22

- 713

- cv MidCap Bus. Credit, LLC v. MidCap Fin. Tr.

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 D ATABASE (WITH THE NOTATION A SUMMARY ORDER @ ). A PARTY CITING 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, 1 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the 2 City of New York, on the 2 3 r d day of N o v e m b e r , two thousand twenty

- two

. 3 4 PRESENT: RAYMOND J. LOHIER, J R. , 5 SUSAN L. CARNEY, 6 SARAH A. L. MERRIAM , 7 Circuit Judges

. 8

------------------------------------------------------------------ 9 MIDCAP BUSINESS CREDIT, LLC , 10 11 Plaintiff

- Appellant , 12 13

v. No. 22

- 713

- c v 14 15 MIDCAP FINANCIAL TRUST, MIDCAP 16 FINANCIAL SERVICES, LLC, MIDCAP 17 FINANCIAL SERVICES CAPITAL 18 MANAGEMENT, LLC, MIDCAP FINCO 19 DESIGNATED ACTIVI T Y COMPANY, APOLLO 20 CAPITAL MANAGEMENT, L.P

. , 21 222 Defendant s

- Appellee s

. 1

------------------------------------------------------------------ 2 FOR APPELLANT : L ISA P EARSON , Kilpatrick 3 Townsend & Stockton LLP, 4 New York, NY (Adam H. 5 Charnes, Kilpatrick Townsend 6 & Stockton LLP, Dallas, TX , 7 Kurtis G. Anderson, Kilpatrick 8 Townsend & Stockton LLP, 9 Atlanta, GA, on the brief ) 10 11 FOR APPELLEE S : J AMES J. P ASTORE , J R . (Jared I. 12 Kagan, on the brief ), Debevoise 13 & Plimpton LLP, New York, 14 NY 15 Appeal from a judgment of the United States District Court for the 16
Southern District of New York (Alvin K. Hellerstein, Judge ). 17
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, 18

AND DECREED that the judgment of the District Court is VACATED in part and 19
AFFIRMED in part, and the case is REMANDED for further proceedings. 20

Plaintiff

- Appellant MidCap Business Credit, LLC (“Plaintiff”) appeals 21
from a March 8, 2022 judgment of the Unite d States District Court for the 22

Southern District of New York (Hellerstein, J. ) insofar as it dismissed Plaintiff’s 23

federal trademark infringement and unfair competition claims against 243 Defendants

- Appellees MidCap Financial Trust, MidCap Financial Services, LLC, 1
MidCap Financial Services Capital Management, LLC, MidC a p FinCo 2
Designated Activity Company, and Apollo Capital Manag ement, L

. P

. (together, 3
“Defendants”)

. W e assume the parties’ familiarity with the underlying facts 4

and the prior record of the proceedings, to which we refer only as necessary to 5
explain our decision to vacate and remand in part and affirm in part

. 6
A plaintiff alleging trademark infringement in violation of the Lanham Act 7

must demonstrate that (1) its trademark is valid and entitled to protection and (2) 8
the contested use of the trademark is likely to cause confusion among consumers. 9

See Hamilton Int’l Ltd. v. Vortic LLC , 13 F.4th 264, 271 (2d Cir. 2021) . Like the 10

District Court, we first analyze Plaintiff’s claims based on its registered 11

trademark “ MIDCAP BUSINESS CREDIT, ” and then proceed to analyz e its 12
claims based on its unregistered purported mark , “ MIDCAP

. ” 13

I. The Registered Tradem ark 14

I n 2015 the United States Patent and Trademark Office registered 15

Plaintiff’s mark “ MIDCAP BUSINESS CREDIT. ” App’x 36. “ [A] registered 16

mark in continuous use for a five

- year period,” like Plaintiff’s registered mark, 174 “is presumptively valid” and entitled to protection. Malletier v. Burlington 1
Coat Factory Warehouse Corp. , 426 F.3d 532, 534

- 35 (2d Cir. 2005) (citing 15 2

U.S.C. § 1065). “Once a claimant has demonstrated that it has a valid mark, it 3
must then prove that numerous ordinary prudent purchasers are likely to be 4
misled or confused as to the source of the product in question because of the 5
entrance in the marketplace of [ the ] defendant’s mark.” Morningside Grp. Ltd. 6
v. Morningside Cap. Grp., L

. L

. C

. , 182 F.3d 133, 138 (2d Cir. 1999) (quotation 7
marks omitted)

. 8

To determine whether there is a likelihood of consumer confusion, we 9
consider the eight non

- exclusive factors that our Cour t set out in Polaroid Corp. 10

v. Polarad Elec tronics Corp. , 287 F.2d 492, 49 5 (2d Cir. 1961)

. See Hamilton Int’l 11

Ltd. , 13 F.4th at 272. W e have never suggest ed that “district courts must 12
slavishly recite the litany of all eight Polaroid factors in each and every case

. ” 13
Orient Exp ress Trading Co. v. Federated Dep’t Stores, Inc. , 842 F.2d 650, 654 (2d 14
Cir. 1988)

. But w e have emphasize d that i n the mine run of cases it is 15
“incumbent upon the district judge to engage in a deliberate review of each 16
factor, and, if a factor is inapplicable to a case, to explain why

. ” New Kayak 175 Pool Corp. v. R&P Pools, Inc. , 246 F.3d 183, 1 85 (2d Cir. 2001) (quotation marks 1
omitted) ; see Natural Organics, Inc. v. Nutraceutical Corp. , 426 F.3d 576, 57 8

- 7 9 2
(2d Cir. 2005) (concluding that the district court erred because it “should have 3
made a finding with respect to each Polaroid factor, but f ailed to do so”). 4

Here, the District Court focused almost entirely on a single Polaroid factor: 5

the degree of similarity between the two marks. After comparing the marks 6

side

- by

- side , with a focus on their logos, it concluded that “because the parties’ 7
uses of [the marks ] are so dissimilar in font, colors, and arrangement, Defendants 8
are entitled to judgment as a matter of law.” App’x 233 (quotation marks 9
omitted). We conclude that t he District Court’s analysis of the similarity factor 10

was flawe d because it “based its determination that confusion . . . was unlikely 11

. . . on an overemphasized side

- by

- side comparison” of the marks

. Malletier v. 12
Dooney & Bourke, Inc. , 454 F.3d 108, 117 (2d Cir. 2006)

. The District C ourt’s 13
focus on the distinctions between the design elements of the logos ignored , for 14
example, that the marks at issue are allegedly service marks that do not appear 15
on product packaging and are meant to be heard as well as seen. Instead, the 16

District Co urt should have , among other things, “analyz e [ d ] the similarity of the 176 products in light of the way in which the marks are actually displayed in their 1
purchasing context

. ” Burlington Coat Factory Warehouse Corp. , 426 F.3d at 2

53 8

. 3

Defendants respond that the District Court in fact consider ed most of the 4

Polaroi d factors

. They point out, for example, that i n dismiss ing Plaintiff’s 5

claim under New York state law , the District Court evaluated whether Plaintiff 6
had adequately alleged actual consumer confusion , as New York law requires

. 7

See App’x 240

- 41. We do not read the District Court’s reference to actual 8

consumer confusion under New York law as satisfying its obligation to consider 9

the likelihood of confusion under Polaroid

. Defendants pivot to argu e that 10

the re are no allegations in the complaint relating to three of the eight Polaroid 11

factors : intent in adopting the mark, quality of the services, and sophistication of 12

the consumers

. But the District Court did not rely on the absence of th o se 13
allegations in determining that t he Polaroid factors favor ed Defendants

. 14
Finally , Defendants have conced e d for purposes of this appeal that the ir services 15

are in direct competition with Plaintiff ’s and that the proximity of services 16

Polaroid factor thus favor s Plaintiff. E ven so, t he District Court failed to refer to 177 this factor in determining that Defendants’ competing mark does not create a 1

likelihood of confusion

. 2

In sum mary , on this record, we cannot be confident that the District 3

Court’s likelihood

- of

- confusion analysis adequately considered the Polaroid 4

factors . W e therefore vacate the judgment as to Plaintiff’s registered mark, 5

“ MIDCAP BUSINESS CREDIT, ” and remand the case for further proceedings 6

consistent with this order. On remand, the Distric t Court should “ engage in a 7
deliberate review of each factor, and, if a factor is inapplicable to a case, [it 8
should] explain why.” New Kayak , 246 F.3d at 185 (quotation marks omitted)

. 9

II. The Unregistered “ MIDCAP ” Mark 10

W e find no error in the District Court’s analysis of Plaintiff’s claims of 11
infringement based on the unregistered “ MIDCAP ” mark. We reject Plaintiff’s 12
argument that the mark is suggestive and we assume (as Defendants have do ne 13
for purposes of this appeal) without deciding that the mark is descriptive rather 14
than generic

. To be entitled to trademark protection for a descriptive mark, 15

P laintiff had to plausibly allege secondary meaning. PaperCutter, Inc. v. Fay’s 16
Drug Co

. , 900 F.2d 558, 564 (2d Cir. 1990). T he District Court adequately 178 evaluated the relevant factors in concluding that the complaint failed to do so

. 1

See Thompson Med. Co. v. Pfizer Inc. , 753 F.2d 208, 217 (2d Cir. 1985) (outlining 2
the six factors relevant to evaluating whether a mark has acquired secondary 3
meaning). We therefore affirm the judgment insofar as it dismisses Plaintiff’s 4
claims of infringemen t relating to the “ MIDCAP ” mark

. 5

We have considered Plaintiff’s remaining arguments , as well as 6

Defendants ’ argument relating to laches , and conclude that they are without 7
merit. For the foregoing reasons, we VACATE the D istrict Court ’s di smissal of 8

Plaintiff’s federal claims relate d to the “ MIDCAP BUSINESS CREDIT ” mark, and 9
remand for further proceedings related to those claims. The judgment of the 10

District Court is AFFI RMED in all other respects. 11

FOR THE COURT: 12 Catherine O ’ Hagan Wolfe, Clerk of Court 13