**13-1038-cv(L) U.S. Polo Ass’n, Inc. v. PRL USA Holdings, Inc.** 
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2 August Term, 2013 3
4 (Argued: February 19, 2014 Decided: May 13, 2015) 5 6 Docket Nos. 13-1038-cv(L), 13-1130-cv(CON) 7

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 8 UNITED STATES POLO ASSOCIATION, INC., USPA PROPERTIES, INC., 9 10 Plaintiffs-Counter-Defendants-Appellants , 11 12 JRA TRADEMARK COMPANY, LTD., 13 Intervenor-Plaintiff-Appellant , 14 15 v. 16 17 PRL USA HOLDINGS, INC., L’OREAL USA, INC., 18 19 Defendants-Counter-Claimants-Appellees

. 20

- - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - 21 22 B e f o r e: KEARSE, WINTER, and WESLEY, Circuit Judges

. 23 24 Appeal from a contempt judgment entered in the United States 25 District Court for the Southern District of New York (Robert W. 26 Sweet, Judge ). We vacate and remand. 27 28 KYLE C. BISCEGLIE (Matteo J. 29 Rosselli, on the brief ), Olshan 30 Frome Wolosky LLP, New York, NY, 31 forPlaintiffs-Counter-Defendants32 Appellants

. 33 34 MICHAEL S. SOMMER (Jessica L. 35 Margolis & Scott D. Tenley, on the 36 brief ), Wilson Sonsini Goodrich & 37 Rosati, P.C., New York, NY, for 38 Intervenor-Plaintiff-Appellant

. 39 40

1JOHN M. CALLAGY (William R. Golden, 1 Jr., Andrea L. Calvaruso, Taraneh 2 J. Marciano, on the brief ), Kelley 3 Drye & Warren LLP, New York, NY, 4 for Defendants-Counter-Claimants5 Appellees

. 6 7 WINTER, Circuit Judge : 8 9 This appeal is the latest chapter in a now over-30-year 10 dispute involving trademarks relating to the sport of polo used 11 on consumer goods. United States Polo Association, Inc. and USPA 12 Properties, Inc. (together, “USPA”) and USPA’s licensee, JRA 13 Trademark Co., appeal from Judge Sweet’s order of contempt 14 finding USPA in violation of a permanent injunction. The court 15 held that appellants’ logo on eyewear products was confusingly 16 similar to the logo used by appellees PRL USA Holdings, Inc. and 17 L’Oreal USA, Inc. (together, “PRL”) on PRL’s eyewear products. 18 USPA argues that the underlying injunction did not enjoin all 19 uses of the mark. We agree and vacate the contempt order and 20 remand for further proceedings. 21
BACKGROUND 22 USPA is the governing body of the sport of polo but also 23 markets certain consumer goods, often in competition with PRL. 24 PRL owns the trademark rights and exclusive licenses for the Polo 25 Ralph Lauren brand, which includes the “Polo Player Logo” –- an 26 image depicting a mounted polo player with a raised mallet -- and 27 the “POLO” word mark. 28 29
2a) The 1984 Injunction 1 The conclusion of the opening litigation occurred in 1984, 2 when, after a bench trial, Judge Sand issued an injunction 3 against USPA. U.S. Polo Ass’n v. Polo Fashions, Inc. , No. 84 4 Civ. 1142 (LBS), 1984 WL 1309 (S.D.N.Y. Dec. 6, 1984) (“1984 5 Injunction”). The 1984 Injunction prohibited USPA, interalia , 6 from “using any of the [PRL marks] or any name or mark or symbol 7 which is confusingly similar thereto, in connection with the sale 8 . . . of any goods or the rendering of any services[.]” U.S. 9 Polo Ass’n v. PRL USA Holdings, Inc. , No. 09 Civ. 9476, 2013 WL 10 837565, at *1 (S.D.N.Y. Mar. 6, 2013). While the 1984 Injunction 11 applied to all markets, the term “confusingly similar” was not a 12 bright line. Rather, as amplified in subsequent litigation, 13 discussed infra , its meaning turned on a comparison of competing 14 logos and the words associated with them, seePRL USA Holdings, 15 Inc. v. U.S. Polo Ass’n , 520 F.3d 109 (2d Cir. 2008), and varied 16 with the nature of the various markets in which the logos and 17 words are used, seeU.S. Polo Ass’n v. PRL USA Holdings, Inc. , 18 511 F. App’x 81 (2d Cir. 2013) (summary order). 19 b) The Apparel Litigation 20 The mark at issue in this appeal is styled the “Double 21 Horsemen Mark.” It depicts two mounted polo players vying for a 22 ball. When USPA began using four variations of this mark in 23 1996, PRL brought an action seeking to enjoin its use on a 24 variety of products (“Apparel Litigation”). 25

3In 2003, the parties resolved most of the issues in a 1 settlement agreement involving a number of USPA logos and word 2 marks. However, the parties went to trial on whether four 3 varieties of the Double Horsemen Mark infringed PRL’s marks. 4 After a three-week trial, the jury concluded that three of four 5 Double Horsemen Marks, seeNote 1 infra , did not infringe PRL’s 6 marks in the markets for apparel, leather goods, and watches. 7 PRL USA Holdings, Inc. v. U.S. Polo Ass’n , No. 99-cv-10199(GDB), 8 2006 WL 1881744, at *3 (S.D.N.Y. July 7, 2006). We affirmed. 9 PRL USA Holdings, Inc. , 520 F.3d at 119. 10 c) The Fragrance Litigation and Injunction 11 After conclusion of the Apparel Litigation, USPA continued 12 using the Double Horsemen Mark1on a variety of products. In 13 2009, USPA expanded its marketing into fragrance products. After 14 failed negotiations with PRL, USPA sought a declaratory judgment 15 that, interalia , the Double Horsemen Mark did not violate 16 Sections 43(a) and (c) of the Lanham Act, 15 U.S.C. § § 1125(a), 17 (c), when used in connection with its fragrance products 18 (“Fragrance Litigation”). PRL and its licensee, L’Oreal USA, 19 Inc., brought trademark counterclaims for infringement and sought 20 an injunction against the use of the Double Horsemen Mark, the 21

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. SeePRL USA Holdings, Inc. , 2006 WL 1881744, at *1. 4word mark, “U.S. POLO ASSN,” and “1890" (the year USPA was 1 founded) on “fragrance or cosmetics products.” 2 After a bench trial, Judge Sweet rejected USPA’s claims, 3 holding that using the Double Horsemen Mark on fragrance products 4 violated PRL’s trademark rights. U.S. Polo Ass’n v. PRL USA 5 Holdings, Inc. , 800 F. Supp. 2d 515, 542 (S.D.N.Y. 2011). The 6 court held that USPA’s favorable verdict in the Apparel 7 Litigation did not dictate the outcome in the Fragrance 8 Litigation because the apparel decision did not “address[] the 9 marks at issue here in the fragrance market.” Id. at 529. 10 In March 2012, the district court entered a permanent 11 injunction enjoining USPA from using the Double Horsemen Mark on 12 fragrances and related products (“Fragrance Injunction”). 13 Paragraph 3, the basis of the district court’s contempt finding 14 in the present matter, enjoined USPA from: 15 a. Using the Double Horsemen Mark . . . alone 16 or in combination with any name, symbol, 17 device, or other word(s) in connection with 18 the advertising, promotion, offering for sale 19 or sale of fragrances or related products 20 such as cosmetics, personal care products and 21 beauty products; 22 23 b. Using the word “POLO” alone or in 24 combination with any name, symbol, device or 25 other word(s) in connection with the 26 advertising, promotion, offering for sale or 27 sale of fragrances or related products such 28 as cosmetics, personal care products and 29 beauty products; 30 31 32
5c. Using the PRL marks or any other name or 1 mark, including the image of one or more 2 mounted polo players, that constitutes a 3 colorable imitation of or is confusingly 4 similar to PRL’s Polo Player Logo . . . or 5 “POLO” word mark in connection with the sale 6 or offering for sale of any goods or 7 rendering of any services; 8 9 d. Using for any commercial purpose 10 whatsoever any symbol, logo, trade name, 11 trademark, or trade dress that which is 12 calculated to or has the effect of 13 representing that the products or services of 14 or licensed by the USPA Parties are 15 associated with, sponsored, endorsed, or 16 authorized by, or are in any way connected or 17 associated with the PRL Parties or any entity 18 affiliated with them. 19 20 U.S. Polo Ass’n , 2013 WL 837565, at *4; seealsoU.S. Polo Ass’n 21 v. PRL USA Holdings, Inc. , No. 09 Civ. 9476, 2012 WL 697137, at 22 4-5 (S.D.N.Y. Mar. 5, 2012). USPA appealed the injunction, and 23 we affirmed by summary order. U.S. Polo Ass’n , 511 F. App’x at 24 82. On its appeal, USPA argued that the Apparel Litigation 25 precluded the injunction. However, we rejected that argument on 26 the ground that the issue of confusing similarity regarding 27 USPA’s use of the Double Horsemen Mark was market-specific. Id. 28 at 83-84. We also rejected USPA’s argument that the Fragrance 29 Injunction’s terms were overbroad, in part because of the 30 district court’s finding of bad faith which we declined to 31 overturn, but also because Paragraph 3(c), which applies to all 32 markets, merely tracked the 1984 Injunction, to which USPA was 33 already subject. Id. at 86. 34

6d) The Contempt Order 1 Between 2009 and 2012, USPA sold nearly one million pairs of 2 sunglasses bearing the Double Horsemen Mark. In August 2012, PRL 3 moved for an order of contempt, claiming that USPA violated both 4 the 1984 Injunction and the Fragrance Injunction by its use of 5 the Double Horsemen Mark on eyewear. The district court issued a 6 contempt order based on its finding that there was clear and 7 convincing evidence that USPA violated Paragraphs 3(c) and (d) of 8 the Fragrance Injunction. U.S. Polo Ass’n , 2013 WL 837565, at 9
*9-14. 2 10 The district court held that: (i) Paragraph 3(c) of the 11 Fragrance Injunction clearly and unambiguously applied to all 12 markets, id.at *9-12; (ii) PRL proved by clear and convincing 13 evidence that “the Double Horsemen Mark is a ‘colorable 14 imitation’ or is ‘confusingly similar’ to PRL’s Polo Player 15 Logo,” id.at *12; and (iii) USPA did not diligently comply with 16 the Fragrance Injunction, id.at *13. In reaching these 17 conclusions, the court declined to engage in a market-specific 18 analysis ofwhether use of the Double Horsemen Mark in eyewear 19 was confusingly similar to PRL’s use of its marks in that market. 20 In relying on Paragraph 3(c) of the Fragrance Injunction, the 21 court held that a market-by-market analysis was inappropriate in 22

2The 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. 7the context of a motion for contempt. This ruling was based on 1 our decision in Wella Corp. v. Wella Graphics, Inc. , 37 F.3d 46, 2 48 (2d Cir. 1994) (holding that the district court erred in 3 considering the Polaroidfactors, Polaroid Corp. v. Polarad 4 Elecs. Corp. , 287 F.2d 492, 495 (2d Cir. 1961), in making its 5 contempt determination). 3 6 Finally, because PRL had been on notice of USPA’s use of the 7 Double Horsemen Mark in eyewear for at least two years prior to 8 its motion for a contempt judgment, the court awarded PRL only 9 prospective relief -- that is, “future profits of any sales of 10 sunglasses containing the Double Horsemen Mark sixty days 11 following the [court’s] order.” U.S. Polo Ass’n , 2013 WL 837565, 12 at *15. 13
DISCUSSION 14 We review a contempt order with a “more exacting” version of 15 the abuse-of-discretion standard. Perez v. Danbury Hosp. , 347 16 F.3d 419, 423 (2d Cir. 2003). Before issuing a contempt order, a 17 district court must find that the alleged contemnor had notice of 18 the underlying order, that the terms of the order were clear and 19 unambiguous, and that proof of noncompliance was clear and 20

3 We note that the Polaroidtest is not strictly in issue here because Polaroidinvolved 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 industrywhere the marks compete.”) (emphasis added). 8convincing. Perfect Fit Indus. v. Acme Quilting Co., Inc. , 646 1 F.2d 800, 808 (2d Cir. 1981). The district court’s underlying 2 factual determinations are reviewed for clear error, but 3 questions of law, including interpretation of the order, are 4 reviewed de novo . Latino Officers Ass’n of N.Y., Inc. v. City of 5 New York , 558 F.3d 159, 164 (2d Cir. 2009). 6 Central to this appeal is whether the district court’s 7 finding of a violation of the Fragrance Injunction by USPA’s use 8 of the Double Horsemen Mark on eyewear required application of 9 market-specific standards. 10 Our resolution of what conduct is barred by the Fragrance 11 Injunction and of whether USPA engaged in such conduct requires 12 scrutiny of the history of the parties’ litigation. A critical 13 fact in this history is that, after entry of the 1984 Injunction, 14 a jury in the Apparel Litigation found the Double Horsemen Mark 15 to be non-infringing -- not “confusingly similar” to, or a 16 “colorable imitation” of, PRL’s marks -- when used as a logo in 17 marketing apparel, leather goods, and watches. This verdict 18 clearly indicated at the very least that use of the Double 19 Horsemen Mark is non-infringing in some markets. In the 20 Fragrance Litigation, the district court viewed the verdict in 21 the Apparel Litigation as not binding because of the differences 22 between the apparel and fragrance/cosmetic markets. We agreed 23 and affirmed the Fragrance Injunction. U.S. Polo Ass’n , 511 F. 24 App’x at 82. 25
9However, in the present matter -- the contempt proceeding 1 based on the Fragrance Injunction -- the district court concluded 2 that the Fragrance Injunction barred use of the Double Horsemen 3 Mark in every market but that for apparel. U.S. Polo Ass’n , 2013 4 WL 837565, at *10, 12. We disagree with that ruling. The fact 5 that the Apparel Litigation does not shield USPA’s use of a 6 Double Horsemen Mark on eyeglasses from an infringement finding 7 does not, without more, render it liable for infringement in that 8 and all other markets save for apparel. Indeed, our affirmance 9 of the Fragrance Injunction, in holding that infringement in one 10 industry does not “as a matter of law, preclude a finding of 11 similarity in another,” U.S. Polo Ass’n , 511 F. App’x at 83, 12 stated that a market-by-market analysis is needed. Id. 13 To be sure, Paragraph 3(c) of the Fragrance Injunction 14 applies to all markets, but the language in question merely 15 repeats that of the 1984 Injunction. That Injunction, as our 16 holding in affirming the Fragrance Injunction states, requires a 17 market-by-market analysis regarding confusing similarity. Id.at 18 86 (noting that the Fragrance Injunction pertains to the 19 fragrance market and closely related fields; “[t]o the extent it 20 reaches any further, it merely tracks the language of the 1984" 21 Injunction). 22 Given the present record, it is not apparent that the 23 differences between the fragrance/cosmetic and eyeglass 24

10industries are not as great as the differences between the 1 apparel and fragrance/cosmetic industries. Indeed, at least 2 without an evidentiary record demonstrating otherwise, the 3 eyeglass and apparel industries seem closer to each other than 4 either is to the fragrance/cosmetic market. But, in holding USPA 5 in contempt, the district court declined to apply a market6 specifictest. 7 In holding that the Fragrance Injunction was violated, the 8 district court explicitly rejected USPA’s argument that the order 9 “is limited to fragrance[/cosmetic] products . . . and proof of 10 confusion.” U.S. Polo Ass’n , 2013 WL 837565, at *9. That 11 rejection is not consistent with our decision affirming the 12 Fragrance Injunction or with the arguments that PRL made on that 13 appeal. To be sure, Paragraph 3(c) bars use of “the image of one 14 or more mounted polo players, that constitute a colorable 15 imitation of or is confusingly similar to PRL’s Polo Player logo 16 . . . in connection with the sale . . . of any goods, . . . .” 17 However, as noted, that language merely tracks the 1984 18 Injunction which, as explained earlier, does not bar use of the 19 Double Horsemen Mark in all markets. When entry of the Fragrance 20 Injunction was challenged by USPA on its appeal, PRL’s brief 21 emphasized over and over again that the Fragrance Injunction was 22 limited to the fragrance market, Brief for Defendant-Counter23 Claimant-Appellee at 15, 19, 20, 23, 24, U.S. Polo Ass’n , 511 F. 24

11App’x 81 (No. 12-1346), and to the prohibitions of the 1984 1 Injunction, id.at 29, 31-32. Most importantly, in affirming the 2 Fragrance Injunction against an overbreadth claim, we clearly 3 read the order to apply only to the fragrance/cosmetics market 4 and to be limited to the scope of the 1984 Injunction. We 5 stated: 6 This case presents no concerns akin to those 7 raised in Starter Corp. v. Converse, Inc. , 8 170 F.3d 286 (2d Cir. 1999), where an 9 injunction covered an entire market that was 10 not the one in which the infringing mark was 11 used, and prohibited use of the mark for a 12 category of goods that had been judicially 13 admitted not to be at issue, see id . at 300. 14 Here, the injunction pertains to use of the 15 Double Horsemen logo and the word “polo” in 16 the fragrance market, the focus of this 17 litigation, as well as closely related fields 18 such as cosmetics. To the extent it reaches 19 any further, it merely tracks the language of 20 the 1984 Order, to which USPA was already 21 subject. Moreover, the injunction does not 22 impede USPA’s use of its outlined Double 23 Horsemen mark on apparel, which was found 24 non-infringing in the 2006 litigation, a 25 determination that has issue-preclusive 26 effect here. 27 28 U.S. Polo Ass’n , 511 F. App’x at 86. 29 Therefore, the fact that the Apparel Litigation does not 30 preclude the Fragrance Litigation does not imply that the Double 31 Horsemen Mark infringes PRL’s marks in every market except 32 apparel. It simply means that a finding of confusing similarity 33 must be made on a market-by-market analysis. 34 35

12We acknowledge that confusion may exist as to whether there 1 is an automatic bar to application of a market-by-market test in 2 contempt proceedings. In declining to apply such atest, the 3 district court relied upon our decision in Wella , in which we 4 held that undertaking a market-by-market Polaroidanalysis was 5 error in that particular contempt proceeding. In Wella , a hair6 products manufacturer named “Wella Corporation” sought an 7 injunction against a graphics company named “Wella Graphics” from 8 using the name “Wella.” Wella Corp. , 37 F.3d at 47. Because 9 Wella Graphics never answered the complaint, the district court 10 entered a default judgment, enjoining Wella Graphics from 11 “[u]sing Wella or any mark confusing[ly] similar to [Wella 12 Corporation’s] mark Wella.” Id.Wella Graphics then slightly 13 altered its name to Wello Graphics. The district court held that 14 this change did not warrant a contempt order because the two 15 companies were not in direct competition with one another. Id. 16 On appeal, we held that the district court’s use of a market-by17 market analysis was error. Id. at 48. However, in Wella , the 18 genuinely contested issue was not whether the name “Wello” was 19 “confusingly similar” to the name “Wella” -- it was an obvious 20 attempt at evading the injunction -- but whether the lack of 21 direct competition between the parties rendered the injunction 22 inapplicable. Id.Of course, it did not. 23 Unlike Wella , the present matter is not a case of a minor 24 and immaterial alteration of an unquestionably infringing mark. 25
13Rather, it is a dispute over the use of marks that have been held 1 not to be confusingly similar to PRL’s marks in another major 2 market. By contrast, Wellais limited to cases where a clearly 3 confusingly similar mark is governed by an injunction that 4 applies to all markets. 5 However, we add a word of caution about the use of market6 specific standards in contempt proceedings. The parties bound by 7 an injunction are entitled to clear notice of what specifically 8 they may or may not do, and any test involving a non-exhaustive 9 list of multiple factors, seeBrennan’s Inc. , 360 F.3d at 130, 10 may not yield easily predictable results or fair notice. Use of 11 market-specific standards in contempt proceedings will, 12 therefore, lead to an order of contempt only when reasonably 13 obvious infringement is shown by clear and convincing evidence. 14 There is no record before us as to the application of 15 market-specific factors to the eyeglass and fragrance/cosmetic 16 markets, and we do not preclude a resumption of the contempt 17 proceedings on remand. However, because of the often 18 unpredictable results of market-by-market analysis, a finding 19 that the Double Horsemen Mark is, when used on eyewear, 20 confusingly similar to PRL’s marks, while sufficient to find 21 liability in an infringement proceeding, is not sufficient to 22 support a contempt finding. To hold USPA in contempt, two 23 additional findings must be made: (i) a reasonable firm in 24

14USPA’s position, knowing the context of the Fragrance Injunction 1 -- in particular, the verdict in the Apparel Litigation and our 2 order affirming the Fragrance Injunction that adopted PRL’s 3 arguments described above -- would have been on clear notice that 4 use of the Double Horsemen Mark on eyewear violated the 5 injunction; and (ii) the finding of confusing similarity is 6 supported by clear and convincing evidence. The present record 7 does not support either such finding. 8
CONCLUSION 9 We therefore vacate and remand for further proceedings in 10 accordance with this opinion. Given the efforts this panel has 11 expended on this matter and its resultant familiarity with it, we 12 order that the clerk refer any appeal from an order of contempt 13 based on the Fragrance Injunction involving eyewear to this 14 panel. This directive does not apply to an appeal from a finding 15 of infringement or non-infringement in a new infringement 16 proceeding involving eyewear or one not involving eyewear. 17 18 19 20
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