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Clarifying the law on “reverse confusion” claims in trademark cases, the 3rd U.S. Circuit Court of Appeals has once again ordered a lower court to study whether consumers of ladies’ swimwear are likely to be confused by two products that both use the word “Miracle” in their names. The court’s 61-page in A&H Sportswear Inc. v. Victoria’s Secret Stores Inc., authored by Chief U.S. Circuit Judge Edward R. Becker, is chock full of significant rulings and guidance on both “direct” and “reverse” confusion. Both sides can also claim significant victories. A&H Sportswear, which markets the “MiracleSuit,” won a revival of its reverse confusion claim under a newly articulated 10-part test that could shift enough factors in its favor that it could win an injunction. But Victoria’s Secret successfully defended its victory on the direct confusion claim in the lower court in which U.S. District Judge Franklin S. Van Antwerpen found that its “Miracle Bra” bathing suit was not likely to be confused with the MiracleSuit. In a previous round of litigation, Van Antwerpen had ordered Victoria’s Secret Stores Inc. to pay more than $1.1 million to A&H Sportswear after finding there was a “possibility” of confusion. But an en banc panel of the 3rd Circuit reversed, saying its own case law may have been confusing, but that it no longer endorsed any use of the “possibility of confusion” standard. On remand, Van Antwerpen faced another quandary since the 3rd Circuit’s case law seemed to have a gap. While the court offered a 10-part test in Interpace Corp. v. Lapp Inc. for deciding whether consumers would be confused by similar trademarks used for non-competing products, there was no test for competing products. Van Antwerpen created his own test — a modified version of the Lapp factors — and concluded that Victoria’s Secret had cured any defect adding a disclaimer to its product tags and catalogs that said its Miracle Bra bathing suit was not associated with the MiracleSuit. He also found that the constant use of its “housemark” — the Victoria’s Secret name — helped distinguish the two products. But on the reverse confusion claim, Van Antwerpen found that A&H wasn’t even entitled to have a Lapp-like test applied since it was unable to show “economic disparity.” On that point, the 3rd Circuit has now reversed, finding that the Lapp test changes considerably when applied in the reverse confusion context and that Van Antwerpen erred in holding that economic disparity is a threshold hurdle that a plaintiff must clear before proceeding with such a claim. On appeal, A&H argued that multi-factored tests are inapplicable in cases of competing goods. A&H’s attorney, Arthur H. Seidel of Philadelphia’s Seidel Gonda LaVorgna & Monaco, argued that with directly competing goods a court should examine only the similarity of the marks. Becker disagreed, saying, “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.” As an alternative argument, Seidel said Van Antwerpen erred by not precisely following the Lapp test and that, if he had, A&H would have prevailed on more of the factors. But Becker said the Lapp test was developed “only as a guide,” and wrote, “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.” The purpose of the test, Becker said, was to aid lower courts “in the navigation of the difficult course of determining a likelihood of confusion.” Although the Lapp decision itself said that, for competing goods, the court “need rarely look beyond the mark itself,” Becker said that comment may have been “an exercise in unjustified optimism.” Wrote Becker, “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.” But to make himself perfectly clear, Becker also said, “We do not hold that a District Court must use the factors. In fact, our precedents 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.” The factors, he said, “are meant to be tools, not hurdles.” Becker also rejected A&H’s argument that it rightfully should have won more of the factors and therefore won its direct confusion claim. “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,” Becker wrote. “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.” Becker affirmed Van Antwerpen’s approach, saying he “did not engage in a simplistic quantitative comparison, but accurately understood the role of the factors.” Frank J. Colucci and Richard P. Jacobson of New York’s Colucci & Umans, and H. Robert Fiebach of Philadelphia-based Cozen & O’Connor represented Victoria’s Secret.

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