United States Polo Ass'n v. PRL USA Holdings, Inc.

12-1346-cv
U.S. Polo Ass’n, Inc. v. PRL USA Holdings, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 11th day of February, two thousand thirteen.
PRESENT:
REENA RAGGI,
PETER W. HALL,
CHRISTOPHER F. DRONEY,
Circuit Judges.
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UNITED STATES POLO ASSOCIATION, INC., USPA
PROPERTIES, INC.,
Plaintiffs-Counter-Defendants-
Appellants,
v. No. 12-1346-cv
PRL USA HOLDINGS, INC.,
Defendant-Counter-Claimant-
Appellee,
L’OREAL USA, INC.,
Intervenor-Defendant-Counter-
Claimant-Appellee.
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APPEARING FOR APPELLANTS: GEORGE A. STAMBOULIDIS (Gerald J.
Ferguson, Tracy L. Cole, David J. Sheehan,
Thomas D. Warren, on the brief), Baker &
Hostetler LLP, New York, New York.
APPEARING FOR APPELLEE: WILLIAM ROBERT GOLDEN (John M.
Callagy, Matthew David Marcottee, on the brief),
Kelley Drye & Warren, LLP, New York, New
York.
APPEARING FOR INTERVENOR: ROBERT L. SHERMAN, Paul Hastings LLP,
New York, New York.
Appeal from a judgment of the United States District Court for the Southern District
of New York (Robert W. Sweet, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment entered on March 5, 2012, is AFFIRMED.
In this latest round of litigation under the Lanham Act, 15 U.S.C. § 1051 et seq., and
New York State common law, we again deal with claims and counterclaims by plaintiffs,
United States Polo Association, Inc., since 1890 the governing body for the sport of polo in
this country, and its licensing subsidiary, USPA Properties, Inc. (together, “USPA”); and
defendants PRL USA Holdings, Inc. and L’Oreal USA, Inc. (together “PRL”), respectively
the owner and exclusive licensee of trademarks of the Polo Ralph Lauren Corporation.
USPA here appeals from: (1) the dismissal of its action for a declaratory judgment approving
its use of its Double Horsemen mark, accompanied by the words “U.S. POLO ASSN.,”
“USPA,” and/or “1890,” in the sale of men’s fragrances; and (2) the entry of a permanent
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injunction in favor of defendants that precludes USPA’s use of these marks in connection
with fragrances and related products, as well as the use in connection with any product or
marks confusingly similar to PRL’s own marks. See U.S. Polo Ass’n, Inc. v. PRL USA
Holdings, Inc., 800 F. Supp. 2d 515 (S.D.N.Y. 2011).
USPA’s many challenges to the district court’s rulings effectively fall into four
categories: (1) USPA’s prior use of its Double Horsemen logo, as well as favorable rulings
in prior litigation in 1984 and 2006, preclude adverse findings relating to the factors set forth
in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961); (2) the apparel
and fragrance markets are so closely related that USPA’s adjudicated right to use its Double
Horsemen logo on apparel implies a right to extend its use to fragrances; (3) various flaws
infect the district court’s analysis of the parties’ survey evidence; and (4) the permanent
injunction is overbroad.
We review the district court’s findings as to individual Polaroid factors for clear error,
but we review its ultimate determinations of consumer confusion and infringement de novo.
See Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503, 1510 (2d Cir. 1997). We review the
district court’s grant of an injunction for abuse of discretion. See NML Capital, Ltd. v.
Republic of Argentina, 699 F.3d 246, 257 (2d Cir. 2012). In applying these principles here,
we assume the parties’ familiarity with the facts and the record of prior proceedings, which
we reference only as necessary to explain our decision to affirm.
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1. Prior Use and Preceding Litigations
a. The 1984 Litigation
USPA contends that the district court’s infringement finding runs counter to the 1984
decision in U.S. Polo Ass’n, Inc. v. Polo Fashions, Inc., No. 84 Civ 1142, 1984 WL 1309(S.D.N.Y. 1984) (“the 1984 Opinion”), which, according to USPA, resulted in an Order (the
“1984 Order”) that “affirmed [USPA’s] “right to use its name and a distinctive mounted polo
player symbol in connection with a retail licensing program.” Appellants’ Br. 25. The
argument fails because it mischaracterizes the results of the 1984 litigation. In its 1984
Opinion, the district court found infringement, see 1984 Opinion, 1984 WL 1309, at *10, and
broadly enjoined USPA from using its name or marks in a way likely to cause confusion with
those of PRL, 1984 Order at 4. Neither the 1984 Opinion nor the 1984 Order established any
right of USPA to use any name or logo without challenge from PRL; they simply clarified
that the Order did not itself bar USPA from conducting a retail licensing program using “a
mounted polo player . . . symbol which is distinctive from the [PRL mark] in its content and
perspective,” and that was not likely to cause confusion with PRL. 1984 Order at 5-6.
Whether a particular polo player symbol was sufficiently distinctive to avoid such confusion
was left as an open question for future determination.
Thus, nothing in the 1984 Opinion and Order precluded the district court from finding
infringement by USPA in the context of this case.
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b. The 2006 Apparel Litigation
The same conclusion obtains with respect to 2006 litigation over USPA’s use of its
mark and name on apparel. There, a jury found that USPA’s use of a solid version of its
Double Horsemen mark, unaccompanied by text, infringed PRL’s mark. At the same time,
however, the jury found no infringement in USPA’s use of that same version of the mark
accompanied by the letters “U.S.P.A.”; or of an outlined version of the mark, either alone or
accompanied by the letters “U.S.P.A.” See PRL USA Holdings, Inc. v. U.S. Polo Ass’n,
Inc., 520 F.3d 109, 110 (2d Cir. 2008) (affirming judgment of the district court). USPA
submits that these jury findings precluded the district court, in this case, from finding
similarity, bad faith, or confusion in its use of its outlined Double Horsemen logo
accompanied by the words “U.S. POLO ASSN.,” “USPA,” or “1890.”
We reject this argument because of the contextual difference between the 2006
litigation and this action, the former of which involved the apparel industry, while this
involves the men’s fragrance industry. As this court recognized in Brennan’s, Inc. v.
Brennan’s Rest., L.L.C., 360 F.3d 125, 133 (2d Cir. 2004), similarity analysis “focuses on
the particular industry where the marks compete.” Thus, a finding that there is not similarity
indicative of infringement in one industry does not, as a matter of law, preclude a finding of
similarity in another.
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c. Prior Use
USPA contends that the district court clearly erred in finding bad faith in light of
USPA’s use of its Double Horsemen logo and “U.S. POLO ASSN.” name to sell fragrances
in 1998, four years before PRL introduced “Polo Blue,” and its use of the Double Horsemen
logo on apparel since 2006. Neither argument is persuasive. The fact that USPA was
authorized to use its Double Horsemen logo in one industry—apparel—does not necessarily
mean that it acted with good faith in using the same marks here at issue in a different
industry—men’s fragrances. Logically, nothing about USPA’s legitimate prior use precluded
the district court from concluding that the circumstances of USPA’s move into the fragrance
industry demonstrated that “the defendant adopted its mark with the intention of capitalizing
on plaintiff’s reputation and goodwill and any confusion between his and the senior user’s
product”—the hallmarks of bad faith. Nora Beverages, Inc. v. Perrier Grp. of Am., Inc.
(internal quotation marks omitted), 269 F.3d 114, 124 (2d Cir. 2001) (internal quotation
marks omitted). Further, while Polo Blue had not yet been introduced in 1998, PRL had been
selling other fragrances bearing its polo player logo since 1978. Moreover, in assessing
USPA’s good faith, the district court was entitled to consider that it was only in 2009, seven
years after PRL introduced Polo Blue, that USPA designed a men’s fragrance using the
marks at issue on a dark blue package.
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Finally, the absence of evidence of confusion between USPA’s and PRL’s marks in
the apparel industry does not, as a matter of law, compel a finding that there would be no
confusion between the marks in the fragrance industry. We thus identify no clear error in the
district court’s determination that “[l]ack of confusion as to apparel may or may not be
indicative of lack of confusion as to fragrances.” U.S. Polo Ass’n, Inc. v. PRL USA
Holdings, Inc., 800 F. Supp. 2d at 532.
2. Similarity of Apparel and Fragrance Markets
USPA contends that because of similarities in the apparel and fragrance markets, its
history of selling branded apparel gives rise to a “right to expand its use of the mark into the
related fragrance market,” as a “natural progression.” Appellants’ Br. 34–35. USPA cites
no supporting authority for its argument, which in any case fails to address the relevant issue:
whether USPA’s challenged fragrance packaging was likely to cause confusion with PRL’s
fragrances. Cf. Physicians Formula Cosmetics, Inc. v. W. Cabot Cosmetics, Inc., 857 F.2d
80, 82 n.1 (2d Cir. 1988) (noting that “expansion of business doctrine” does not protect even
senior user when another user has long been active in field to which expansion is sought).
Times Mirror Magazines, Inc. v. Field & Stream Licenses Co., 294 F.3d 383 (2d Cir. 2002),
cited by USPA, does not support its position. There, two longtime rightful users of a single
mark—the name “Field and Stream”—sought to enter new markets that, previously, “neither
had attempted to enter.” Id. at 392. Here, USPA, already enjoined from using marks
confusingly similar to those of PRL, seeks to enter a market in which PRL is well
established.
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In sum, we identify no error in the district court’s rejection of USPA’s argument that
its lawful use of its Double Horsemen logo and word marks in the apparel market afforded
it a right to use these marks to enter the fragrance market.
3. Surveys
In reviewing surveys conducted by both parties on the likelihood of confusion from
USPA’s use of its Double Horsemen logo and word marks to sell men’s fragrances, the
district court afforded no weight to USPA’s survey evidence, in part because its control
marks included the word “polo,” and, in one case, a mounted polo player image. Meanwhile,
the district court found PRL’s survey evidence, based on a control that did not reference the
sport of polo, “suggestive of actual confusion.” U.S. Polo Ass’n, Inc. v. PRL USA Holdings,
Inc., 800 F. Supp. 2d 515, 536 (S.D.N.Y. 2011). Insofar as USPA challenges both
determinations, we identify no abuse of discretion in the district court’s determination that
control marks had to omit the word “polo” to be reliable. See generally Shari Seidman
Diamond, Reference Guide on Survey Research, in Reference Manual on Scientific Evidence
229, 258 (Federal Judicial Center ed., 2d ed. 2000) (stating that control should “share[] as
many characteristics with the experimental stimulus as possible, with the key exception of
the characteristic whose influence is being assessed”). USPA contends that the word “polo”
was not one of the elements being assessed because the sport itself is not trademarked, and
the 1984 Order did not bar USPA’s use of the word in a non-infringing manner. We are not
persuaded. USPA’s right to brand a fragrance with its logo, accompanied by the word
“polo”—the same word long highlighted by PRL to sell its fragrances—is one of the critical
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issues for determination in this litigation. Indeed, to determine whether USPA had violated
the 1984 Order, the district court had to determine whether USPA had unduly emphasized
the word “polo” in its trade dress. Under these circumstances, the district court did not
clearly err in identifying the word “polo” as one of the “characteristic[s] whose influence is
being assessed” and in discounting a USPA survey that had not excluded the word from its
control mark.
USPA further complains that one of PRL’s control marks, the “Mustang Grille” logo,
was too well known to serve as an effective control. While the challenged logo may be well
known as an automobile mark, USPA does not contend that it is well known in the fragrance
field. We therefore identify no clear error in the district court’s decision to rely on a study
using the mark as a control with respect to fragrances.
4. Permanent Injunction
USPA faults the district court for applying a presumption of irreparable harm in
deciding to enter a permanent injunction, and for ordering an injunction that sweeps more
broadly than its findings warrant, and that is vague and therefore overbroad in its
proscriptions. These complaints are meritless.
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a. Irreparable Harm
We need not here decide whether a presumption of irreparable harm from trademark
infringement can apply in light of eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006),
and Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010), because no such presumption was
applied here. Rather, the district court found that PRL would be irreparably harmed by
ceding to USPA control over its reputation and goodwill. See U.S. Polo Ass'n, Inc. v. PRL
USA Holdings, Inc., 800 F. Supp. 2d at 541. While a similar finding might be made in many
infringement cases, it is a factual finding nonetheless, and not simply the product of a legal
presumption. Accordingly, we identify no abuse of discretion in the district court’s
irreparable-harm finding.
b. Scope of the Injunction
USPA contends that the permanent injunction sweeps too broadly because the
challenged designs all featured some combination of the Double Horsemen logo and the
phrase “U.S. POLO ASSN.” or “USPA,” while the injunction forbids, not only such
combinations, but also the use of the Double Horsemen logo or the word “POLO” alone in
connection with fragrances. The argument fails in light of USPA’s history of repeated
infringement and the district court’s finding of bad faith. Indeed, affirming the judgment of
the district court in the 2006 apparel litigation, we observed that “[a]n obligation on the part
of a previously adjudicated infringer to maintain a safe distance from infringing the
plaintiff’s marks has been found to serve a useful purpose in fashioning injunctions based on
a finding of infringement, especially where the infringement was abusive or in bad faith.”
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PRL USA Holdings, Inc. v. U.S. Polo Ass’n, Inc., 520 F.3d at 117 (internal citations
omitted). The breadth of the challenged injunction is particularly warranted given that the
1984 Order had explicitly barred USPA’s confusing use of either the word “polo” or any
mark confusingly similar to the PRL logo, and the district court found that USPA had
violated that injunction. See U.S. Polo Ass’n, Inc. v. PRL USA Holdings, Inc., 800 F. Supp.
2d at 527. This case presents no concerns akin to those raised in Starter Corp. v. Converse,
Inc., 170 F.3d 286 (2d Cir. 1999), where an injunction covered an entire market that was not
the one in which the infringing mark was used, and prohibited use of the mark for a category
of goods that had been judicially admitted not to be at issue, see id. at 300. Here, the
injunction pertains to use of the Double Horsemen logo and the word “polo” in the fragrance
market, the focus of this litigation, as well as closely related fields such as cosmetics. To the
extent it reaches any further, it merely tracks the language of the 1984 Order, to which USPA
was already subject. Moreover, the injunction does not impede USPA’s use of its outlined
Double Horsemen mark on apparel, which was found non-infringing in the 2006 litigation,
a determination that has issue-preclusive effect here.
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5. Conclusion
We have considered plaintiffs’ remaining arguments and conclude that they are
without merit. Accordingly, the district court’s judgment of dismissal and entry of a
permanent injunction are AFFIRMED. USPA’s motion to supplement the record on appeal
is DENIED, because the material that it seeks to add was neither before the district court at
the time of the decision below, nor even in existence at that time.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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