1

06 -36 91 -cv PRL U SA

H olding s, Inc . v . U nite d Sta te s Polo A ss ’n 1 UN ITED STA TES C OU RT OF AP P EA LS 2 F OR THE SE CO ND CI RC UI T

3 Aug ust Term, 2007 4 (Argued: Novembe r 15, 2007 Dec ided: Marc h 4, 2008)

5 Docke t No. 06-3691-c v

6 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7 PRL USA Holdings, Inc., 8 Plaintif

f-Appellant , 9 v

. 10 United States Polo Association, I nc., United States Polo 11 Association Properties, Inc., L .V. Enterpr ises, I nc., 12 United States Polo Association, L td., J ordac he, L td., 13 Defendants-A

ppellees , 14 M&AMarke ting Corp/Amer ican Jeans, Meir Panig el 15 De

fe nd an ts , 1 6 R e l i an c e In s u r an c e C o mp an y, 17 Movant

. 18 19 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 20

21 Be fore : L EVAL , SOTOMAYOR, and B . D. PARKER, Circuit Judges

.2 1 Plaintiff PR LUSA Holdings, Inc., holder of the Ralph L aure n trade marks, appe als from the 2 judgme nt of the United States District Court f or the Southern District of New Yor k(D an i els, J. ), 3 enter ed followinga jury trial, denying plaintiff’s claims of trade mark infring ement. The jury found 4 that three of th e d ef en d ants’ four

contested ma

rks did not infring e the plaintiff’ s polo play er 5 trade mark. Plaintiff conte nds that t h e d i s t ri ct court erre d in admitting evidenc e of discussions at 6 se ttl e me nt n e g oti a tio ns , e xclu din g a do c ume nt p re pa

re d b y an a g e nt of a de fe nd ant wh ic h a rgua bly 7 ref lected intent to use t rade marks si milar to the R alph L aure n trade marks to compete unfairly , and 8 in refusingto give a re quested jury instruction. Affirme d.

9 GEORGE A. STAMBOUL I DI S, Bake r & Hostetler, 10 L L P, New Yor k, NY (Gera ld J . Fe rguson, on the 11 brief) , for Appellee s Un ited States Polo Association, 12 I nc ., and Un ite d St a te s Po lo A sso c iati on Pr op e rt ie s, 13 I nc. 14 MI CHAEL S. SOMMER, McDe rmott W ill & Emery 15 L L P, New Yor k, NY (E l l iot Si lverman, A nn E. 16 Schofield, on the brie f), f or Appellee

s J ordac he, L td., 1 7 United States Polo Assoc iation, L td., L .V. 18 Enterpr ises, I nc. 19 L ESL I E GORDON F AGEN, Paul, Weiss, Rifkind, 20 Wharton & G arr i s o n L L P, New Yor k, NY (A ndrew 21 G. Gordon, D arr en W. J ohnson, on the bri ef), for 22 Appellant

.

23 L EVAL , Circuit Judge : 24 This is an appea l by plaint i ff P R L US A Holding s, I nc., holder of the Ralph L aure n 25 trade marks for cl o t hing, f rom the judg ment of the United States District Court for the Southern 26 District of New York ( Daniels, J. ), deny ing pla intiff’s claims of tra demar k infring ement. PRLhas3 1 for many

y ear s used as a m ark on Ralph L aure n clothing a famous log o showing in silhouette a 2 mou

nte d p olo pla

y e r w ithpo lo m a lle t r a ise d. PRL br ou g ht thi s a c tio n a g a ins t th e Un ite d St a te s Po lo 3 Association (“ USPA”) and its license e, Jordache, Ltd., alleg ing that four log os used by the 4 de fe nd ants on a c lot hin g lin e , ea c h sho wi ng a pa ir of mou nte d p olo pla

y e rs – th e so -c a lle d “ do ub le 5 horsemen ma

rks” – infr inge d the Ralph L aure n polo play er log o. 6 Th e fou r di sp ut ed ma rk s in c lud e : ( 1) a

so lid sil ho ue tte of

the tw o h or se me n, (2 ) t

he same 7 solid sil houette with the letter s “USPA” adde d underne ath, (3) an outl ine of the t wo horseme n, and 8 (4) the sa

me outline with “USPA” adde d underne ath. 9 After

trial, the jury

found that the first log o – the solid double horsemen silhouette without 10 lettering– infring ed the plaintiff’ s tradema rks. Howe ver, a s for the thre e other marks, the jury

found 11 no likelihood of confusion an d hence no infring ement. The district court ente red judg ment 12 acc ording ly

. 13 PRL

a pp e a ls f ro m th e pa

rt of the jud g me nt i n f

a vo r o f t he de fe nd ants on

thr e e g ro un ds . F ir st, 14 PRL argues that the district cour t erre d when it allowed the defe ndants to prese nt evidence of 15 discussions at settlement neg otiations between PRLand the USPA. Second, PRLargues that the 16 dis tr ic t c ourt

e rr e d b y fa ili ngto g ive th e jur

y an in str uc tio n th a t th e de fe nd ants , a s p a st i nf ri ng e rs , 17 wer e re quired to maintain a “saf e distance” from PRL ’s mark. Thir d, PRL contends that the district 18 c ourt

e rr e d w he n it

e xclu de d a

do c ume nt ( the so -c a lle d “ Ra lph Rip -O ff ” do c ume nt) , w hic h a

rgua bly 19 demonstrated intent to compete unfa irly by using a confusingtrade mark. We re ject PRL ’s 20 c on te nti on s and

a ff ir m th e jud g me nt.4 1 Ba ckg round 2 Plaintiff PR Ldesign s , m ar kets, and distributes appa rel, home f

urnishings, f

rag ranc es, and 3 acc ess o r ie s u n d e r th e n ame Ra lp h L a u r e n . I t f r e qu e n tl y e mp lo y s a s a tr a d e ma r k th e p olo play er 4 sy mbol, which has appe are d on Ralph L aure n clothing sinc e 1972. 5 Def

endant USPA, founde d in 1890, is the g overning body of the sport of polo in the United 6 State s. Th e USP A pr omu lg a te s the ru le s of the sp or t, spo ns or s tour

name nts , an d a ssi g ns ha

nd ic a ps . 7 Th ro u g h i t s w h o l l y - o w n e d s u b s i d i ar y , U n i t e d S t a t e s P o l o A s s o c i a t i o n P r o p e rt i e s , I n c . , t h e USP A 8 reg isters trade marks and lice nses t hem t o be used for the sale of products. Since 1998, United States 9 Polo Association Prop er t i es, Inc., has lice nsed the rig ht to produce c lothing bea ring the USPA’s 10 trade marks to J ordac he, a ma nufac turer of

clothing. 11 PRL and the USPA have been in conflict since the 1980s , when the USPA first entered the 12 reta il clothing business. As the USPA admits, in the ear ly 1980s it acted irr esponsibly in licensing 13 its logos. As a r esult, in 1984 PRL obtained a judgme nt in the United States District Court for the 14 Southern District of Ne w York ( Sand, J. ) enjoinin g the USPA from the use of cer tain marks that 15 inf

ri ng e d PRL ’s tr a de mark s. Th e jud g me nt m a de c le ar, ho we ve r, that the USP A r e ma ine d f re e to 16 “conduc t[ ] a retail licensingprog ram utiliz ing . . . a mounted polo play er or

eques t ri an o r equine 17 sy

mbol which is disti nctive fr om the [R alph L aure n] pol o play er sy mbol . . . .” 18 Th e USP A p re se nte d e vid e nc e a t tr ia l su pp or tin g its argume nt t

hat, whil e the USP A a

nd PRL 19 wer e eng ag ed in settlement discussions reg ardingvarious conte sted marks in 1996, PRLassure d the 20 USPA that it w o u l d n o t object to the USPA’s use of a version of the double horseme n mark. 21 Ac c or din g to t

he USP A, thi s a ssu

ra nc e pr omp te d it

to d e ve lop and

lic e ns e a ve rs ion of the do ub le5 1 horsemen ma

rk for use; J ordac he subseque ntly spent over $41 million developinga clothing line 2 bear ing the mark. PRL ’s witness, its former g ener al counse l, L ee Sporn, d en i ed that PRLhad 3 consente d to the USPA’s use of a double horsemen ma rk. 4 I n Marc h 2000, PRL filed this suit aga inst the USP A, J ordac he, and r elated de fenda nts for 5 trade mark infr inge ment. I n September 2003, a fter thr ee year s of pre -trial litigation , the par ties 6 se ttl e d a

nu mbe r o f t he ir dis pute s. Th e se ttl e me nt a g re e me nt l e ft unre so lve d whe the r t he de fe nd ants ’ 7 four double hor semen mar ks infring ed PRL ’s trade marks. The parties stipulated in the settlement 8 ag ree ment that this claim would be resolve d by a jury trial. 9 Th e jur

y tr ia l be g an o n O c tob e r 3 , 2 00 5 a nd e nd e d o n O c tob e r 2 0, 20 05

. At tria l, P RL 10 pr e se nte d e vid e nc e that c on sume rs w e re lik e ly to c on fu se a ll f

our d ou ble ho rs e me n ma

rk s w ith 11 Ralph L aure n’s polo play er sy mbol. The defe ndants prese nted contra ry evidenc e and a lso attempted 12 to pr ove the aff

irmative defe nse of e stoppel by acquie scenc e by

prese nting e vidence that PRL had 13 aff

irmatively

consente d to the USPA’s use of a ve rsion of the double hor semen mar k. 14 PRL ob

je c te d to thi s latte r e vid e nc e of c on se nt o n th e g ro un d th a t it c on sis te d o f s tate me nts 15 ma de in c omp ro mis e ne g oti a tio ns , o ff e re d to pro ve the inv a lid ity of its c la ims , a

nd the re fo re sh ou ld 16 be excluded under Fe dera l Rule of Evidence 408. The district court over ruled PRL ’s objection and 17 admitted the evidenc e. 18 Using a spec ial verdic t form, the jury rende red th e fo l l o wi n g specia l verdicts: the jury 19 re je c te d th e de fe nd ants ’ c la im o f e sto pp e l by a c qu ie sc e nc e . It f

ound that the defe nd ant s’ so lid 20 double horseme n mark infr inge d PRL ’s re g istered tra demar ks. On the other ha

nd, the jury

found that 21 the def

endants’ thr ee othe r double horse men marks – the solid double horsemen with “USPA”The Rule wa s amende d in way s not pertinent to this appeal e ffe ctive De cembe r 1, 2006. 1 6 1 su bs c ri pt, the outli ne do ub le ho rs e me n, and the outli ne do ub le ho rs e me n with “ USP A” su

bs c ri pt – 2 d id

n o t i n f r in g e PR L ’ s tr a d e ma

r k s . T h e d is tr ic t c o u rt e n te r e d ju d g me n t a c c o r d in g ly

. This appea l 3 followed.

4 Discussion

5 I . Evidence of Compromise Neg otiations 6 7 Th e de fe nd ants of fe re d the te sti mony of a

fo rm e r U SPA e mpl oy e e , M e rl e Jenk ins , a nd so me 8 c or

ro bo ratin g e vid e nc e , th a t du ri ng the c ours e of the ir

se ttl e me nt d isc us sio ns , PRL g a ve the USP A 9 c on se nt t o u se a

ve rs ion of the do ub le ho rs e me n ma rk and imp lie d th a t it

wa s n ot “ off

ens ive” to 10 PRL . PRL objected both be fore and duringtrial to all such ev i d en ce , ci t ing F eder al Rule of 11 Evidence 408. 12 Un de r R

ule 40 8, in i ts the n- c ur

re nt v e rs ion , e vid e nc e of “ c on du c t or

statemen ts ma de in 1 13 c omp ro mis e ne g oti a tio ns ” is “ no t a dmi ssi ble to pr ov e li abi lity fo r o r i nv a lid ity

of [a] c la im o r i ts 14 amount.” The Rule, howeve r, expli citly provided an exception. I t “ does not r equire exclusion when 15 the evidenc e is offe red f or anothe r purpose .” F ed. R. Evid. 408 (2005). 16 The district cour t ruled that t he evidence w as admissible to prove the de fenda nts’ asser tion 17 that PRL was e stopped to claim in fr i n gem en t af ter it led the de fenda

nts to believe no cla im of 18 inf

ri ng e me nt w ou ld b e br ou g ht, and the de fe nd ants sp e nt m ill ion s in de ve lop in g t he mar

ks in 19 relianc e on that assur ance . PRL contends the r ece ipt of this evidence violate d Rule 408.7 1 a. PRL contends the de fense of estoppel was a pretex t for int roducin g ev i dence disputing 2 likelihood of confusion. PRL ’s first ar g ument is that th e d ef en d an t s ’ re liance on Rule 408’ s 3 exception, as authority allowing evidenc e fr om settlement neg otiations to p r o ve estoppe l, was a me re 4 prete x t. PR Lcontends t he def endants’ tr

ue purpose in offer ing e vidence that PRL expressed 5 a g re e me nt t o th e USP A’ s u se of a do ub le ho rs e me n log o wa s to su g g e st to t he jur y that if PRL did 6 not object to the USPA’s use of a double horseme n logo, it must have be en b ec au s e P R Ldid not 7 believe the mark was confusing ly simil ar to its own, and if PRL did not believe the two marks we re 8 c o n f

u s i n g l y s i m i l ar , t h a tm u s tb e b e c a u s e t h e y i nf

a c tw e r e n o tc o n f

u s i n g l y s i m i l ar . A c c o r d i n g l y, 9 PRL contends, the e vidence was used for a purpose e x pressly prohibited by

Rule 408, and not for 10 “anothe r purpose .” 11 There is of course a likely logic al over lap betwe en the two issues. A trad emark owner’ s 12 a ssu

ra nc e to o ne it l a te r a c c us e s o f inf ri ng ingthat th e ow ne r w ill no t ob je c t to the us e of

a c e rt a in 13 mark may

well sug g est to a jury that the owner of the mar

k did not believe the mar

k in question was 14 likely

to cause confusion. 15 On the other hand, it is we ll established that if a tra demar k owner tells a potential defe ndant 16 that it will not a ssert a claim of infring ement based on the use of a particula r mark, and the r ecipient 17 of

that a ssu ra nc e re lie s o n th e a ssu

ra nc e to i ts s ub sta

nti a l de tr ime nt, a s b y

sp e nd ingsu

bs tanti a l sums 18 in the development of the mark on which it r ece ived the assura nce, e stoppel will bar the tra demar k 19 owner

from subsequently

claiming infring ement. See Times M irror Magazines, Inc. v . Field & 20 Stream Licenses Co. , 294 F.3d 383, 395 ( 2d Cir. 2002) (desc ribing the af firmative de fense of 21 acquie scenc e); 6 J. Thomas McCarthy , McCarthy on Trademark s and Unfair Competiti on § 31:42I n simil ar instanc es, the c ourt and the pa rties might e x plore prote cting ag ainst improper 2 uses of e vidence of settlement discussions by bifurcation. The trial might be broken into two stag es. In the first stag e the jury would hear

the evidenc e, and r ender

a par tial verdict, on whether the def endant’ s acc used mark is c onfusing ly simil ar to the pla intiff’s mark. I f the jury finds it is not , the def

endant wins; the que stion whether the pla intiff should be estopped be comes moot, and the evidenc e of suc h conduct ne ver ne ed be pr esente d to the jury . I f the jury deter mines that the defe ndant’s mar k is confusing ly

simil ar to the pla intiff’s, the evide nce on the iss ue of the pla int if

f’ s e sto pp e l c an th e n b e pr e se nte d to the jur y . I f t he tr ia l is bif

ur c a te d in thi s fashion, the jury

will not hear the e vidence of the plaintiff’ s acquie scenc e while c onsideringthe qu e sti on of c on fu sin g sim ila

ri ty of the mar

ks. The evide nce of

the settlement discussions thus c ann ot i nf

lue nc e the jur

y wi th r e sp e c t to iss ue s a s to wh ic h th a t e vid e nc e is e xclu de d b y Rul e 408. Had PRLfea

red that the evidenc e of a cquiesc ence might improper ly influence the jury

on the issue of c onfusing simil arity of the mar

ks, it mi g ht have a sked the c ourt to consider suc h bifurca tion. 8 1 (4th ed. 20 08 ). Th e USP A p re se nte d e vid e nc e that it h a d r e c e ive d s uc h a ssu ra nc e s f ro m PRL wi th 2 re sp e c t to a

ve rs ion of a doub le ho rs e me n ma rk . T he on ly

wa y it c ou ld p la c e its e nti tle me nt t o 3 e sto pp e l in c on te nti on wa s by of fe ri ng that e vid e nc e . Whil e we re c og nize that in so me ins tanc e s a 4 de fe nd ant c ou ld e mpl oy a c la im o f e sto pp e l pretex tu all y and a bu siv e ly a s a plo y to s ug g e st 5 impermissible infere nces de rived fr om settlement discussions, thi s was not such a case . 2 6 7 b. PRL contends that proving the de fe ns e of esto

pp e l is ba rre d by Ru le 40 8 be c au se it wo uld 8 establish the “invalidi ty of [PRL’s] claim.” PRL ’s sec ond contention with respe ct to the evidenc e 9 of its c on du c t du

ri ngthe se ttl e me nt n e g oti a tio ns is that Ru le 40 8 b y its lit e ra l te rm s p ro hib ite d it s 10 rec eipt, even when off ere d to pro ve an e stoppel defe nse. The Rule pr ovides that “c onduct or 11 state me nts ma de in c omp ro mis e ne g oti a tio ns ” are “ no t a dmi ssi ble to pr ov e lia bil ity fo r or

inv a lid ity 12 of [a] claim.” Fe d. R. Evid. 408 (2005). Wi t h o u t d o u b t , the evidenc e wa s of “c onduct [and] 13 state me nts ma de in co mpr omi se ne g oti a tio ns .” I n ad dit ion , it wa s, in a se ns e , o ff e re d to de mon str a te9 1 the “invalidity ” of PRL ’s claim of tra demar k infring ement. I f the de fenda nts’ claim of e stoppel 2 wo uld

su c c e e d, PRL ’s c la im of

inf ri ng e me nt w ou ld f

a il. I t f oll ow s, a c c or din g to P RL ’s argume nt, 3 that the evidenc e wa s offe red for t he prohibit ed purpose of proving the “invalidity ” of its claim, and 4 was thus prohibited by Rule 408. 5 The proble m w ith PRL ’s cleve r argument is that it would deprive Rule 408’s exception of 6 all meaning . The e x cep t i o n t o the Rule asser ts that the Rule “does not re quire e x clusion [of 7 se ttl e me nt e vid e nc e ] wh e n th e e vid e nc e is off ere d f or ano the r p ur

po se ” tha n th os e e xpre ssl y 8 prohibited. I t goe s on to of fer as examples of permissible purposes “proving bias or prejudice of a 9 witness, [and] neg ativing a contention of undue delay .” The purpose of proving the bias or pr ejudice 10 of one’ s adver sary ’s witness would be to def eat the a dversa

ry ’s claims or c o n t en t i o n s . Such 11 evidenc e would be of fer ed by a plaintiff to help e stablish its claim, by showing the unre liability of 12 a def

ense w itness, or by

a defenda

nt to show the i nvalidity of t he plaintiff’ s claim, by showing the 13 unreliability o f a plaintiff’s witness. Similarly , for a plaintiff to offe r evide nce of the def endant’ s 1 4 c o n d

u c td u r i n g s e t t l e m e n tn e g o t i a t i o n s t o “ n e g a t i v [ e ] [ t h e d e f e n d an t ’ s ] c o n t e n t i o no f

u n d u e d e l ay” 15 on plaintiff’s par t, would ultim ately

seek to e sta b l i sh the plaintiff’s c laim by defe ating the 16 defe ndant’s af

firmative de fense . I f we acc epted PRL ’s re adingof the Rule, it would forbid use of 17 the ve ry

e xamp le s g ive n in

the Rul e a s a

n e xce pti on

to i ts p ro hib iti on . A ll o f the e vid e nc e a pa rt y 1 8 o f

f e r s a t t r i a l i s i n t e n d e d t o h e l p e s t a b l i s h i t s o w n p o s i t i o n an d d e f e a t t h e a dv e r s ar

y ’ s p o s i t i o n . In 19 a se ns e , a ll e vid e nc e of

fe re d s e e ks e ith e r t o “ pr ov e lia bil ity fo r o r i nv a lid ity

of [a] c la im o r its 20 amount.” I f we acc epted PRL ’s contention of the meaning of t he Rule, t here would be no evide nce 2 1 fall in g w it

h in th e c a te g o r

y w h o s e e xc lu s io n is “ n o t r e qu ir e [d ]” b e c a u s e it is “ o f

f e r e d f o r anothe r10 1 purp os e .” Th e e xce pti on wo uld be me anin g le ss. 2 The e x ception cle arly intends to e x empt from the a bsolute prohibition of the Rule evidence 3 fo c us e d o n is su e s d if fe re nt f ro m th e e le me nts of

the pr ima ry c la im i n d isp ute

. Th e se c on d e xamp le 4 offe red, involving a conte ntion of undue dela y , is very like the pre sent issue of estoppe l by 5 acquie scenc e. A de fenda nt might see k to defe at a plaintiff’ s claim by contending that p l ai n t iff 6 forf

eited the c laim by

undue dela

y in bring ing it, to the def

endant’ s detriment. T h at wo u l d be an 7 aff irmative def

ense. The defe nse, whe ther a dvancingit or “neg ativing” it, would i n v o l v e issues 8 differ ent from the e lements of th e p l ai n t i ff’ s claim. Simi larly , estoppel by acquie scenc e is an 9 aff irmative def

ense, w hich raises issues differ ent from the elements of a claim of infr inge ment. See 10 S ta r te r Co r

p . v . Co n v e r

s e, Inc. , 1 7 0 F.3d 286, 293- 94 (2d Cir. 1999) (a ffirmingdistrict court’s 11 de c isi on

to ad mit se ttl e me nt e vid e nc e to p ro ve an e sto pp e l c la im, and no tin g that th e “ ba sic e le me nts 12 of estoppel” do not “over lap with fac tors used t o d et er m i ne likelihood of conf usion betwee n 13 trade marks”)

. 14 Whil e we have no ne ed in this c ase to determine the full rang e of a ccommodation betwe en 15 Rul e 40 8’s pr oh ibi tio n a nd its e xce pti on , it

se e ms c le ar t

hat th e fi rm

pr oh ibi tio n s ho uld

no t a pp ly 16 to the aff

irmative def

ense of estoppel by acquie scenc e, which depende d on issues distinct from the 17 elements of t h e cla im of infring ement. To pre vent a de fenda nt from provingan estoppe l by 18 a c qu ie sc e nc e that aro se duri ngse ttl e me nt n e g oti a tio ns wo uld un fa ir ly c ur ta il a de fe nd ant’ s a

bil ity 19 to rely

on that defe nse. A discussion betwe en a trade mark owner and a potential user of a similar 20 mark in which the owner g ives assura

nce that it will not sue for i n fr i n gem ent m ay well be 21 c ha

ra c te ri zed a s c omp ro mis e ne g oti a tio ns . T o c on str ue Rul e 40 8 a s ba

rr ing su c h e vid e nc e wo uld11 1 su bs tanti a lly

lim it t he op po rt un ity of de fe nd ants to r e ly on the de fe ns e of

e sto pp e l, e ve n w he n w e ll 2 substantiated. See B ankcard Am ., Inc. v . Universal Banc ard Sys., Inc

. , 203 F.3d 477, 484 (7th Cir. 3 2000) (“ I t would be an a buse of Rule 408 to allow one party during compromise neg otiations to l ead 4 his opponent to believe that he will not enforce applicable time limi tations and then objec t when the 5 op po ne nt atte mpt s to pr ov e the wa ive r o f t ime lim itatio ns . Simi larl y , it wo uld be an a bu se of Rul e 6 408 to le t B ankca rd lull Univer sal into br eac hing the contra ct and then preve nt Universal fr om 7 explaining its actions beca use the lulling took plac e ar ound t h e s ettlement table.” ) (c iting Charle s 8 Alan Wright & Kenne th W. Graham, Jr., Fe de ra l Prac tic e an d Pro c e du re§ 5312, at 273 n.5 (1980))

. 9 PRL cites our decision in Trebor Sportsw ear Co., Inc. v . The Limited Stores, Inc. , 865 F.2d 10 506 (2d Cir. 1989), in support of its contention that the evidence was barred by Rule 408. I n Trebor , 11 the plaintiffs sued f or bre ach of

contra ct and of

fer ed settlement e vidence for the pur pose of 12 disproving the defe ndant’s statute of f rauds de fense . The district court excluded the evidenc e under 13 Rule 408, and we aff irmed. We noted t hat whil e the evidenc e mig ht have be en usef ul to satisfy

the 14 statute of fr auds, it was also “ the nec essar y first step to proving , u l t i m ately , the validity of [the 15 plaintiffs’] c laims of brea ch of contra ct.” Id. at 510. We wrote that, “[s] ince the two questions were 1 6 so cl o s e ly in te rtw in e d , a dmi s s io n o f th e d o c u me n ts e v e n in it ia ll y f o r th e p u r p o s e o f me e ting the 17 statut e of

fr a ud s r e qu ir e me nt w ou ld, un de r t he c ir c ums tanc e s o f t

his c a se , mi lit a te a g a ins t th e pu bli c 18 policy

considera

tions which favor

settlement neg otiations and which under lie Rule 408.” Id. 19 Trebor

is quite differe nt from this case. F irst, in Trebor , the purpose for which the settlement 20 evidenc e wa s arguably permissible – provingcompliance with the statute of fr auds – share d 21 signific ant over lap with the purpose f or which the eviden ce wa s clea rly excluded by

Rule 408 –12 1 proving the plaintiffs’ br eac h of contra ct claim. Proving co mpliance with the statute of fra uds by 2 prese nting a

signe d writing evidenc ing a n ag ree ment i s al s o, in effe ct, provingthe contra ct – a 3 nece ssary

element of the pl aintiffs’ breac h of contract claim. That evidence lay close to the Rule’s 4 cate g orica l prohibition of evidence proving liability

. Her e, by contra st, the elements of the USPA’s 5 claim of e stoppel are distinct from the eleme nts of PRL ’s claim of infr inge ment. 6 Second, P RLmisunderstands our rulingin Trebor

. We did not rule that the exclusion of the 7 evidenc e wa s mandated. We said only that the district court’s de cision to ex cl u d e i t wa s not an 8 abuse of

discretion. Id. at 511

. Al t h o ug h Rule 408 speaks c ateg orica lly of the inadmissibilit y

of 9 se ttl e me nt e vid e nc e to p ro ve the va lid ity or inv a lid ity

of a c la im, the te rm s o f t

he e xce pti on

are le ss 10 categ orica l. The exception say s only that “[t] his rule . . . d

o es n o t r e q u ir e e

x clusion when the 11 evidenc e is offe red f or anothe r purpose ,” F ed. R. Evid. 408 (2005) (empha sis added), le aving the 12 court wide discretion whether to admit or exclude. Our conc lusion in Trebor that the district court 13 had discre tion to ex clude the e vidence of compromise ne g ot i at ions did not m ean that the district 14 court in Trebor

wa s required

to e xclu de that e vid e nc e , and in no wa y su pp or ts PRL ’s c on te nti on

in 15 thi s c a se that th e dis tr ic t c ourt wa s r e qu ir e d b y

Rul e 40 8 to e xclu de it.

16 c. PRL contends it suffered “spillover” prejudice. PRL ’s thi rd c on te nti on

is that, 17 notwithstanding a dmissibi lity of the settlement e vidence to pr o v e estoppe l, PR Lsuffe red “ spillover” 18 prejudice resulting from the jury ’s impermissible use of the evidenc e to suppor t the infere nce that 19 PRL did not believe USPA’s marks would be likely to cause confusion, and that they in fac t were 20 not likely

to cause confusion.13 1 We considere d a similar claim in Starter Corp. v. Converse, Inc . Star t er h ad s u ed for 2 d ec l ar at o ry

j u d gm en tt o t h e e ff

ec tt h at i t s u s e of i t s “S t ar t er S t ar M ark s ” on s h o es d i d n o ti n fr i n ge 3 Converse’ s mark. Converse as s erte d an equitable estoppel def ense ba sed on Starter ’s prior 4 repr esenta tions an d a g r e e me n t t

h a t i t w o u ld

n o t u s e it s St ar

M ar k s o nf o o tw e ar . A t t

r ia l, St arter 5 soug ht to preclude Converse, unde r Rule 408, from r efe rring to letters exchang ed betwe en the pa rties 6 in c onne c tio n wi th the ir se ttl e me nt a g re e me nt. Th e dis tr ic t c ourt he ld that the le tte rs we re a dmi ssi ble 7 as evide nce of

Converse’ s estoppel defe nse. We uphe ld this ruling , finding that any likelihood of 8 “spillover” pr ejudice w as ade quately addre ssed by the court’s instructions to the jury

. Starter , 170 9 F.3d at 290-94. 10 Whil e Starter and this c ase are not pr ecise ly alig ned, we hold that the district court did not 11 abuse its discre tion, and that any “spillover” pr ejudice to PRLfrom this evidenc e was insufficient 12 to r e qu ir e re tr ia l. I n the fi rs t pla c e , the a g re e me nt as se rt e d by USP A, that PRL wo uld a llo w U SPA 1 3 t o u s e i t s m ark , ap p l i ed o n l y t o o n e of US P A’ s m ark s , an d t h e ju ry fo u n d t h at m ark t o b e i n fr i n gi n g. 14 The other

USPA marks had no t b ee n i n discussion at the time of PRL ’s alleg ed conc ession. 15 Fur

thermore , the jury

found ag ainst USPA on it s equitable e stoppel defe nse. In short, it appear s that 16 there was no pre

judice to PRL from the r ece ipt of this evidence. 17 PRL nonetheless a sserts that the ar g uments of USPA’s counsel were improper in that they 18 imp lie d th a t PRL be lie ve d that the re wa s no lik e lih oo d of c on fu sio n. Th is a rgume nt i s n ot f

ri vo lou s. 19 USP A’ s c ouns e l ma de c omm e nts duri ngop e nin g and c los ingarguments to th e e ff e c t th a t PRLFor

example, USPA counsel stated duringhis opening that “as PRLtold the USPA . . . these are 3 distinct marks that are not confusing .” In closing , he said, in re fer ence to former PRL g ener al counsel L ee Sporn, “ [h] e thoug ht these we re distinct,” a nd “he told us on the phone call it was distinct.” J ordac he counse l told the jury during his opening that “you will know from evidenc e that even Ra lph L aure n didn’t think they wer e conf

using . . . e vidence that Ralph L aure n knew the double horse did not infringe its rights.” 14 1 believed U SPA’s marks wer e distinct and non-infr inging

. USPA, nonetheless, primarily used the 3 2 settlement evidenc e for its estoppel defe nse, and not a s proof of a purported be lief on P RL ’s par t that 3 the marks we re distinct. The c omments during ope ning a nd closing wer e proba

bly improper, but 4 the y

we re no t of

su ff ic ie nt s ig nif

ic anc e to w arr ant r e tr ia l. 5 PRL

argue s f ur the r t hat th e dis tr ic t c ourt erred by re fu sin g to g ive a

lim iti ngins tr

uc tio n it 6 reque sted on the use of settlement evidenc e. The lang uag e of the reque sted instruction would have 7 require d the jury

to ignor e any

evidenc e that it conclude d was made in the cont ex t of settlement 8 neg otiations, reg ardle ss of whether the settlement evidence was re ceive d for a purpose a

uthorized 9 by Rule 408. The reque sted instruction w as thus c ontrary to the plain lang uag e of Rule 408, a nd the 10 district court di d not err in refusingto give it. See Clark v . Pa. R.R. Co. , 328 F.2d 591, 595 ( 2d Cir. 11 1964) (“ [A] failure to gr ant a r equest for instructions that are in a

ny respe ct incorr ect a

nd unsound 12 does not constitute err or.”) . PRL never reque sted an appr opriate limiting instruction telling the jury 13 fo r what pu

rp os e the y

c ou ld, and

c ou ld n ot, c on sid e r t

he se ttl e me nt e vid e nc e . We c ann ot t e ll 14 whether P R L ’s fa ilure to reque st an appropr iate limiting instruction was strateg ic. Counsel often 15 pr efer not t o p ro po se a lim iti ngins tr

uc tio n b e c a

us e the ins tr

uc tio n ma y c a ll the jur

y ’s a tte nti on

to 16 the ha

rm fu l e vid e nc e . N on e the le ss, wh a te ve r t he re a so n f

or PRL ’s fa ilure to r e qu e st a n a pp ro pr iate 17 limit ing instruc tion, PR Lcannot now c omplain of a lac k of one.15 1 I I . “Safe Distance ” Jury I nstruction 2 PRL ’s sec ond argument is that the di strict court erre d in ref using to instruct the jury

that, as 3 a pre viously

adjudicate d infring er, the USPA was require d to keep a safe distance from PRL ’s mark. 4 PRL

re qu e ste d th a t th e jud g e ins tr uc t th e jur

y a s f oll ow s: 5 I n th e De c e mbe r 6 , 1 98 4 F ina l O rd e r, Judg me nt a nd De c re e . . . th is C ourt

pr e vio us ly 6 fo un d th a t U SPA we re int e nti on a l in fr ing e rs of Pol o Ra lph

L a ur e n’ s r e g ist e re d Po lo 7 Play er Sy

mbol trademar

ks. Under the trade mark law, a prior adjudicate d infring er 8 of anothe r’s tra demar ks must thereaf

ter ke ep a sa fe distanc e and w ill be held to a 9 hig he r s tand ard of c on du c t w ithre sp e ct to the a do pti on of a ne w m ark

tha n w ou ld 10 have be en applied in the f irst instance. . . . [Y]ou shoul d . .

. deter mine for yourselves 11 whether

USPA has satisfied its obligation to kee p a saf e distance from P o l o Ralph 12 L a

ur e n’ s r e g ist e re d Po lo P lay e r S y mbo l tr a de mark s in

a do pti ngand

us ingthe do ub le 13 horsemen ma rks at issue in this case. 14 An obligation on the part of a previously

adjudicate d infring er to maintain a s afe distance 15 from infring ing the plaintiff’s mar ks has bee n found to serve a usef ul purpose in fa sh ioning 16 injunctions based on a finding of infring ement, see Patsy’s Brand, Inc . v. I.O .B. Realty, I nc. , 317 17 F .3 d 2 09 , 2 20 (2 d Ci r. 20 03 ); Cumulus Media, Inc. v . Clear Channel Commc’ns, Inc

. , 304 F.3d 18 1167, 1179 (11th Cir. 2002); Sunbeam Prods., Inc. v . W est Bend Co. , 123 F.3d 246, 260 ( 5th Cir. 19 1997), abrogated on other grounds by TrafFix Device s, Inc. v . Marke ting Displays, Inc. , 5 32 U. S. 20 23 (2001), e specia lly wher e the infr inge ment was a busive or in bad f

aith, Tamko Roofing Prods., Inc. 21 v. Idea l R o o

f i n g Co., Lt d. , 282 F.3d 23, 40 ( 1st Cir. 2002); 5 J . Thomas McCar thy , McCarthy on 22 Trademarks and Unfair Co mp etition § 3 0:4 (4 th e d. 20 08 ). I t ha s a lso be e n f ound us e fu l in 23 contempt proc eeding s, in determining whether an enjoined inf

ring er ha s violated the injunction, thus 24 re lie vin g the re vie wi ngc ourt of the ne e d to re tr y the e nti re ra

ng e of iss ue s th a t ma

y be re le va nt i nPRL cites our summary order Espinoza v. Allen Imps. &Trade Corp. , 100 F.3d 942, 4 No. 95-7531, 1996 WL19142 (2d Cir. J an. 17, 1996) ( unpublished table dec ision), as an example of a c ase in whic h we a pproved the use of the sa fe distanc e conc ept in circ umstances oth e r t ha n th e fr amin g of

an in jun c tio n o r a dju dic a tin g a c on te mpt . H ow e ve r, our b ri e f o rd e r i n Es pin oz a do e s n ot m ake c le ar what r ole sa fe dis tanc e pla y e d in the dis tr ic t c ourt ’s de c isi on to enjoin use of a

mark, or in our

aff irmance . Moreove r, it appea rs from its sketchy

descr iption that the us e of sa fe dis ta nc e – b oth

by the dis tr ic t c ourt

and by thi s c ourt on a pp e a l – w a s su

pe rf luo us , beca use the district cour

t had deter

mined that the same ma

rk that did not keep a

“saf e distance ” also ca used likelihood of conf

usion, and we a ffirme d that finding

. Id. at *2.

16 1 an infring ement ac tion for ea ch small variation the defe ndant makes to the enjoined mark. See W e lla 2 Corp. v

. W

ella Graphics, Inc

. , 3 7 F .3 d 4 6, 48 (2 d Ci r. 19 94 ); Badger Meter, Inc. v. Grinnell Corp. , 3 13 F.3 d 11 45 , 1156 (7 th C ir . 1 99 4) ; Oral-B Labs., Inc. v . Mi-Lor Corp. , 8 1 0 F

. 2 d 2 0 , 2 4 ( 2 d

Cir. 4 1987), abrogated on other grounds by Paddington Corp. v. Attiki Imps. &Distributor s, Inc. , 996 5 F .2 d 5 77 (2 d Ci r. 19 93 ); Scandia Down Corp. v. Euroquilt, Inc. , 7 7 2 F. 2 d 1 4 23, 1432 (7th Cir. 6 19 85 ); Br od

e ric k & Ba sc om Ro

peCo. v . M

an off , 41 F.2d 353, 354 (6th Cir. 1930); 5 J

. T h omas 7 McCarthy , McCarthy on Trademark s and Unfair Competiti on § 30:21 (4th ed. 2008). 8 PRL , h ow e ve r, c ite s n o a uth or ity e sta bli sh ing that suc h a

n in str uc tio n mu st b e g ive n in

a c ivi l 9 infring ement ac tion alleg ing a new infringe ment by one pre viously

adjudicate d to have infr inge d the 10 plaintiff’s mar

k. When one sues for infring ement of a trade mark, the standa

rd that come s into play 4 11 is whether the seconda ry mark is likely

to caus e co n fu s i on. I nsertion of the c oncept of “saf e 12 distance” would chang e the standa rd of liability . I f the “saf

e distance” instruction w ere used, the jury 13 would be invited to find liability based on a

mark whic h was not likely to cause confusion, leaving 14 unclea

r to the jurors whic h standard should g overn. 15 Fur

thermore , the re quested instruction wa s particular ly inappropriate i n view of the terms of 16 the pre vious injunction gover ning U SPA’s condu ct

. T h at i njunction, issued in 1984, prohibiti ng17 1 USPA from infring ing PRL ’s marks, expressly provided that USPA remained f ree to use “a

mounted 2 polo play er or equestria n or equine sy

mbol whic h is distinctive from the [R alph L aure n] polo play er 3 sy mbol . . . .” To instruct the jury that USPA was requir ed to “ke ep a sa fe distance” without further 4 explanation of how this related to USPA’s rig ht, under the injunction, to use a mounted polo play er, 5 c ou ld h a ve le d th e jur y to f ind lia bil ity ba se d o n c on du c t w hic h th e e arl ie r i nju nc tio n h a d e xpre ssl y 6 permitted. We conc lude that the instruction re ques t ed b y PRL would, at the ver

y least, have 7 c on fu se d th e jur

y . We fi nd

no e rr or in t he dis tr ic t c ourt ’s re fu sa l to g ive it.

8 I I I . Ex clusion of the “Ra lph Rip-Off” D ocument 9 Finally , PRL contends that the district c ourt err ed in r efusing to a dmit a document it c alls the 10 “Ralph Rip-Off

.” The document wa s cre ated by Michae l Nowac k, who worked in adver tising and 11 wa s o c c a sio na lly re ta ine d b y

de fe nd ant Jor da c he . T he do c ume nt r e a ds : 12 The Ralph Rip-off. 13 Ev e ryon e kn ow s w e ’r e ri pp ingof f R a lph . Inc lud ingus . 14 I t is the mis sio n o f o ur a dv e rt isi ngto d e ny

it 15 by a pp e ari ngto b e tr

ue to t he sp or t. 16 Af te r a ll, Ra lph

did ri p- of f t he sp or t.

17 PRL contends the doc ument was attributable to J ordac he bec ause it wa s made by J ordac he’s 18 ag ent within the scope of the ag ency

and wa s releva

nt beca us e i t d i sclosed a ba d faith intent of 19 Jord a c he to f

re e -r ide on

PRL ’s mark s. Th e dis tr ic t c ourt e xclu de d th e do c ume nt a s in a dmi ssi ble 20 hear say

and under

Fe dera l R u l e o f Evidence 403, on the ba sis that its probative va lue was 21 substantially

outweig hed by

the likelihood of unfair

prejudice to the defe ndants. 22 Rul e 40 3 all ows the e xclu sio n o f r e le va nt e vid e nc e “ if

its pr ob a tiv e va lue is s ub sta nti a lly18 1 ou tw e ig he d b y the da ng e r of un fa ir pr e

jud ic e ,” a s we ll a s fo r oth e r re a so ns . F e d. R. E vid . 4 03 . T his 2 balanc ing te st nece ssarily aff ords t he trial court considerable discretion. We find no abuse of that 3 discretion in the cour t’s decision to exclude the docume nt. 4 The district cour t conclude d that Nowac k’s document had li ttle or no proper probative va lue 5 as to J ordac he’s intentions, but had an obvious ca pacity to cause prejudice

. We ag ree . So far a s the 6 evidenc e shows, the job for which Nowa ck wa s h i re d b y J o rd ache had nothing to do with the 7 development of

the double horse men marks. He was a ppare ntly hired to col l ec t q u otations from 8 famous people relating to the sport of polo. Accor dingly , Nowac k was not Jordache’ s authorized 9 repr esentative on the issue of the cre ation of the double horsemen marks. His state of mind was not 1 0 at t ri b u t ab l e t o J o rd ac h e. Fu rt h erm o re , s o fa r a s t h e e v i d en ce s h o we d , No wa ckh ad n o kn o wl ed ge 11 of J ordac he’s intentions re lating to the marks. There was littl e or no basis for fi n d i n g t h at the 12 sentiments he expressed in the doc ument char acte rized J ordac he’s intentions in its development of 13 its ma

rk s. The pr op e r p ro bativ e va lue of the e vid e nc e wa s e ith e r m ini ma l or no n- e xiste nt a

nd its 14 capa city for prejudice was hi g h. We find neither e rror nor abuse of discre tion in the dist rict cour t’s 15 deter

mination to ex clude it.

16 Conclusion 17 We a ff

ir m th e jud g me nt o f t

he dis tr ic t c ourt

.