered by Judge Daniels in that case made it crystal
clear that the jury verdict pertained only to the goods there at issue, namely,
apparel, watches, leather goods and certain goods in Class 28 that relate solely to
the sport of polo. Excluded from the Apparel Litigation by stipulation of the
parties were fragrances, in Class 3.17
The Apparel Litigation, therefore, addressed
different marks used on different goods, not the marks here at issue in connection
with fragrances. Similarly, although USPA references its settled right to use its
name and the parties agreement with respect to use of U.S. POLO ASSN., that
agreement by its terms is limited to specified goods; it does not address USPAs
right to use that mark in connection with fragrances and cannot now be relied on
by USPA as a basis for asserting such rights.
PRL appealed three specific issues from the Apparel Litigation -- two
evidentiary rulings and the district courts refusal to give a jury instruction stating
that, as a previous infringer, USPA must keep a safe distance from PRLs marks.
This Court affirmed the district courts rulings, holding that an instruction that
incorporated the safe distance rule might confuse a jury as to the proper standard
for liability. That does not, however, equate to holding, as USPA here asserts, that
17A-1096:9-A-1097:11; A-2228-31.
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USPA is different in any way from a traditional infringer that can be required to
keep a safe distance from the PRL Marks. Nor does it equate to an affirmation or
acknowledgment of USPAs right to use the Double Horseman logo on other
goods. It certainly cannot be understood as a judicial affirmation of the right to use
the USPA Mark at issue here, as that mark never was before the jury or this Court.
3. The Trademark Trial and Appeal Board OrderIn their declaratory judgment complaint, the USPA Parties alleged that
following judgment in the Apparel Litigation, they requested that the USPTO end
suspension of opposition proceedings involving U.S. POLO ASSN., 1890 and
Double Horseman Trademark for cosmetics and fragrances.18
What actually
happened was that USPA filed a motion for summary judgment seeking to dismiss
the opposition with prejudice based on the decision in the Apparel Litigation. In
November 2008, the TTAB denied USPAs motion for summary judgment and
held that the Apparel Litigation involved different transactional facts, namely, that
apparel was materially different from fragrances, such that the Apparel Litigation
was not material to the opposition proceeding (TTAB Order).19
The TTAB also
noted that the marks at issue in the Apparel Litigation differed from those in the
opposition proceeding, as the Apparel Litigation did not address the combination
18A-27, 34.
19A-2232-37; A-1097:25-1099:5.
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of the Double Horseman logo with the wording U.S. POLO ASSN.20
Utterly
ignoring that holding, USPA continues to insist that the Apparel Litigation and the
relatedness of apparel and fragrances essentially foreclose consideration of
whether its adoption and use of the USPA Mark infringe the PRL Marks.
SUMMARY OF ARGUMENT
USPAs arguments regarding its right to enter the fragrance market reflect
its fundamental and seemingly intractable misunderstanding of trademark law.
Trademark rights do not exist in gross. USPA has no generalized affirmative
rights to use its marks or marks related to the sport of polo where, as here,
those marks used in connection with specific goods infringe the rights of a senior
user. The concepts of natural expansion and related goods apply to extend the
protection available to a senior userwhose marks are infringed by use on related
goods; those concepts have no application when the goods at issue are identical
(here, fragrances versus fragrances) and may not be used by an infringer based on
its use of a mark in connection with other goods. Those found liable for
infringement in the past have an obligation to exercise greater care not to infringe
the same partys marks in the future; ones status as a sporting organization, retail
20A-2232-37.
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licensor, or even long-standing user of a mark in connection with other goods or
services, does nothing to lessen that obligation.
USPA knows that under a straightforward Polaroidanalysis, there is no
question that the USPA Mark infringes the PRL Marks. It therefore goes through
contortions to avoid or constrain the application of the Polaroidfactors,
mischaracterizing facts and findings, and essentially arguing that this Court should
create a special law of trademarks that applies only to USPA.
Specifically, USPA argues that the district courts finding of likelihood of
confusion, and in particular the finding of bad faith, cannot be supported by the
record in light of the lack of actual customer confusion, the history of the marks
coexistence, and the judicially recognized right of [USPA] to use their marks in the
marketplace as well as a federal jurys earlier determination that the very mark
that the court found had been adopted in bad faith did notcause a likelihood of
confusion or infringe on PRLs marks.21
USPA further argues that the district
court failed to consider the rights of [USPA] to use marks related to the sport
of polo, the strength of [USPAs] marks and brand, the previous agreements and
interactions between these parties, the marketplace coexistence between the
parties products, the relationship between the fragrance and apparel markets, and
21Appellants Br. 20.
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the evidence that consumers have not been confused by [USPAs] use of its
marks.22
The PRL Parties respectfully point out USPAs artful wording and
presentation of the issues and the need for this Court to treat with skepticism any
suggestion by USPA that the parties history essentially disposes of the question of
infringement.
There has been no judicial recognition of USPAs right to use the mark at
issue in this case, which is the only mark that matters, and no judicial
consideration of USPAs right to use any mark in connection with fragrances. In
fact, the only previous determination regarding USPAs right to use the USPA
Mark at issue in this case was the TTAB Order, which rejected USPAs argument
that the outcome of the Apparel Litigation gave it any rights to the USPA Mark in
connection with fragrances. Despite USPAs reference to a federal jurys earlier
determination regarding the very mark that the court found had been adopted in
bad faith, the fact is that the federal jury did notconsider the very mark that was
before the district court. Even leaving aside the differences between the goods at
issue in the Apparel Litigation and the current case, the federal jury never
considered the Double Horseman logo in conjunction with U.S. POLO ASSN. or
any use of the word POLO. The district court here explicitly stated that its finding
22 Id.
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of bad faith was based, in part, on USPAs initial adoption of the USPA Mark
along with trade dress that mimicked PRLs trade dress for its best-selling POLO
BLUE fragrance, which was not before the jury in the Apparel Litigation. The
previous agreements between the parties expressly relate only to the goods
identified therein and form no basis for USPA to assert trademark rights in any
mark with respect to fragrances.
USPAs arguments against the issuance of the injunction and against the
scope of injunction also are without merit. Even after eBay23and Salinger,24
trademark owners are not required to suffer actual harm before seeking injunctive
relief. If that were the case, a declaratory judgment defendant never would have
recourse against an infringer. The very nature of the irreparable harm attendant to
marketplace confusion ensures that the harm often will be difficult to measure or
prove. Although courts generally may no longer presume irreparable harm from
a finding of infringement, injunctive relief remains appropriate and available when
the factors that justified the old presumption pertain (namely, threat of loss of
control, reputational harm, damage to brand image and diminution in brand value).
That is not surprising. As Chief Justice Roberts stated in eBay, when determining
whether an injunction should issue, a page of history is worth a volume of logic.
23 eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).
24 Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010).
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547 U.S. at 395. The PRL Parties witnesses testified regarding the irreparable
harm they likely would suffer if USPA were permitted to use its infringing mark.
It was well within the district courts proper exercise of discretion to credit that
testimony and grant injunctive relief. Similarly, it was well within the proper
exercise of discretion for the district court to issue an injunction that prohibits use
of marks beyond the specific mark before it, and to reassert the prohibitions
contained in a prior injunction that USPA violated. It is not clear what USPAs
objection to those prohibitions can be, as it claims to have relied on the prior
injunction as the road map for its brand development for the past 25 years.
The district court considered USPAs arguments and properly rejected the
notion that the parties history, USPAs position as a sporting association that
conducts a retail licensing program, or the purported relatedness of fragrances and
apparel should constrain the traditional Polaroidanalysis or excuse USPAs
infringement. The district court committed no error in its determinations regarding
each Polaroidfactor, including similarity of the marks, bad faith and actual
confusion. Having found that each of the Polaroidfactors either favors the PRL
Parties or is neutral, any balancing of the factors would result in a finding of
infringement. There is no basis on which the district courts determination of
infringement can or should be reversed. In light of the finding of infringement, the
testimony regarding irreparable harm and USPAs status as a repeat infringer, the
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district court had ample justification for granting a broad injunction. Neither the
issuance of that injunction nor its scope reflects an abuse of discretion.
ARGUMENT
I. THE DISTRICT COURTSPOLAROID ANALYSIS AND FINDINGOF INFRINGEMENT WERE NOT CLEARLY ERRONEOUS
For 50 years, the legal standard in this circuit for determining whether
a party has engaged in trademark infringement has been application of the factors
contained in Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d 492 (2d Cir. 1961),
cert. denied, 368 U.S. 820 (1961). While paying lip service to the Polaroid
factors, USPA advocates a novel, radical departure from that standard. USPA
essentially asks this Court to accept that USPA -- alone among trademark owners -
- has acquired rights in gross to use certain marks and variations thereof,
irrespective of the rights of a senior user with respect to specific goods and
irrespective of the confusion that would ensue. USPA argues that the district court
should have constrained its infringement analysis based on purported rights that
USPA has in other marks used on other goods; should have interpreted a 25-year-
old order that enjoinedUSPA from infringing the same PRL marks at issue here as
insteadpermitting USPA to adopt and use marks likely to cause confusion; should
have excused infringement in the fragrance market based on litigation outcomes
and a settlement agreement that related expressly and exclusively to other goods;
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and should have ignored as reasonable USPAs manifest bad faith intent to copy
and free ride on the PRL Marks and trade dress with respect to fragrances.
Despite USPAs persistent efforts to position its declaratory judgment
complaint, and this entire action, as a mere continuation of prior litigation between
PRL and USPA, the law remains clear. No trademark rights exist in gross. A
sporting association and/or a retail licensor has no greater right than any other to
make use of its marks (or similar marks) in connection with a new category of
goods, where use of those marks on such goods creates a likelihood of confusion
with the mark of a senior user. The question of infringement must be analyzed as
it relates to the marks at issue as used in connection with the goods at issue, not
based on different marks used in connection with different products at a different
time.
The district court considered and correctly rejected USPAs arguments
regarding the application of an alternative standard or approach, and properly
analyzed the likelihood of confusion under the traditional Polaroidfactors. USPA
has a high bar to reach in asking this Court to reverse the district courts ultimate
determination. This Court will set aside a district courts findings on each
Polaroidfactor only for clear error. The Court reviews the overall balancing or
weighing of the factors de novo. Peoples United Bank v. PeoplesBank, 401 F.
Appx 607, 608 (2d Cir. 2010) (In the context of a trademark infringement suit,
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we review the district courts findings on each of the Polaroid factors under
a deferential standard and will set them aside only for clear error, and we review
the overall balance of the Polaroid factors as a legal issue de novo). Here, the
district court found that not one of the Polaroidfactors favored USPA. Absent
a finding that the district court committed clear error in its resolution of a factor
that itself outweighs all of the other factors combined, there is no de novo
balancing that could lead to a finding of non-infringement.
A.The District Court Properly Rejected USPAs Argument ThatThe Parties Prior History Gives USPA Affirmative Rights to Use
An Infringing Mark In Connection With Fragrances
USPA argues that the district court clearly erred in its Polaroidanalysis by
purportedly disregarding the market conditions in which the parties marks are
used. Those market conditions, according to USPA, refer to claimed
protectable rights in its own marks related to the sport of polo. The district court
did not disregard USPAs arguments. It considered them and found them
irrelevant, meritless or unavailing. That USPA does not like the outcome does not
mean that the analysis was clearly erroneous.
The specific market conditions that USPA claims should have formed the
parameters within which the district court conducted its Polaroidanalysis are
summarized and addressed in turn:
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(1) USPA argues that the district courts conclusion that [USPA] hadadopted its Double Horseman mark in bad faith had no basis in the record
because a jury presented with the Double Horseman mark had already concluded
that it did not infringe on PRLs mark, a decision that was affirmed by this Court.
Appellants Br. 23-24. However, as USPA itself emphasizes elsewhere in its brief,
here [t]he district courts conclusion was that the use of POLO in conjunction
with the Double Horseman mark in the [fragrance] context [] infringes the PRL
Parties substantive trademark rights. Id. at 53 (emphasis added by USPA).
USPAs argument against the scope of the injunction explicitly relies on the fact
that the district courts finding of likely confusion related to the use of the Double
Horseman markin combination with the word mark POLO. Id. at 54. The
USPA Mark considered by the district court in this case never was before the jury
in the Apparel Litigation. Far from disregarding the 2006 jury finding, Judge
Sweet considered and addressed it directly. His opinion states:
Nor are the PRL Parties claims foreclosed by
a jurys finding in 2006 . Most saliently, the marks at
issue here are employed in the context of fragrances, not
apparel. This case involves the use of the Double
Horseman mark with the word mark U.S. POLO ASSN.
1890, not alone or with USPA beneath. In contrast tothe 2006 apparel case, the dominant term in the word
portion of USPAs mark here and that which
consumers are most likely to view as having trademark
significance is POLO.
A-2288.
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Judge Sweet also pointed out that the TTAB had noted the differences
between the marks in the Apparel Litigation and the USPA Mark at issue with
respect to fragrances, namely, that the latter includes the wording U.S. POLO
ASSN. and that the import of the word POLO may differ in the context of
different goods, i.e., that it may be more arbitrary with respect to fragrances than
with respect to apparel. A-2289, n. 8, 9. The district court opinion makes clear
that the determination of bad faith also considered USPAs adoption of the blue
packaging presented in its declaratory judgment complaint, packaging that never
was before the jury in the Apparel Litigation. A-2313. The jurys finding with
respect to a different mark used on different goods in no way enlarges USPAs
rights or constrains the analysis of whether the mark here at issue infringes the
PRL Marks in connection with fragrances.
(2) USPA nonetheless presses the point, and attempts to argue that thesettlement agreement with PRL regarding the use of U.S. POLO ASSN. in
connection with other goods confers a right on USPA to use that mark in
connection with fragrances. Specifically, USPAs brief states that [t]he jury [in
the Apparel Litigation] did not consider [USPAs] right to use its U.S. POLO
ASSN. mark because that use was permitted by prior stipulation of the parties,
and that PRL withdrew its legal challenge to the use of U.S. POLO ASSN. on
apparel, leather goods, and watches and this Court affirmed the use of the Double
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Horseman mark on apparel, leather goods and watches.25
Appellants Br. 24 n2
and 25. Leaving aside the misleading statement that this Court affirmed the use
of the Double Horseman mark, when this Court only considered and affirmed
three specific rulings of the district court, there is no support whatsoever for the
proposition that a settlement or adjudication with respect to one category of goods
confers rights on a junior user with respect to any other category of goods. It is
disingenuous for USPA to attempt to enlarge its rights based on a settlement
agreement that, by its terms, was limited solely to the goods addressed therein,
which did not include fragrances. In addition, as Judge Sweet noted, the 1984
Order that USPA also attempts to use as a basis for its preexisting rights anticipates
reapplication ofPolaroidbecause the analysis of which symbols are distinctive
from PRLs Polo Player logo -- that is, not infringing -- and whether use of the
United States Polo Association name or other name is used in a manner that is
likely to cause confusion requires application ofPolaroid. In finding a likelihood
of confusion, the district court notes that the USPA parties have violated the 1984
Order insofar as it prohibited USPAs adoption of infringing marks. A-2287-88.
Far from a settled right to use its name, the use of U.S. POLO ASSOCIATION,
25The only evidence of that contention appears in response to a Request for
Admission filed in the Apparel Litigation, which is expressly inadmissible in
this action. See Rule 36(b), Fed. R. Civ. Pro. The PRL Parties hereby renew
their objection, A-972:10-973:5; A-1692-93, and move to exclude such
evidence.
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U.S. POLO ASSN. and other variations is not settled when USPA expands such
use into markets where it is likely to cause confusion with the existing rights of
a senior user.
(3) USPA also makes vague allusions regarding its judicially recognizedright to use marks as the governing body of the sport of polo and the protectable
rights in its own marks related to the sport of polo, marks that have achieved
recognition and secondary meaning among consumers through the [USPAs]
extensive retail licensing program. Appellants Br. 24. The PRL Parties
repeatedly have stated that they do not contest the USPA Parties right to use the
word polo to describe or refer to the sport of polo, i.e., in a descriptive rather
than trademark sense, or to conduct a product licensing program using marks that
do not infringe PRLs trademark and trade dress. The claim that USPA has the
right to use marks related to the sport of polo does not confer any affirmative
right to use specific marks that infringe a senior users trademark rights in
a specific product category. Just like any other, USPA has trademark rights only
by virtue of using a particular mark in connection with specific goods or services.
Its position as a sporting association or retail licensor does not change that
fundamental fact of trademark law and does not give it the right to adopt infringing
marks merely because they refer to or depict the sport of polo.
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The district court considered all of those arguments, presented by USPA in
an effort to avoid a traditional Polaroidanalysis, and found them unpersuasive.
That determination was proper, reasonable, based on the record and consistent with
long-standing trademark principles and precedent.
B.The District Court Properly Rejected USPAs Argument That ItsPurported Rights To And Prior Use of Other Marks In
Connection With Other Goods Should Affect Or Excuse The
Determination of Infringement
In presenting arguments regarding USPAs rights to and prior use of the
marks at issue, USPA again (1) inexplicably suggests that the mark at issue in
this case is the same as the marks before the court in 1984 and 2006 and
(2) mistakenly appears to believe that there exists a concept of trademark rights in
gross, rather than rights appurtenant to particular goods. Those arguments have
been addressed above. USPA refers to [t]he parties competing rights to use
marks relating to the sport of polo. However, the parties have no such
generalized rights. Neither party has a monopoly on or is precluded from using
unspecified marks relating to the sport of polo. PRL never has attempted to
prevent USPA from making use of marks, that relat[e] to the sport of polo but do
not create a likelihood of confusion with the PRL Marks.
The USPA Parties present a novel but bizarre argument, suggesting that
sports associations with licensing programs deserve different -- and preferential --
treatment under the trademark laws. The cases cited by USPA regarding sporting
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associations and their licensing programs are irrelevant and inapt. The PRL Parties
do not dispute that sporting associations, may license their marks on a variety of
goods, provided that those marks do not infringe the rights of a senior user. That
the facts set forth in the cited cases indicate that the National Football League and
the National Basketball Association license their trademarks for use on a variety of
products is of no legal significance, and certainly does nothing to establish that
USPAs role as a sporting association confers on it any special trademark rights.
Appellants Br. 26-27. The only conceivable reason for USPAs reference to those
cases is to distract from the admission made at trial, namely, that USPA Properties
president is not aware of a single sporting association that has licensed its mark for
use with fragrances and that there is no natural association whatsoever between the
word or pictorial representation of polo and perfumery, other than the
association created by the PRL Parties use of their iconic Polo Player Logo and
POLO word marks. A-1038:3-A-1039:22.
The cases cited by USPA do not support its position. Reliance on
International Star Class Yacht Racing Assn v. Tommy Hilfiger U.S.A. Inc., 94 Civ.
2663 (RPP), 1995 WL 241875 (S.D.N.Y. Apr. 26, 1995), affd in part, vacated in
part, and remanded, 80 F.3d 749 (2d Cir. 1996) is misplaced. There, the sports
association was the senior user of the goods in issue and was alleging
infringement. Here, the USPA Parties are the junior users engaging in
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infringement. The court there did not find an inherent right in an association to
conduct a licensing program. The All England Lawn Tennis Club (Wimbledon)
Ltd. v. Creations Aromatiques, Inc., 220 U.S.P.Q. 1069 (T.T.A.B. 1983) involves
neither a sports association nor infringement. There, the applicant attempting to
register WIMBLEDON as a trademark was refused registration for creating a
conflict with the famous tennis event, represented by the opposer, a British
corporation.
Contrary to USPAs assertion, the 1984 Order created no special or
affirmative rights and acknowledged only that USPA has the right, as does any
other, to make descriptive, nottrademark, use of the word polo, and to conduct
a retail licensing program using non-infringing marks. Ironically, the source
USPA relies on for its purported affirmative right to use its name is a provision
of the 1984 Order that enjoins USPA from using for any commercial purposes
whatsoever, the name United States Polo Association, or any other name which
emphasizes the word POLO (or the words U.S. POLO) separate, apart and distinct
from such name in a manner that is likely to cause confusion with defendants,
Ralph Lauren or any entity affiliated with them. A-1588-93, 8. The source that
USPA relies on for its purported acknowledged right to use marks relating to the
sport of polo is a paragraph from the 1984 Order that merely clarifies that the
injunction does not prohibit USPA from using the word polo, not as a
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trademark or indication of origin, but solely to describe or refer to the sport of
polo and, possibly, a paragraph clarifying that the injunction does not prohibit
USPA from conducting a retail licensing program using a mounted polo player that
is distinctive from the Polo Player Logo and that is not used in conjunction with
trade dress that emphasizes the word POLO and that does not use any other
trade dress which is likely to cause confusion with PRL. Id. at 9. It strains
credulity that USPA asked the district court, and now this Court, to read the 1984
Order as granting USPA any special rights or according it broader protection due
to its status as either a sports association or a retail licensor.
Moreover, the fact that USPA may have incontestable trademarks (for other
categories of goods) in its name and that [c]onsumers have seen the U.S. Polo
Assn. name on products in the U.S. ranging from apparel to leather goods to
watches to home textiles due to a settlement agreement that expressly applied
only to such goods does nothing to alter the parties rights, to diminish PRLs right
to protect its marks or to change the nature of the Polaroidanalysis.
Equally mistaken is USPAs argument regarding the safe distance rule and
this Courts determination that it was not reversible error for the district court in
the Apparel Litigation to have declined to give a jury instruction that incorporated
that rule. This Courts determination was rooted in a desire to avoid confusing the
jury as to the proper standard for a finding of likelihood of confusion. It did not
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reflect, expressly or implicitly, the acknowledgement of affirmative rights granted
to [USPA] as set forth in the 1984 Order, because there were no such rights
granted to USPA in that prohibitory order. It also did not reflect a determination
by this Court that USPA is anything other than a traditional infringer or that the
Apparel Litigation was anything other than a traditional infringement case. This
Courts affirmation of the district courts decision to reject a jury instruction
regarding the safe distance rule in no way undercuts the general rule or its
applicability to USPA. In all events, the district court didtake into account
USPAs right to use a non-infringing mounted polo player logo, but nonetheless
found the USPA Mark to be infringing.
C.The District Courts Conclusion That USPA Adopted The USPAMark In Bad Faith Was Amply Supported By The Evidence of
Record
As noted, in 2009, the USPA Parties decided to enter the mens fragrance
market with the Double Horseman logo in combination with U.S. POLO ASSN. on
blue packaging with light gold metallic print. That mark and trade dress violated
the 1984 Order and was an obvious effort to enter a market in which it had no
strategic business plan, no budget, no advertising plan, no experience and no
presence, by creating confusion and benefiting from consumers mistaken
association of the USPA Marks with the reputation and good will of the PRL
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Parties and their best-selling fragrance products.26
See district courts opinion at
A-2315.
USPA also stated during the litigation and in its appeal brief that it had
justifiable reasons for adopting blue packaging, namely, that consumers would
associate its fragrance with the color of certain tags,27
although hardly visible and
located on the inseam, waistband, hangtag and hook of certain articles of apparel.28
Tags on the inseam of a pair of shorts cannot be said to function as source
identifiers or provide the basis for associating USPAs other goods with its
fragrance. The district court appropriately found USPAs testimony not to be
persuasive. A-2314.
USPAs efforts to explain away its bad faith are unavailing. The record
clearly establishes that the PRL Parties had used the PRL Marks on fragrances
since at least 1978.29
That the Double Horseman logo purportedly was developed
before PRL launched its POLO BLUE product does nothing to negate USPAs bad
faith in adopting and using the USPA Mark and offensive trade dress after PRLs
launch. Bad faith relates to adoption and use. By the timeUSPA started to use the
26A-1054:22-1056:8, A-1056:9-1057:10.
27A-1043:9-12.
28A-1041:13-A-1043:13.
29A-814:11-A-815.
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USPA Mark (including the Double Horseman logo and U.S. POLO ASSN. word
mark) in connection with the blue trade dress, POLO BLUE was well established
as a market-leading fragrance. A-816:8-14; A-819:23-24; A-832:1-12.
USPAs appeal brief states that [b]efore LOral filed its motion for
a preliminary injunction, the [USPA] decided to use other principal colors for
packaging in connection with fragrance products. This decision was made in an
effort to focus the declaratory judgment action on the use of the Double Horseman
mark rather than the trade dress.30 However, the record evidence is to the
contrary. Between the middle of November 2009, when USPAs declaratory
judgment complaint was filed and USPAs fragrance displaying the Double
Horseman logo was first introduced, and the second half of February 2010, when
USPA claims to have made the decision to drop the color blue as the predominant
background color for its fragrance packaging, nothing changed concerning the
conflict with the PRL Parties.31
The evidence shows that the decision to change
packaging color was made, abruptly and without explanation, on March 4, 2010,
afterLOral filed its motion for a preliminary injunction, which attached the
30Appellants Br. 15-16, citing A-1003:16-1004:10.
31A-1044:7-1045:9; A-1048:20-1049:3.
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report and results of its first consumer survey demonstrating a very high likelihood
of confusion.32
As previously noted, the jurys finding regarding the Double Horseman logo
in the Apparel Litigation is irrelevant to the issues involved in this case.
Regardless, the district court clarified that its finding of bad faith was based in part
on USPAs initial adoption and use of the blue packaging. Therefore, the mark
before the district court was not the Double Horseman logo that had been
considered by the jury in connection with apparel, but a mark consisting of the
Double Horseman logo, the wording U.S. POLO ASSN., and the blue trade dress.
The purported coexistence of one of those elements namely, the Double
Horseman -- with the PRL Marks in other categories of goods is irrelevant and
does nothing to mitigate USPAs bad faith in adopting and using the mark as
a whole, including the infringing trade dress, in 2009. Moreover, at the time that
USPA adopted and used that mark for fragrances, it was aware of the TTAB Order
that rejected USPAs arguments regarding the relatedness of apparel and
fragrances, suggesting that any claims USPA makes that it relied on the Apparel
Litigation is itself indicative of USPAs bad faith.
32A-1733; A-1003:16-A-1004:10, A-1047:22-A-1049:3.
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Finally, USPAs argument that the use of the color blue in trade dress
cannot support a finding of bad faith is extremely difficult to reconcile with the
1984 Orders prohibition against the use of a mounted polo player used in
conjunction with trade dress, i.e., labels, hangtags and packaging that use white or
silver lettering on a blue background. The fact that USPA adopted and used blue
packaging that mimics PRLs best-seller, POLO BLUE, for USPAs own fragrance
product is strong evidence of USPAs bad faith. Using barely visible tags on the
inseams of certain apparel items hardly provides a basis for excusing the wholesale
copying of PRLs trade dress for fragrances.
The district court considered USPAs arguments regarding its good faith
adoption of the USPA Mark in connection with fragrances and found them
unavailing.33
That determination was well reasoned and well supported by the
record evidence. It was far from clear error.
D.The District Courts Analysis of thePolaroidFactor RegardingSimilarity of the Marks Was Properly Conducted
USPA argues that the district courts analysis regarding the similarity of the
parties marks one of the required Polaroidfactors was improper because it
should have considered such factors as each partys use of its own marks on
apparel, the relationship between the fragrance and apparel markets and
33A-2313-A-2315 and A-2331-A-2346.
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consumers ability to distinguish [USPAs] marks from PRLs marks.34
USPA
provides no pertinent legal authority for that proposition. USPA again attempts to
use the Apparel Litigation preclusively despite the difference in the marks there
and here. Quite naturally, the jury in the Apparel Litigation made no separate
findings regarding the similarity of the marks there being considered. The jury
rendered a final verdict of non-infringement (with respect to three of the four
marks considered), without detail as to why. It may be that the jury found the
marks to be highly similar but that other factors weighed against a finding of
infringement on the facts of that case. We do not and cannot know. It would have
been improper for the district court here to defer its responsibility to conduct an
analysis of the similarity of the marks.
The district court conducted an appropriate and traditional analysis of the
similarity of the parties respective marks in appearance, sound and meaning to
determine whether the similarity between them is likely to cause confusion among
potential customers, taking into account the context in which the marks are
displayed and the totality of factors that could cause confusion. Louis Vuitton
Malletier v. Burlington Coat Factory Warehouse, 426 F.3d 532, 537 (2d Cir.
2005); Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. V. Steinway & Sons, 523
34Appellants Br. 33.
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F.2d 1331 (2d Cir. 1975). The marks at issue here will not be displayed side-by-
side in the marketplace.35
The question to be considered in the similarity analysis,
therefore, is not whether differences are easily discernable on simultaneous
viewing, but whether they are likely to be memorable enough to dispel confusion
on serial viewing. Louis Vuitton, 426 F.3d at 538. The analysis should consider
the products sizes, logos, typefaces, and package design and colors to determine
whether the overall impression in the relevant market context would lead
consumers to believe that the product emanates from the same source as products
bearing the senior users mark. Paco Sport, Ltd. v. Paco Rabanne Perfumes, 234
F.3d 1262 (2d Cir. 2000).
USPA argues that a proper analysis of the similarity between the marks
would have excluded consideration of the visual similarities between the marks,
but would have included each partys use of its own marks on apparel, the
relationship between the fragrance and apparel markets, and consumers ability to
distinguish the [USPAs] marks from PRLs marks.36
The district court
considered that argument and correctly found it unpersuasive because [n]o prior
decision addressed the marks at issue here in the fragrance market, and the
similarity of marks analysis focuses on the particular industry where the marks
35A-824:6-9; 44:21-45:13; A-1065:4-10, A-1068:14-1069:4.
36Appellants Br. 32-33.
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compete.37
Further, no prior decision addressed the similarity of the marks at
issue in this case in connection with any products, as the marks before the court in
1984 and 2006 differed from the USPA Mark at issue here. The district court held
that there was insufficient evidence to make a conclusion either way regarding
consumers ability to distinguish between the parties marks in the apparel
market.38
Despite USPAs assertion that there is no evidence of a difference
between the apparel and fragrance markets, witnesses for PRL and LOral
credibly testified to the differences between the markets, the customers, the
shopping experience and the manner and context in which the marks would be
encountered in the fragrance market versus the apparel market.39
Although it may not be proper for a fact finder to make a determination of
infringementbased solely on a side-by-side visual comparison of the marks at
issue, a visual comparison of the marks is not only acceptable but also expected
when conducting an analysis of the Polaroidfactor that expressly relates to the
similarities -- including the visual similarities -- between the marks. The district
court conducted such an analysis, considering the totality of factors that could
cause confusion, and described in detail the striking similarities between the marks
37A-2294-A-2295 (internal citation omitted).
38A-2301.
39A-814:11-A-815:3; Darsses Dep. 192:11-193:21.
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in content, perspective, proportion, typeface, design, color and connotation, taking
account of the logo, the word mark and the overall packaging. The courts
determination regarding the similarity of the marks here at issue was not clearly
erroneous.
E.The District Court Properly Concluded That Apparel andFragrances Constitute Separate Markets and That The Purported
Relatedness Between Them Was Irrelevant
The USPA Parties misunderstand the concept of related goods in the
trademark infringement context as well as the concepts of bridging the gap and
natural zone of expansion. Only a plaintiff (the senior user) may actually or
potentially bridge the gap or naturally expand, as a means of protecting its mark
against a defendant that uses an infringing mark on different goods. Those
concepts may not be invoked by a defendant (junior user). The reliance by USPA
on the cases it cites to support its contention that the right to expand into the
fragrance market is protected by its prior use (albeit of a different mark) in the
related apparel market is misplaced. Those cases all involve actions regarding
the use of a mark by a junior user in connection with goods other than those
offered by the senior user. In such cases, courts consider the relatedness of the
goods and/or markets to determine whether the senior users use on one category
of goods nonetheless is entitled to protection against a second-comers use on
similar but non-competitive goods, because the goods are so closely related that
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consumers are likely to believe that they emanate from the same source. 4
McCarthy on Trademarks and Unfair Competition 24:1, at 24-7-8 (4th ed. 2012).
The cases cited by the USPA Parties do not disagree. See Jaguar Cars Ltd. v.
Skandrani, 771 F. Supp. 1178 (S.D. Fla. 1991) (senior userof a strong mark may
protect mark against junior user, even were junior user first to use mark on goods
in issue). See also Scarves By Vera, Inc. v. Todo Imports Ltd., 544 F.2d 1167 (2d
Cir. 1976) (senior userprotected from use of mark by junior user on related
goods). Where the goods at issue are identical, as they are here, the concepts of
relatedness, bridging the gap (as to products) and zone of natural expansion do not
apply. They certainly cannot be used defensively by the junior user seeking to
enter a product category using an infringing mark, and USPA has not cited a single
case to the contrary.
Moreover, although USPA insists that its move into the fragrance market
was a natural extension of its retail licensing program, USPA Properties president,
Mr. Cummings, admitted at trial that he was not aware of a single sporting
association that licenses its trademark for use in connection with mens fragrances
(although many license their marks for use in connection with apparel).40
There is
nothing natural about a sports association for polo or any other sport
40A-1038:4-1039:6.
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extending its licensing program into the market for mens fragrances. Despite
USPAs insistence to the contrary, the market for and marketing of fragrances
differs greatly from the market for and marketing of apparel.41
Specifically, PRLs
Vice-President of Brand Management testified that apparel and fragrances are
different businesses, it is not just a matter of the price point being the same; that
people shop for apparel and fragrances differently; that the consumer base for PRL
fragrances is not the same as for PRL apparel; that the consumer experience of
shopping for fragrances is vastly different from the marketplace context of
shopping for apparel; and that the fragrance market presents greater opportunities
for consumer confusion and brand damage than the apparel market.42
USPAs reliance on Times Mirror Magazine, Inc. v. Field & Stream
Licenses Co.,294 F.3d 383 (2d Cir. 2002) is misplaced inasmuch as the court there
held that neitherparty was the senior user of the marks with respect to the goods at
issue and the question was which party had the right to expand its use into that
market. Here, there is no dispute that PRL is the senior user of the Polo Player
Logo and POLO mark in the fragrance market. USPA mistakenly frames the issue
as its being the senior user of the U.S. POLO ASSN. mark on apparel and states
that it has the right to expand its use of the mark into the related fragrance market
41Darsses Dep. 192:11-193:21.
42 Id.; Darsses Dep. 103:16-23.
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unless that use is specifically found to be confusing with PRLs existing marks.43
As noted, that is a misstatement of the law. First, where marks are not identical,
each party always is the senior user of its own specific mark. To refer to USPA
as the senior user of the U.S. POLO ASSN. mark on apparel is nonsensical
(particularly when PRL is indisputably the senior user of marks using the term
POLO in connection with apparel). Second, USPAs rights, whatever they may be,
to use certain marks in connection with other goods do not give it any rights to
expand its use of those marks to different goods where to do so would violate the
tradema