### 1999 D e c i sion s O p inion s of the U nit e d

S t a t e s C our t of Appe al s for the Thir d C ir c uit

1-21-1999 

# A&H S p or t swe a r I nc v

. V ic t or i a s S ecr et

P r e c e de n t i al or N on-P r e c e de n t i al :

D ock e t 97-1570

F o l lo w thi s a nd a dd it ion al w ork s a t : h tt p://d i g it alc ommon s .l a w

. v i l l a no v a

. e du/thir dc ir c uit_1999

Thi s de c i sion i s br ou gh t t o y ou for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit a t V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. I t h as be e n a c c e pt e d for inclusion in 1999 D e c i sion s b y a n a uthor i z e d a dmini s tr a t or of V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. F or mor e infor m a t ion, p le as e c on t a ct Be n j a min

. C a rl s on@l a

w

. v i l l a no v a

. e du

. 

### R e c omme nde d C it a t ion

" A&H S por ts w e a r I nc v

. V ict or i as S e cr e t " (1999). 1999 D e cisio n s

. P a pe r 18.
h tt p://d i g it alc ommon s .l a

w

. v i l l a no v a

. e du/thir dc ir c uit_1999/18Filed January 21, 1999

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 97-1570

A&H SPORTSWEAR INC.; MAINSTREAM SWIMSUITS, INC., Appellants in No. 97-1570

v.

VICTORIA'S SECRET STORES, INC.; VICTORIA'S SECRET CATALOGUE, INC.

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 94-cv-07408 ) (District Judge: Hon. Franklin S. VanAntwerpen)

Argued May 19, 1998

Before: SLOVITER, GREENBERG and GIBSON,* Circuit Judges

Resubmitted December 14, 1998

Before: SLOVITER, GREENBERG and GIBSON,* Circuit Judges

(Filed January 21, 1999)

___________________________________________________ ______________

* Hon. John R. Gibson, United States Senior Circuit Judge for the United States Court of Appeals for the Eighth Circu it, sitting by designation.Michael F. Snyder

Seidel, Gonda, Goldhammer &

Abbott Philadelphia, PA l9l02

Norman Seidel Laub, Seidel, Cohen & Hof Easton, PA 18042

Arthur H. Seidel Stephen J. Meyers (Argued) Seidel, Gonda, Lavorgna & Monaco Philadelphia, PA l9l02

Attorneys for A & H Sportswear Inc. and Mainstream Swimsuits, Inc., Cross-Appellants in No. 97-
1570

H. Robert Fiebach

Cozen & O'Connor Philadelphia, PA l9l03

Frank J. Colucci (Argued)
Richard P. Jacobson
Colucci & Umans New York, N.Y. 10022

Attorneys for Victoria's Secret Stores, Inc. and Victoria's Secret Catalogue, Inc., Cross-Appellees in
No. 97-1570

OPINION OF THE COURT

SLOVITER, Circuit Judge.

This trademark infringement action was filed by A&H Sportswear Inc. and its affiliate, Mainstream Swims uits, Inc., the maker and distributor respectively of swi mwear under the trademark MIRACLESUIT (together "A&H"), against Victoria's Secret Stores, Inc. ("VS Stores" ), and Victoria's Secret Catalogue, Inc. ("VS Catalogue"), (together

2"VS"), a well-known manufacturer of lingerie and no w

swimwear. The District Court gave judgment for VS o n A&H's claim that VS's use of THE MIRACLE BRA on its lingerie infringed the MIRACLESUIT trademark, findi ng that
there was no likelihood of confusion. The District Court also found that VS had violated the Lanham Act by i ts use of THE MIRACLE BRA on its swimwear, finding a "possibility of confusion" with the MIRACLESUIT swi msuit made by A&H, and ordered certain relief.

VS appeals the judgment that THE MIRACLE BRA swimwear infringes A&H's MIRACLESUIT trademark (No. 97-1541), arguing that the District Court applied a n erroneous standard of law. A&H filed a cross appeal (No. 97-1570) contending that the District Court clearly erred in failing to find a likelihood of confusion between T HE MIRACLE BRA mark and A&H's prior MIRACLESUIT mark.

This panel of the court heard argument on the appea l and cross-appeal on May 19, 1998. Thereafter, we recommended that the court originate a rehearing en banc
to review whether it wished to adhere to the standa rd of possibility of confusion applied by the District Co urt. After giving the parties an opportunity to be heard on th at issue, the court voted to consider VS's appeal (No. 97-154 1) en banc, but resubmitted A&H's cross-appeal (No. 97-15 70) to the panel as not presenting any issue requiring en banc consideration. Accordingly, we turn to the issues r aised on A&H's cross-appeal.

I.

FACTS AND PROCEDURAL HISTORY

The facts underlying this cross-appeal are set fort h in the District Court's published opinion, A&H Sportswear Co. v. Victoria's Secret Stores, Inc., 926 F. Supp. 1233 ( E.D. Pa. 1996) (addressing liability).1 We will set forth th e pertinent

___________________________________________________ ______________

1. The court's other published opinion in this case , A&H Sportswear Co. v. Victoria's Secret Stores, Inc., 967 F. Supp. 145 7 (E.D. Pa. 1997) (as amended), addresses remedies and relates solely to the appeal before the

en banc court.

3facts and procedural history needed to address the

substance of this appeal, recognizing that our disc ussion will duplicate some of the material in the en banc opinion. The District Court's Findings of Fact from the opin ion on liability are designated hereafter as FF.

A&H, a closely held Pennsylvania corporation and ma ker of 10% of the nation's swimsuits, was issued a trad emark for its MIRACLESUIT on October 27, 1992; its affili ate, Mainstream Swimsuits, Inc., a Pennsylvania corporat ion,
served as the exclusive distributor of the MIRACLES UIT through its SWIM SHAPER division. Both corporations are controlled by members of the Waldman family. FF 1-2

.

The MIRACLESUIT was developed and subsequently marketed as a "control" suit whose patented fabric and design affords the wearer greater "hold-in" control of the hips and waist, which makes the wearer appear slimm er without the use of girdle-like undergarments. Most MIRACLESUITs contain underwire bras, are of a one-p iece design, and retail for $45 to over $100. FF 14. The first
interstate use of the mark MIRACLESUIT and the firs t
interstate sale of a MIRACLESUIT occurred in Novemb er 1991. FF 21. The name MIRACLESUIT was chosen becaus e it was "unique, dynamic, exciting, and memorable." FF 22. In 1992, the MIRACLESUIT was widely advertised, sho wn, and discussed in trade shows, magazines and the ele ctronic
media. FF 27. The MIRACLESUIT was also sold for a b rief time in the VS catalogue (1,700 suits were purchase d by VS in 1992 and 1993), but the relationship was discont inued because in several instances VS failed to identify the swimsuit by its MIRACLESUIT trademark. FF 29, 30.

VS Stores, the nation's top retailer of lingerie, i s a Delaware corporation headquartered in Columbus, Ohi o, and operates over 650 stores throughout the country which focus on intimate apparel, with bra sales the leadi ng product. FF 5. VS Catalogue, a Delaware corporation headquartered in New York City, is a mail order bus iness with a much wider array of merchandise (including swimwear) sold through its over 300 million catalog ues circulated each year. FF 6. The companies responsib le for the stores and the catalogue are independent subsid iaries

4of Intimate Brands, Inc., owned by The Limited, Inc ., based

primarily in London. FF 7.

In 1992, VS Stores began developing a cleavageenhancing bra which was introduced (then unnamed) i n each store in August 1993 and first appeared in the VS catalogue in February 1994. FF 12, 17, 19. The bra uses removable pads, lace, straps, and underwire to acce ntuate the wearer's bust. FF 15. VS Stores sought a name f or its new push-up bra that had a "fresh, flirtatious fun attitude." It chose THE MIRACLE BRA name in December 1992, allegedly after a model tried the new bra and excla imed, "Wow, this is a miracle!" FF 23. The name THE MIRAC LE
BRA was first used in VS Stores in November 1993. F F 19. VS Stores was issued a registration for its tradema rk THE MIRACLE BRA on August 9, 1994. FF 25. Since itsfirs t brisk sales, THE MIRACLE BRA, which retails for und er $20, has been heavily marketed and has generated ov er $132 million in sales. FF 69.

A&H, which did not initially object to VS's tradema rk use of THE MIRACLE BRA, did so after VS began to extend THE
MIRACLE BRA into swimwear with its introduction of THE MIRACLE BRA bikini in the November 1994 VS catalogu e and in ten VS stores as a test market. VS's sales o f swimwear expanded rapidly, and in 1995 VS incorpora ted THE MIRACLE BRA design and trademark into a one-pie ce swimsuit.

In August 1994, even before its first sale, VS Stor es applied for a registration of THE MIRACLE BRA trade mark for swimwear. FF 34. In February 1995, the Patent a nd Trademark Office (PTO) refused the registration on the basis of A&H's prior registration of the MIRACLESUI T, although A&H had not interposed an objection to the registration. FF 31, 36. Apparently because it had been using THE MIRACLE BRA name in lingerie, neither VS Stores nor VS Catalogue conducted a separate tradem ark search of THE MIRACLE BRA trademark as it applied t o swimwear. FF 35. In December 1994, just a month aft er the
introduction of THE MIRACLE BRA swimwear collection
, A&H filed this suit alleging, inter alia, infringem ent of its trademark MIRACLESUIT, and seeking a preliminary

5injunction and damages. The District Court consolid ated

the injunction hearing with a bench trial on the me rits.

Following a two-week bench trial, the District Cour t
found no likelihood of confusion between THE MIRACL E BRA mark as applied to lingerie and the MIRACLESUIT mark. Accordingly, the court entered judgment for V ictoria's Secret and against A&H on that claim of infringemen t. When VS appealed from the District Court's decision in favor of A&H with respect to THE MIRACLE BRA for swimwear, A&H filed this cross-appeal. We have jurisdiction under 28 U.S.C. S 1291.

II.

DISCUSSION

The MIRACLESUIT v. THE MIRACLE BRA for Lingerie

In a trademark infringement action, the "likelihood of confusion" between two marks is a factual matter, s ubject
to review for clear error. Versa Prods. Co. v. Bifo ld Co., 50 F.3d 189, 200 (3d Cir. 1995). Clear error exists wh en, giving all deference to the opportunity of the tria l judge to evaluate the credibility of witnesses and to weigh the evidence, we are "left with a definite and firm con viction
that a mistake has been committed." Anderson v. Bes semer City, 470 U.S. 564, 573 (1985) (quoting United Stat es v. United States Gypsum Co., 333 U.S. 364, 395 (1948)) . The District Court's conclusions of law are subject to plenary review. See Duraco Prods., Inc. v. Joy Plastic Ente rs., 40 F.3d 1431, 1438 (3d Cir. 1994).

In order for A&H, as the owner of a valid and legal ly protectable mark, to hold VS liable for trademark infringement under S 32 of the Lanham Act, it must show that VS has used a confusingly similar mark. Sectio n 32(1) provides, in pertinent part:

Any person who shall, without the consent of the registrant--

(a) use in commerce any reproduction, counte rfeit, copy, or colorable imitation of a registered mark in

6connection with the sale, offering for sale,

distribution, or advertising of any goods or services
on or in connection with which such use is l ikely to cause confusion, or to cause mistake, or to deceive; . . . shall be liable in a civil action by t he registrant

. . . .

15 U.S.C. S 1114(1) (emphasis added).

Similarly, S 43(a) of the Lanham Act, which governs unfair competition claims, provides in pertinent pa rt:

Any person who, on or in connection with any goods or services, . . . uses in commerce any word, t erm, name, symbol, or device . . . or any false designa tion of origin
. . . which--

(A) is likely to cause confusion, or to caus e mistake, or to deceive as to . . . the origin, sponso rship, or approval of [his or her] goods, services, or commercial activities by another person . . . shall be liable in a civil action by any person who b elieves that he or she is or is likely to be damaged by such

act.

15 U.S.C. S 1125(a)(1) (emphasis added).

The central inquiry in a trademark infringement cas e focuses on the likelihood of consumer confusion. Th e District Court determined that VS's use of THE MIRA CLE BRA mark with lingerie did not create a likelihood of
confusion with the MIRACLESUIT.

The test to be applied to determine likelihood of confusion differs when the goods compete and when t hey
do not. Where the trademarks involved are not used on directly competing merchandise we look to the ten " Scott factors" set forth in Scott Paper Co. v. Scott's Li quid Gold, Inc., 589 F.2d 1225, 1229 (3d Cir. 1978), sometimes also called "Lapp factors" after Interpace Corp. v. Lapp , Inc., 721 F.2d 460 (3d Cir. 1983). The District Court sought to apply those ten factors assiduously, and after analyses
summarized its conclusions as follows:

[W]e hold that with respect to the likelihoo d of
confusion between Plaintiffs' MIRACLESUIT an d

7Defendants' THE MIRACLE BRA, (1) the two mar ks are

similar in that they share a dominant portio n, the word "miracle," yet remain distinct by the additi on of the word that follows (bra or suit) when designa ting those respective goods; (2) the marks are both str ong in their respective industries which we believe are s wimsuits for Plaintiffs' MIRACLESUIT and lingerie for

Defendants' THE MIRACLE BRA. As those marks extend into the industry dominated by the ot her (i.e., MIRACLESUIT for lingerie or THE MIRACLE BRA for swimwear), the strength of the marks and the amount of protection they receive commensurately de crease; (3) the goods are in different price categories; (4) the
Defendants had used their THE MIRACLE BRA ma rk for slightly over one year prior to an incid ent of actual confusion. The few incidents occurred just t wo months following Defendants' extension of THE MIRAC LE BRA to swimwear, an industry in which Plaintiffs had already produced and registered their MIRACL ESUIT for several years.[ ]; (5) based on the reco rd before us, Defendants did not adopt its THE MIRACLE BRA mark
with the conscious and deliberate bad faith intent to
free-ride on the success of Plaintiffs' mark ; (6) the evidence of actual confusion suggests it was Defendants' entry into swimwear rather than into the lingerie market with the name "miracle" that caused potential confusion among consumers; (7) the goods are marketed through the same media; (8) the products are marketed to women of similar age; (9) th e goods serve different functions; and (10) the Plai ntiffs' limited involvement in developing and manufacturing bras is not germane to our analysis where none of th ese efforts were conducted using marks or names at issue in this litigation. We therefore conclude that Plain tiffs have not met their burden under the Scott Paper stand ard and
have not established a likelihood of confusi on between
their MIRACLESUIT swimsuit and Defendants' T HE MIRACLE BRA (bra).

926 F. Supp. at 1263-64.

A&H argues, in essence, that the appropriate applic ation of the ten-factor Scott/Lapp test required afinding of a

8likelihood of confusion and hence a finding of infr ingement.

We held in Fisons Horticulture, Inc. v. Vigoro Indu s., 30 F.3d 466 (3d Cir. 1994), that the "weight given to each factor in the overall picture, as well as its weighing for pl aintiff or defendant, must be done on an individual fact-speci fic
basis." Id. at 476 n.11. We consider the factors se riatim.

Similarity of the Marks

A&H contends that inasmuch as the District Court fo und the marks were nearly identical by use of "miracle, " it erred in finding that the addition of a descriptive term ("bra" for one and "suit" for the other) to the word lessened any confusion. We have previously stated that descripti ve terms (such as "bra" and "suit") must be considered in as sessing infringement. See generally Country Floors, Inc. v. Partnership of Gepner and Ford, 930 F.2d 1056, 1065 (3d Cir. 1991). In evaluating the effect of similarity, it is also
relevant that the use of the housemark "Victoria's Secret" frequently accompanies THE MIRACLE BRA product. Similarly, the MIRACLESUIT swimsuits generally had a sewn-in label bearing either the name SWIM SHAPER o r MIRACLESUIT, and, after August, 1994, also bore hangtags. The key finding by the District Court reg arding similarity was, "We do not believe that the overall impression created by THE MIRACLE BRA bra and the MIRACLESUIT swimsuit is essentially the same." 926 F. Supp. at 1257-58 (emphasis added). This is signific ant because we have previously stated that it is the"ov erall impression" created by the marks that should be the central focus. Fisons, 30 F.3d at 478.

Strength of The Mark

The District Court found that the word "miracle" is "fanciful," deserving the highest protection, and, thus, when applied to lingerie or swimsuits, is a "strong mark ." 926 F. Supp. at 1259. However, the strength of MIRACLESUIT and THE MIRACLE BRA and the amount of protection they
receive decrease when each mark is extended into th e other's industry. See id. at 1263.

A&H contends that the District Court failed to eval uate the commercial strength of the MIRACLESUIT mark in the context of its claim of reverse confusion, and we h ave found

9no such discussion in the District Court's opinions

.

According to A&H, THE MIRACLE BRA presence in the marketplace overwhelmed the MIRACLESUIT mark such that consumers would likely be confused in thinking the senior MIRACLESUIT mark was attributed to the junio r user, VS. The District Court did not so find, and w e do not think such a finding was mandated by the evidence i n the swimwear vs. lingerie inquiry. We leave A&H's conte ntion regarding reverse confusion in the swimwear market to the
decision in No. 97-1541.

The Price of the Goods, the Time Before Confusion a nd
Actual Confusion

The District Court found that THE MIRACLE BRA and the MIRACLESUIT have different prices (under $20 compared to over $50 respectively), see id. at 1260 , a finding that favors VS. This led the District Court to find that the difference between the prices of the linge rie and the swimsuits diminishes any likelihood of confusio n between the products.

The court also noted the absence of any confusion a rising from THE MIRACLE BRA for a year after it was introd uced, and that only after THE MIRACLE BRA was extended to swimwear was there any incident of actual confusion . See
id. at 1260.

Defendants' Intent

As intent has been held to play a role in the analy sis of infringement, we look carefully at the District Cou rt's finding that A&H failed to prove "bad faith or deli berate intent" to infringe by VS. Id. at 1261. The court r eviewed the evidence A&H had presented in an effort to show intentional infringement, including the testimony o f VS Stores's Marketing Director, and found that, despit e VS's knowledge of the MIRACLESUIT mark and its failure t o conduct an additional trademark search before it ex panded THE MIRACLE BRA mark to swimwear, there was no bad faith on the part of VS. See id.

A&H cites authority that intent is not necessary to prove infringement and that good faith is not a defense t o infringement. We do not disagree as to the law. How ever,

10the District Court's conclusion that there was no l ikelihood

of confusion did not rest on the intent of VS. We r ecognize that another court might have drawn a different inf erence from VS's prior knowledge of the MIRACLESUIT mark b ut
note that there were numerous other relevant facts before
the court. We cannot conclude that the District Cou rt clearly erred in finding no intent to infringe by V S.

Similar Marketing/Media Channels & Customers

The District Court found that VS and A&H "promote t heir products through the same channels of trade and thr ough the same media." Id. at 1262, FF 43. It also found that the target customer base for the MIRACLESUIT and THE MIRACLE BRA bra is similar. FF 38, 39. Not surprisi ngly, VS contends that the District Court weighed this fa ctor too favorably to A&H, and notes in support of its conte ntion of error that it sells THE MIRACLE BRA only through th e VS catalogue and VS stores. There is support for the D istrict Court's finding and we cannot characterize it as cl early

erroneous.

Relationship of the Goods

Consistent with each party's tendency to challenge any finding that it deems adverse, A&H disputes the Dis trict Court's finding that, although related, swimwear an d lingerie "serve different functions" and are "separ ate
industries." Id. at 1262-63. A&H hasfiled a motion asking this court to take judicial notice that these indus tries are "so closely related in their channels of trade and appearance as to be, at times, indistinguishable." We deny the motion as it requires a factual determination w e believe is inappropriate for judicial notice.

The reason we look to the relationship of the goods is to ascertain whether the goods were so related that a consumer would reasonably assume they were offered by the same source, thereby leading to confusion. See Fisons,
30 F.3d at 481. The District Court found that "the consuming public would [not] expect A&H or Mainstre am . . . to manufacture products in the lingerie marke t." 926 F. Supp. at 1263. We find no clear error, particularly as A&H had only limited involvement in the bra industry an d, as

11the District Court noted, the products were sold in distinct

manners.

A&H contends that the relationship between the prod ucts is further evidenced by VS's opposition to A&H's pr oposed registration of THE MAGIC BRA, a new product by A&H developed after the commencement of this lawsuit. A &H argues that because VS allegedly contends in the PT O opposition that the MAGIC BRA for swimsuits is confusingly similar to THE MIRACLE BRA for lingerie (a position it contends is contradictory to VS's argum ents here), the District Court should have considered ev idence of that PTO proceeding. Inasmuch as the facts sought t o be introduced were post-trial, and the MAGIC BRA mark is different than the marks at issue here, the Distric t Court did not abuse its discretion in refusing to conside r that
evidence.

Factor Summary

In balancing the relevant factors, no one of the Sc ott factors is more weighty than another except, perhap s, the similarity of the marks. See Fisons, 30 F.3d at 476 & n.11 (emphasizing similarity). There is certainly simila rity between the marks at issue, but that similarity was discounted by the District Court because the marks were not identical in their entirety. In sum, the Distri ct Court weighed each factor as required. After reviewing th e record and the parties' argument, we conclude that the cou rt did not commit clear error in finding there was no like lihood of confusion between THE MIRACLE BRA mark as applied t o lingerie and the MIRACLESUIT mark, and hence no infringement.2

___________________________________________________ ______________

2. A&H also appeals the District Court's rejection of its contention that VS violated the Pennsylvania Antidilution law, 54 P a. Cons. Stat. Ann. S 1124, which provides for relief upon a showing of a "likelihood of injury to business reputation or of dilution of the distin ctive quality" of a registered mark. Id. The District Court noted that "predatory intent" was relevant in establishing an antidilution claim, 926 F. Supp. at 1265 (citing Nugget Distribs. Coop. v. Mr. Nugget, Inc., 776 F. Supp. 1012, 1024 (E.D. Pa. 1991)). Having found no bad faith on the part of VS, the court rejected the state claim. We find no error in the District Court's
dismissal of this claim.

12III.

CONCLUSION

For the reasons set forth, we will affirm the judgm ent of
the District Court in favor of VS on A&H's claim ar ising out of THE MIRACLE BRA with lingerie.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

13