U.S. Polo Ass'n v. PRL USA Holdings, No. 13-1038 (2d Cir. 2015)

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Justia Opinion Summary

USPA appealed from a contempt order finding USPA in violation of a permanent injunction. The district court held that USPA's Double Horsemen Mark on eyewear products was confusingly similar to the logo used by PRL. The district court concluded that the Fragrance Injunction barred use of the Double Horsemen Mark in every market but that for apparel. The court, however, agreed with USPA that the underlying injunction did not enjoin all uses of the mark. Because of the often unpredictable results of market-by-market analysis, a finding that the Double Horsemen Mark is, when used on eyewear, confusingly similar to PRL’s marks, while sufficient to find liability in an infringement proceeding, is not sufficient to support a contempt finding. The fact that the Apparel Litigation does not shield USPA’s use of a Double Horsemen Mark on eyeglasses from an infringement finding does not, without more, render it liable for infringement in that and all other markets save for apparel. Therefore, the court vacated the contempt order and remanded for further proceedings.

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13-1038-cv(L) U.S. Polo Ass’n, Inc. v. PRL USA Holdings, Inc. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2013 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (Argued: February 19, 2014 Decided: May 13, 2015) Docket Nos. 13-1038-cv(L), 13-1130-cv(CON) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - UNITED STATES POLO ASSOCIATION, INC., USPA PROPERTIES, INC., Plaintiffs-Counter-Defendants-Appellants, JRA TRADEMARK COMPANY, LTD., Intervenor-Plaintiff-Appellant, v. PRL USA HOLDINGS, INC., L’OREAL USA, INC., Defendants-Counter-Claimants-Appellees. - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - B e f o r e: KEARSE, WINTER, and WESLEY, Circuit Judges. Appeal from a contempt judgment entered in the United States 26 District Court for the Southern District of New York (Robert W. 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Sweet, Judge). We vacate and remand. KYLE C. BISCEGLIE (Matteo J. Rosselli, on the brief), Olshan Frome Wolosky LLP, New York, NY, for Plaintiffs-Counter-DefendantsAppellants. MICHAEL S. SOMMER (Jessica L. Margolis & Scott D. Tenley, on the brief), Wilson Sonsini Goodrich & Rosati, P.C., New York, NY, for Intervenor-Plaintiff-Appellant. 1 1 2 3 4 5 6 7 8 9 10 JOHN M. CALLAGY (William R. Golden, Jr., Andrea L. Calvaruso, Taraneh J. Marciano, on the brief), Kelley Drye & Warren LLP, New York, NY, for Defendants-Counter-ClaimantsAppellees. WINTER, Circuit Judge: This appeal is the latest chapter in a now over-30-year 11 dispute involving trademarks relating to the sport of polo used 12 on consumer goods. 13 Properties, Inc. (together, “USPA”) and USPA’s licensee, JRA 14 Trademark Co., appeal from Judge Sweet’s order of contempt 15 finding USPA in violation of a permanent injunction. 16 held that appellants’ logo on eyewear products was confusingly 17 similar to the logo used by appellees PRL USA Holdings, Inc. and 18 L’Oreal USA, Inc. (together, “PRL”) on PRL’s eyewear products. 19 USPA argues that the underlying injunction did not enjoin all 20 uses of the mark. 21 remand for further proceedings. United States Polo Association, Inc. and USPA The court We agree and vacate the contempt order and 22 BACKGROUND 23 USPA is the governing body of the sport of polo but also 24 markets certain consumer goods, often in competition with PRL. 25 PRL owns the trademark rights and exclusive licenses for the Polo 26 Ralph Lauren brand, which includes the “Polo Player Logo” –- an 27 image depicting a mounted polo player with a raised mallet -- and 28 the “POLO” word mark. 29 2 1 a) 2 The 1984 Injunction The conclusion of the opening litigation occurred in 1984, 3 when, after a bench trial, Judge Sand issued an injunction 4 against USPA. 5 Civ. 1142 (LBS), 1984 WL 1309 (S.D.N.Y. Dec. 6, 1984) (“1984 6 Injunction”). 7 from “using any of the [PRL marks] or any name or mark or symbol 8 which is confusingly similar thereto, in connection with the sale 9 . . . of any goods or the rendering of any services[.]” U.S. Polo Ass’n v. Polo Fashions, Inc., No. 84 The 1984 Injunction prohibited USPA, inter alia, U.S. 10 Polo Ass’n v. PRL USA Holdings, Inc., No. 09 Civ. 9476, 2013 WL 11 837565, at *1 (S.D.N.Y. Mar. 6, 2013). 12 applied to all markets, the term “confusingly similar” was not a 13 bright line. 14 discussed infra, its meaning turned on a comparison of competing 15 logos and the words associated with them, see PRL USA Holdings, 16 Inc. v. U.S. Polo Ass’n, 520 F.3d 109 (2d Cir. 2008), and varied 17 with the nature of the various markets in which the logos and 18 words are used, see U.S. Polo Ass’n v. PRL USA Holdings, Inc., 19 511 F. App’x 81 (2d Cir. 2013) (summary order). 20 b) 21 While the 1984 Injunction Rather, as amplified in subsequent litigation, The Apparel Litigation The mark at issue in this appeal is styled the “Double 22 Horsemen Mark.” It depicts two mounted polo players vying for a 23 ball. 24 1996, PRL brought an action seeking to enjoin its use on a 25 variety of products (“Apparel Litigation”). When USPA began using four variations of this mark in 3 1 In 2003, the parties resolved most of the issues in a 2 settlement agreement involving a number of USPA logos and word 3 marks. 4 varieties of the Double Horsemen Mark infringed PRL’s marks. 5 After a three-week trial, the jury concluded that three of four 6 Double Horsemen Marks, see Note 1 infra, did not infringe PRL’s 7 marks in the markets for apparel, leather goods, and watches. 8 PRL USA Holdings, Inc. v. U.S. Polo Ass’n, No. 99-cv-10199(GDB), 9 2006 WL 1881744, at *3 (S.D.N.Y. July 7, 2006). However, the parties went to trial on whether four 10 PRL USA Holdings, Inc., 520 F.3d at 119. 11 c) We affirmed. 12 The Fragrance Litigation and Injunction After conclusion of the Apparel Litigation, USPA continued 13 using the Double Horsemen Mark1 on a variety of products. 14 2009, USPA expanded its marketing into fragrance products. 15 failed negotiations with PRL, USPA sought a declaratory judgment 16 that, inter alia, the Double Horsemen Mark did not violate 17 Sections 43(a) and (c) of the Lanham Act, 15 U.S.C. §§ 1125(a), 18 (c), when used in connection with its fragrance products 19 (“Fragrance Litigation”). 20 Inc., brought trademark counterclaims for infringement and sought 21 an injunction against the use of the Double Horsemen Mark, the In After PRL and its licensee, L’Oreal USA, 1 The “Double Horsemen Mark” hereinafter refers only to the three of four Double Horsemen Marks that the Apparel Litigation jury found did not infringe on PRL’s marks. See PRL USA Holdings, Inc., 2006 WL 1881744, at *1. 4 1 word mark, “U.S. POLO ASSN,” and “1890" (the year USPA was 2 founded) on “fragrance or cosmetics products.” 3 After a bench trial, Judge Sweet rejected USPA’s claims, 4 holding that using the Double Horsemen Mark on fragrance products 5 violated PRL’s trademark rights. 6 Holdings, Inc., 800 F. Supp. 2d 515, 542 (S.D.N.Y. 2011). 7 court held that USPA’s favorable verdict in the Apparel 8 Litigation did not dictate the outcome in the Fragrance 9 Litigation because the apparel decision did not “address[] the 10 U.S. Polo Ass’n v. PRL USA marks at issue here in the fragrance market.” The Id. at 529. 11 In March 2012, the district court entered a permanent 12 injunction enjoining USPA from using the Double Horsemen Mark on 13 fragrances and related products (“Fragrance Injunction”). 14 Paragraph 3, the basis of the district court’s contempt finding 15 in the present matter, enjoined USPA from: 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 a. Using the Double Horsemen Mark . . . alone or in combination with any name, symbol, device, or other word(s) in connection with the advertising, promotion, offering for sale or sale of fragrances or related products such as cosmetics, personal care products and beauty products; b. Using the word “POLO” alone or in combination with any name, symbol, device or other word(s) in connection with the advertising, promotion, offering for sale or sale of fragrances or related products such as cosmetics, personal care products and beauty products; 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 c. Using the PRL marks or any other name or mark, including the image of one or more mounted polo players, that constitutes a colorable imitation of or is confusingly similar to PRL’s Polo Player Logo . . . or “POLO” word mark in connection with the sale or offering for sale of any goods or rendering of any services; U.S. Polo Ass’n, 2013 WL 837565, at *4; see also U.S. Polo Ass’n 22 v. PRL USA Holdings, Inc., No. 09 Civ. 9476, 2012 WL 697137, at 23 4-5 (S.D.N.Y. Mar. 5, 2012). USPA appealed the injunction, and 24 we affirmed by summary order. U.S. Polo Ass’n, 511 F. App’x at 25 82. 26 precluded the injunction. 27 the ground that the issue of confusing similarity regarding 28 USPA’s use of the Double Horsemen Mark was market-specific. 29 at 83-84. 30 Injunction’s terms were overbroad, in part because of the 31 district court’s finding of bad faith which we declined to 32 overturn, but also because Paragraph 3(c), which applies to all 33 markets, merely tracked the 1984 Injunction, to which USPA was 34 already subject. d. Using for any commercial purpose whatsoever any symbol, logo, trade name, trademark, or trade dress that which is calculated to or has the effect of representing that the products or services of or licensed by the USPA Parties are associated with, sponsored, endorsed, or authorized by, or are in any way connected or associated with the PRL Parties or any entity affiliated with them. On its appeal, USPA argued that the Apparel Litigation However, we rejected that argument on Id. We also rejected USPA’s argument that the Fragrance Id. at 86. 6 1 2 d) The Contempt Order Between 2009 and 2012, USPA sold nearly one million pairs of 3 sunglasses bearing the Double Horsemen Mark. 4 moved for an order of contempt, claiming that USPA violated both 5 the 1984 Injunction and the Fragrance Injunction by its use of 6 the Double Horsemen Mark on eyewear. 7 contempt order based on its finding that there was clear and 8 convincing evidence that USPA violated Paragraphs 3(c) and (d) of 9 the Fragrance Injunction. 10 11 In August 2012, PRL The district court issued a U.S. Polo Ass’n, 2013 WL 837565, at *9-14.2 The district court held that: (i) Paragraph 3(c) of the 12 Fragrance Injunction clearly and unambiguously applied to all 13 markets, id. at *9-12; (ii) PRL proved by clear and convincing 14 evidence that “the Double Horsemen Mark is a ‘colorable 15 imitation’ or is ‘confusingly similar’ to PRL’s Polo Player 16 Logo,” id. at *12; and (iii) USPA did not diligently comply with 17 the Fragrance Injunction, id. at *13. 18 conclusions, the court declined to engage in a market-specific 19 analysis of whether use of the Double Horsemen Mark in eyewear 20 was confusingly similar to PRL’s use of its marks in that market. 21 In relying on Paragraph 3(c) of the Fragrance Injunction, the 22 court held that a market-by-market analysis was inappropriate in 2 In reaching these The district court also granted JRA Trademark’s motion to intervene, 2013 WL 837565, at *7-8, and declined to decide whether USPA was in contempt of the 1984 Injunction, id. at *14. 7 1 the context of a motion for contempt. 2 our decision in Wella Corp. v. Wella Graphics, Inc., 37 F.3d 46, 3 48 (2d Cir. 1994) (holding that the district court erred in 4 considering the Polaroid factors, Polaroid Corp. v. Polarad 5 Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961), in making its 6 contempt determination).3 7 This ruling was based on Finally, because PRL had been on notice of USPA’s use of the 8 Double Horsemen Mark in eyewear for at least two years prior to 9 its motion for a contempt judgment, the court awarded PRL only 10 prospective relief -- that is, “future profits of any sales of 11 sunglasses containing the Double Horsemen Mark sixty days 12 following the [court’s] order.” 13 at *15. 14 15 U.S. Polo Ass’n, 2013 WL 837565, DISCUSSION We review a contempt order with a “more exacting” version of 16 the abuse-of-discretion standard. Perez v. Danbury Hosp., 347 17 F.3d 419, 423 (2d Cir. 2003). 18 district court must find that the alleged contemnor had notice of 19 the underlying order, that the terms of the order were clear and 20 unambiguous, and that proof of noncompliance was clear and Before issuing a contempt order, a 3 We note that the Polaroid test is not strictly in issue here because Polaroid involved a plaintiff alleging trademark infringement within a market the plaintiff had not yet entered. Rather, USPA and PRL appear to have been competing head-to-head in the same markets, similar to the parties in Brennan’s Inc. v. Brennan’s Rest., L.L.C., 360 F.3d 125, 133 (2d Cir. 2004) (“Because the ultimate issue is the likelihood of confusion, analysis focuses on the particular industry where the marks compete.”) (emphasis added). 8 1 convincing. Perfect Fit Indus. v. Acme Quilting Co., Inc., 646 2 F.2d 800, 808 (2d Cir. 1981). 3 factual determinations are reviewed for clear error, but 4 questions of law, including interpretation of the order, are 5 reviewed de novo. 6 New York, 558 F.3d 159, 164 (2d Cir. 2009). The district court’s underlying Latino Officers Ass’n of N.Y., Inc. v. City of 7 Central to this appeal is whether the district court’s 8 finding of a violation of the Fragrance Injunction by USPA’s use 9 of the Double Horsemen Mark on eyewear required application of 10 11 market-specific standards. Our resolution of what conduct is barred by the Fragrance 12 Injunction and of whether USPA engaged in such conduct requires 13 scrutiny of the history of the parties’ litigation. 14 fact in this history is that, after entry of the 1984 Injunction, 15 a jury in the Apparel Litigation found the Double Horsemen Mark 16 to be non-infringing -- not “confusingly similar” to, or a 17 “colorable imitation” of, PRL’s marks -- when used as a logo in 18 marketing apparel, leather goods, and watches. 19 clearly indicated at the very least that use of the Double 20 Horsemen Mark is non-infringing in some markets. 21 Fragrance Litigation, the district court viewed the verdict in 22 the Apparel Litigation as not binding because of the differences 23 between the apparel and fragrance/cosmetic markets. 24 and affirmed the Fragrance Injunction. 25 App’x at 82. 9 A critical This verdict In the We agreed U.S. Polo Ass’n, 511 F. 1 However, in the present matter -- the contempt proceeding 2 based on the Fragrance Injunction -- the district court concluded 3 that the Fragrance Injunction barred use of the Double Horsemen 4 Mark in every market but that for apparel. 5 WL 837565, at *10, 12. 6 that the Apparel Litigation does not shield USPA’s use of a 7 Double Horsemen Mark on eyeglasses from an infringement finding 8 does not, without more, render it liable for infringement in that 9 and all other markets save for apparel. U.S. Polo Ass’n, 2013 We disagree with that ruling. The fact Indeed, our affirmance 10 of the Fragrance Injunction, in holding that infringement in one 11 industry does not “as a matter of law, preclude a finding of 12 similarity in another,” U.S. Polo Ass’n, 511 F. App’x at 83, 13 stated that a market-by-market analysis is needed. Id. 14 To be sure, Paragraph 3(c) of the Fragrance Injunction 15 applies to all markets, but the language in question merely 16 repeats that of the 1984 Injunction. 17 holding in affirming the Fragrance Injunction states, requires a 18 market-by-market analysis regarding confusing similarity. 19 86 (noting that the Fragrance Injunction pertains to the 20 fragrance market and closely related fields; “[t]o the extent it 21 reaches any further, it merely tracks the language of the 1984" 22 Injunction). 23 24 That Injunction, as our Given the present record, it is not apparent that the differences between the fragrance/cosmetic and eyeglass 10 Id. at 1 industries are not as great as the differences between the 2 apparel and fragrance/cosmetic industries. 3 without an evidentiary record demonstrating otherwise, the 4 eyeglass and apparel industries seem closer to each other than 5 either is to the fragrance/cosmetic market. 6 in contempt, the district court declined to apply a market- 7 specific test. 8 9 Indeed, at least But, in holding USPA In holding that the Fragrance Injunction was violated, the district court explicitly rejected USPA’s argument that the order 10 “is limited to fragrance[/cosmetic] products . . . and proof of 11 confusion.” 12 rejection is not consistent with our decision affirming the 13 Fragrance Injunction or with the arguments that PRL made on that 14 appeal. 15 or more mounted polo players, that constitute a colorable 16 imitation of or is confusingly similar to PRL’s Polo Player logo 17 . . . in connection with the sale . . . of any goods, . . . .” 18 However, as noted, that language merely tracks the 1984 19 Injunction which, as explained earlier, does not bar use of the 20 Double Horsemen Mark in all markets. 21 Injunction was challenged by USPA on its appeal, PRL’s brief 22 emphasized over and over again that the Fragrance Injunction was 23 limited to the fragrance market, Brief for Defendant-Counter- 24 Claimant-Appellee at 15, 19, 20, 23, 24, U.S. Polo Ass’n, 511 F. U.S. Polo Ass’n, 2013 WL 837565, at *9. That To be sure, Paragraph 3(c) bars use of “the image of one 11 When entry of the Fragrance 1 App’x 81 (No. 12-1346), and to the prohibitions of the 1984 2 Injunction, id. at 29, 31-32. 3 Fragrance Injunction against an overbreadth claim, we clearly 4 read the order to apply only to the fragrance/cosmetics market 5 and to be limited to the scope of the 1984 Injunction. 6 stated: 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Most importantly, in affirming the We 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. U.S. Polo Ass’n, 511 F. App’x at 86. Therefore, the fact that the Apparel Litigation does not 31 preclude the Fragrance Litigation does not imply that the Double 32 Horsemen Mark infringes PRL’s marks in every market except 33 apparel. 34 must be made on a market-by-market analysis. It simply means that a finding of confusing similarity 35 12 1 We acknowledge that confusion may exist as to whether there 2 is an automatic bar to application of a market-by-market test in 3 contempt proceedings. 4 district court relied upon our decision in Wella, in which we 5 held that undertaking a market-by-market Polaroid analysis was 6 error in that particular contempt proceeding. 7 products manufacturer named “Wella Corporation” sought an 8 injunction against a graphics company named “Wella Graphics” from 9 using the name “Wella.” In declining to apply such a test, the In Wella, a hair- Wella Corp., 37 F.3d at 47. Because 10 Wella Graphics never answered the complaint, the district court 11 entered a default judgment, enjoining Wella Graphics from 12 “[u]sing Wella or any mark confusing[ly] similar to [Wella 13 Corporation’s] mark Wella.” 14 altered its name to Wello Graphics. 15 this change did not warrant a contempt order because the two 16 companies were not in direct competition with one another. 17 On appeal, we held that the district court’s use of a market-by- 18 market analysis was error. 19 genuinely contested issue was not whether the name “Wello” was 20 “confusingly similar” to the name “Wella” -- it was an obvious 21 attempt at evading the injunction -- but whether the lack of 22 direct competition between the parties rendered the injunction 23 inapplicable. 24 25 Id. Id. Wella Graphics then slightly The district court held that Id. at 48. Id. However, in Wella, the Of course, it did not. Unlike Wella, the present matter is not a case of a minor and immaterial alteration of an unquestionably infringing mark. 13 1 Rather, it is a dispute over the use of marks that have been held 2 not to be confusingly similar to PRL’s marks in another major 3 market. 4 confusingly similar mark is governed by an injunction that 5 applies to all markets. 6 By contrast, Wella is limited to cases where a clearly However, we add a word of caution about the use of market- 7 specific standards in contempt proceedings. The parties bound by 8 an injunction are entitled to clear notice of what specifically 9 they may or may not do, and any test involving a non-exhaustive 10 list of multiple factors, see Brennan’s Inc., 360 F.3d at 130, 11 may not yield easily predictable results or fair notice. 12 market-specific standards in contempt proceedings will, 13 therefore, lead to an order of contempt only when reasonably 14 obvious infringement is shown by clear and convincing evidence. 15 There is no record before us as to the application of Use of 16 market-specific factors to the eyeglass and fragrance/cosmetic 17 markets, and we do not preclude a resumption of the contempt 18 proceedings on remand. 19 unpredictable results of market-by-market analysis, a finding 20 that the Double Horsemen Mark is, when used on eyewear, 21 confusingly similar to PRL’s marks, while sufficient to find 22 liability in an infringement proceeding, is not sufficient to 23 support a contempt finding. 24 additional findings must be made: However, because of the often To hold USPA in contempt, two 14 (i) a reasonable firm in 1 USPA’s position, knowing the context of the Fragrance Injunction 2 -- in particular, the verdict in the Apparel Litigation and our 3 order affirming the Fragrance Injunction that adopted PRL’s 4 arguments described above -- would have been on clear notice that 5 use of the Double Horsemen Mark on eyewear violated the 6 injunction; and (ii) the finding of confusing similarity is 7 supported by clear and convincing evidence. 8 does not support either such finding. 9 10 The present record CONCLUSION We therefore vacate and remand for further proceedings in 11 accordance with this opinion. Given the efforts this panel has 12 expended on this matter and its resultant familiarity with it, we 13 order that the clerk refer any appeal from an order of contempt 14 based on the Fragrance Injunction involving eyewear to this 15 panel. 16 of infringement or non-infringement in a new infringement 17 proceeding involving eyewear or one not involving eyewear. This directive does not apply to an appeal from a finding 18 19 20 21 22 23 15