A & H Sportswear Co. v. Victoria's Secret Stores

57 F.Supp.2d 155

A & H SPORTSWEAR CO., INC. and Mainstream Swimsuits, Inc., Plaintiffs and Counterclaim-Defendants, v. VICTORIA'S SECRET STORES, INC., and Victoria's Secret Catalogue, Inc., Defendants and Counterclaimants.

No. CIV. 94-7408.

United States District Court, E.D. Pennsylvania.

July 29, 1999.

COPYRIGHT MATERIAL OMITTED

Arthur H. Seidel, Stephen J. Meyers, Ronald N. Weiders, Philadelphia, PA, Norman Seidel, Easton, PA, for plaintiffs.

Frank J. Colucci, Richard P. Jacobson, New York City, Lillian E. Benedict, David I. Bookspan, H. Robert Feibach, Philadelphia, PA, for defendants.

DECISION AND ORDER

VAN ANTWERPEN, District Judge.

I. BACKGROUND

This action was filed pursuant to 15 U.S.C. §§ 1114, 1125(a) ("Lanham Act") and the Pennsylvania Antidilution Law, 54 Pa.C.S.A. § 1124. Plaintiffs, A & H Sportswear Co., Inc. and Mainstream Swimsuits (together "A & H"), allege that Defendants, Victoria's Secret Stores, Inc. ("VS Stores") and Victoria's Secret Catalogue, Inc. ("VS Catalogue") (together "VS"), are infringing their trademark. Plaintiffs specifically claim that their MIRACLESUIT trademark on swimwear is being infringed by THE MIRACLE BRA line of lingerie and swimwear products, made by the Defendants. In our order of October 20, 1995, we granted Defendants' motion for separate trials on the issues of liability and damages.

From October 25 to November 3, 1995, we held a two-week non-jury trial to determine issues of liability. We issued a decision on May 24, 1996, pursuant to Fed. R.Civ.P. 52(a), concluding that: (1) Plaintiffs failed to show a likelihood of confusion with respect to Defendants' use of its mark on lingerie, but (2) Plaintiffs established a possibility of confusion necessary for relief with respect to Defendants' use of mark on swimwear.¹ See A & H Sportswear Inc. v. Victoria's Secret Stores, Inc., 926 F.Supp. 1233 (E.D.Pa.1996) ("A & H Sportswear I"). We also made extensive Findings of Fact pursuant to Fed.R.Civ.P. 52(a), based on numerous trial exhibits, trial depositions, witness testimony, some of which was filed under seal due to the commercially sensitive nature of the information. See id. at 1235-1254.²

After determining that Plaintiffs had met their burden of establishing a possibility of confusion between THE MIRACLE BRA and the MIRACLESUIT trademarks in the swimwear market, we proceeded to determine the appropriate relief for the Plaintiffs. We found that Plaintiffs were entitled to: (1) monetary relief in the form of a reasonable royalty on Defendants' sales; and (2) an injunction requiring VS not to use THE MIRACLE BRA trademark with respect to swimwear unless it used a disclaimer and paid the swimwear manufacturer a periodic reasonable royalty. See A & H Sportswear Inc. v. Victoria's Secret Stores, 967 F.Supp. 1457, 1482-83 (E.D.Pa.1997) ("A & H Sportswear II"). We again made numerous Findings of Fact that were relevant for the trial on the issue of damages. See id. at 1462-67.³

Defendants appealed our judgment that THE MIRACLE BRA swimwear infringes Defendants' MIRACLESUIT trademark, arguing that this court applied an erroneous standard of law. Plaintiffs filed a cross-appeal contending that this court clearly erred in failing to find a likelihood of confusion between THE MIRACLE BRA mark on lingerie and Plaintiffs' MIRACLESUIT mark. With respect to the issue raised on Plaintiffs' cross-appeal, the Third Circuit affirmed this court's decision that Plaintiffs failed to show that there was a likelihood of confusion between THE MIRACLE BRA mark on lingerie and the MIRACLESUIT mark.⁴ See A&H Sportwear Inc. v. Victoria's Secret Stores, 166 F.3d 191 (3d Cir.1999) ("A & H Sportswear III").

However, with respect to the issue raised by Defendants' appeal, the Third Circuit reversed our decision finding that there is a possibility of confusion between THE MIRACLE BRA mark on swimwear and the MIRACLESUIT mark. See A&H Sportswear Co. v. Victoria's Secret Stores, 166 F.3d 197 (3d Cir.1999) ("A & H Sportswear IV"). The Third Circuit held that the possibility of confusion standard applied by this court was clearly erroneous when examining trademark infringement for directly competing goods. See id. at 206. The Third Circuit then remanded this case to our court with the instruction that we must "conduct the appropriate analysis of the likelihood of confusion under the standards set by the Lanham Act and in the relevant precedent." Id. Moreover, the Third Circuit stated "[i]f the District Court believes that such a finding can be made based on the record before it, it is free to do so." Id. at 210.

By our order dated March 31, 1999, we requested that both parties submit further briefing on the issue of liability only. We declined to allow the parties to brief on the issue of damages at that time.⁵ See Order 3/31/99. Presently before the court are:

1. Plaintiffs' Memorandum Concerning: (1) The Appropriate Analysis and the Relevant Precedent Under the Likelihood of Confusion Standard of the Lanham Act for Directly Competing Goods; and (2) Whether the Interaction Between THE MIRACLE BRA for Swimwear and the MIRACLESUIT for Swimwear Implicates the Doctrine of Reverse Confusion filed on April 21, 1999; and

2. Victoria's Secret's Memorandum upon Remand Demonstrating No Likelihood of Confusion, Either Forward or Reverse, Exists Between THE MIRACLE BRA and MIRACLESUIT in the Swimwear Market filed on May 18, 1999.

After reviewing the record before us, we find that Plaintiffs have failed to show a likelihood of confusion between their MIRACLESUIT mark and the Defendants' THE MIRACLE BRA mark as applied to swimwear. Furthermore, we find that there is no likelihood of reverse confusion between the MIRACLESUIT mark and THE MIRACLE BRA mark because the interaction of the two marks does not implicate the doctrine of reverse confusion.

II. FACTS

On remand, we were given the option of making a finding on the likelihood of confusion issue either based on the record before us or by allowing further discovery in this case. See A & H Sportswear IV, 166 F.3d at 210. The choice was left to the sound discretion of this court. Id. We determined that additional discovery is not necessary because the record contains extensive findings of fact based on numerous trial exhibits, trial depositions and witnesses. Subsequently, we denied a request by the Plaintiffs to supplement the record by further financial discovery. See Order 3/31/99.

As the facts have been presented in multiple decisions, see, e.g., A & H Sportswear I, 926 F.Supp. at 1235-54; A & H Sportswear II, 967 F.Supp. at 1462-67, we will presently provide only a brief overview of the facts in the record. Plaintiffs, A &amp H, are a corporation organized under the laws of Pennsylvania. Facts I at ¶ 1. A & H manufactures women's swimwear, including the MIRACLESUIT swimsuit.⁶ See id. A & H's MIRACLESUIT product line is mostly one-piece swimsuits which offer body control in order to make the wearer look slimmer. See id. at ¶¶ 3, 14. The MIRACLESUIT construction emphasizes horizontal control and vertical stretch, and all swimsuits have lower torso control. See id. at ¶¶ 16, 47. A & H's swimsuits also incorporate a variety of bras, including push-up bras, underwires, padded bras, shaping bras, and unconstructed bras. See id. at ¶¶ 3, 14. A & H's MIRACLESUIT has a hang-tag bearing the words "MIRACLESUIT® by SwimShaper® — Look ten pounds lighter in 10 seconds. The ten seconds it takes to slip it on." See id. at ¶¶ 3, 55.

Defendant, VS Stores, sells lingerie, swimwear, and assorted intimate apparel for women in nationwide retail stores. See id. at ¶ 6. Defendant, VS Catalogue, is a mail-order business that sells a similar yet broader range of products than VS Stores. See id. at ¶ 6. Both VS Stores and VS Catalogues have offered THE MIRACLE BRA as a one-piece swimsuit and a two-piece bikini.⁷ See id. at ¶ 33. While a few of THE MIRACLE BRA swimsuits have lower torso control, the primary feature of such swimsuits is cleavage enhancement by angled underwires, push-up pads, and adjustable pads. See id. at ¶¶ 15, 47. THE MIRACLE BRA is identified with a hang-tag and/or sewn-in label bearing the THE MIRACLE BRA name and Victoria's Secret housemark. See id. at ¶ 19.

A & H received its federal trademark registration of the MIRACLESUIT mark for swimwear on October 27, 1992. See id. at ¶¶ 1, 21. On December 9, 1992, VS Stores' filed an application for THE MIRACLE BRA mark for bras. See id. at ¶ 25. During the trademark search conducted by VS Stores' counsel, the search revealed numerous "miracle" trademarks, including A & H's MIRACLESUIT mark. See id. at ¶ 24. VS Stores received its registration for THE MIRACLE BRA bra on August 19, 1994. See id. at ¶ 25. VS Stores has generally assumed a primary role in naming new products and no one who played a role in approving THE MIRACLE BRA name had heard of the MIRACLESUIT or A & H.⁸ See id. at ¶ 26.

In 1994, Defendants chose to develop a swimwear product with THE MIRACLE BRA name. The idea to put THE MIRACLE BRA trademark and feature (enhanced cleavage) into a bikini first came from VS Catalogue as a direct result of THE MIRACLE BRA's success. See id. at ¶ 33. Applying THE MIRACLE BRA mark to swimwear was a "natural" extension of the use of the mark on bras. See id. at ¶ 45. VS Stores termed the decision to broaden the use of the name THE MIRACLE BRA into swimwear as "instinctive" — a way to expose the enhanced-cleavage attribute to potential customers in as many ways as possible.⁹ See id. at ¶ 42. Thus, in the latter half of 1994, VS Stores applied for a trademark registration for THE MIRACLE BRA for "swimsuits bathing suits, and bikinis." See id. at ¶¶ 34, 48.¹⁰ VS Stores' first use of THE MIRACLE BRA mark with regard to swimwear occurred as a test in ten stores in November 1994. See id. at ¶ 34. VS Catalogue's first marketing of THE MIRACLE BRA bikini was in November of 1994. See id. at ¶ 33.

Neither VS...