Opinion ID: 786352
Heading Depth: 4
Heading Rank: 2

Heading: Probative Value of Berg Certification as to Actual Confusion

Text: 88 As Vice President of Marketing, Berg is responsible for Kos's overall marketing strategy and receives reports from district managers who oversee the distribution of [Kos's] drugs ... about significant issues occurring in the marketplace. JA at 68-69. He certified that his staff has reported more than 60 incidents of actual confusion to him. He describes a range of representative ... instances, including: medical professionals providing patients the wrong drug samples and, on one occasion, improperly filling a prescription; doctors complaining to Kos representatives about Advicor, when their complaints really concerned Altocor; and medical professionals confusing Altocor samples with Advicor samples, Altocor representatives with Advicor representatives, or Altocor-sponsored events with Advicor-sponsored events. Id. at 69-71. 89 It may be that the Berg Certification is not competent proof or reliable evidence of any particular incident that it describes. However, as noted above, Berg is competent to attest that he received over 60 reports of alleged confusion, and his credibility as to this assertion has been tested by deposition in the PTO opposition proceedings. Moreover, the very number of reports Berg says he received, and the variety of sources and types of confusion reported, bolster the reliability of the reports as a whole. Courts are entitled to view such diverse reports of confusion as mutually reinforcing, particularly where, as here, the names and products are so similar as to make the reported confusion plausible. Indeed, the reverse may be true as well: here, for example, the 60 reported instances of confusion tend to confirm our determination that the names are confusingly similar. 90 Andrx argues that Kos cannot show trademark confusion because the 60 alleged incidents of confusion comprise too small a percentage of the approximately 350,000 Advicor prescriptions, or the approximately 650,000 combined prescriptions. 18 We have recognized, however, that evidence of actual confusion is difficult to find ... because many instances are unreported. Checkpoint, 269 F.3d at 291. Without knowing how many, or what percent of, incidents go unreported, anecdotal evidence of confusion cannot usefully be compared to the universe of potential incidents of confusion. The rarity of such evidence makes even a few incidents highly probative of the likelihood of confusion. Id. (Because reliable evidence of actual confusion is difficult to obtain in trademark and unfair competition cases, any such evidence is substantial evidence of likelihood of confusion.) (quotation omitted, emphasis added); see also Country Floors, Inc. v. Partnership of Gepner & Ford, 930 F.2d 1056, 1064 (3d Cir.1991) (quoting cases holding that  very little proof of actual confusion would be necessary to prove likelihood of confusion) (emphasis added); cf. Sara Lee Corp. v. Kayser-Roth Corp., 81 F.3d 455, 466 (4th Cir.1996) ([W]e can but wonder how often the experiences related by the trial witnesses have been repeated — but not reported — in stores across the country.). 91 The Berg Certification provides more than enough evidence of actual confusion to support weighing the fourth and sixth Lapp factors in Kos's favor. Nonetheless, because there is room for differing views as to the weight to which the document is entitled, and because some of the underlying facts are disputed, 19 we decline to hold that the record evidence compels weighing these factors in Kos's favor as a matter of law. On the other hand, it would be clear error to weigh either factor against Kos on the present record. 5. Defendant's Intent in Adopting the Mark 92 [E]vidence of intentional, willful and admitted adoption of a mark closely similar to the existing mark[] weighs strongly in favor of finding [a] likelihood of confusion. Checkpoint, 269 F.3d at 286 (quotation omitted). This inquiry extends beyond asking whether a defendant purposely chose its mark to promot[e] confusion and appropriat[e] the prior user's good will. Fisons, 30 F.3d at 479 (quotation omitted). The adequacy and care with which a defendant investigates and evaluates its proposed mark, and its knowledge of similar marks or allegations of potential confusion, are highly relevant. See, e.g., id. at 480 (directing district court to consider defendant's trademark search and investigation of similar marks to determine if it was careless in its evaluation of the likelihood of confusion); Lapp, 721 F.2d at 463 (relying on district court's finding that while defendant may have acted innocently, [it] was careless in not conducting a thorough name search for American uses of the name); Morgenstern, 253 F.2d at 394 (citing finding that defendant trod a very narrow course when it adopted the name Mictine with full knowledge of the prior use of the name Micturin by the plaintiff). A defendant that persisted in its plan to adopt a mark after being warned of too close resemblance between its proposed mark and plaintiff's mark is not blameless[]. Telechron, Inc. v. Telicon Corp., 198 F.2d 903, 908 (3d Cir.1952). 93 The district court did not analyze this factor on the record or make relevant factual findings. Kos argues that Andrx's intent to trade on Kos's goodwill may be inferred from Andrx's insistence on using this particular made-up (and meaningless) mark despite being warned of the likelihood of confusion before beginning to sell Altocor. Andrx responds that its allegedly infringing mark was specifically considered by the USPTO, the FDA and a district court and found not to be confusingly similar. Appellees' Br. at 24. 94 As stated previously, Andrx is not entitled to rely on the PTO or FDA actions to justify its own. See supra pp. 713-14. Andrx's attempt to justify its conduct by reference to the district court decision is puzzling; that decision was obviously not issued when Andrx adopted the ALTOCOR mark. Andrx chose to use this mark with clear notice of Kos's objections and its successful prior use of the ADVICOR mark for similar goods. There was, in the words of Judge Learned Hand, no reason whatever why [defendant] should have selected [an arbitrary, made-up trade-name] which bore so much resemblance to the plaintiff's. See Lambert Pharmacal Co. v. Bolton Chem. Corp., 219 F. 325, 326 (S.D.N.Y.1915). Andrx's use of ALTOCOR for its anticholesterol drug was at least reckless, at worst a deliberate appropriation of the goodwill Kos had generated for its anticholesterol product, Advicor. 95 We therefore conclude that the district court clearly erred in failing to weigh this factor for Kos. 20 96 7. Whether Goods Are Marketed Through the Same Channels of Trade and Advertised in the Same Media 97 [T]he greater the similarity in advertising and marketing campaigns, the greater the likelihood of confusion. Checkpoint, 269 F.3d at 288-89 (quotation omitted). This is a fact intensive inquiry that requires a court to examine the media the parties use in marketing their products as well as the manner in which the parties use their sales forces to sell their products to consumers. Id. at 289. The district court did not address this factor directly, but implicitly found that it did not favor Kos. Nonetheless, the court's statement, when analyzing the eighth Lapp factor, that both parties'sales representatives visit physicians with drug samples and related information is relevant here, and supports weighing this factor in Kos's favor. JA at 10. 98 Andrx concedes that the goods are marketed through the same channels, but argues that confusion is not likely since the channels of trade and marketing efforts are directed to a very educated and highly sophisticated group. Appellees' Br. at 30. Andrx also claims that this factor favors it because the products are not in direct competition since each should be prescribed under somewhat different circumstances. Id. 99 The problem with Andrx's approach is that neither customer sophistication nor the relationship between the goods is relevant to determining whether the goods are marketed through the same channels and advertised through the same media. Lapp, 721 F.2d at 463. There are other Lapp factors that take those issues into account. [W]e [do] not discount the strength of plaintiff's case in one area because of weakness in another; we weigh[ ] each factor separately. Fisons, 30 F.3d at 476 (holding district court erred in fail[ing] to count the similarities in channels of trade and target audience for plaintiff due to district court's view that other Lapp factors weighed against plaintiff). 100 We find that the district court clearly erred in failing to recognize that this factor favors Kos. It does. 101 8. Extent to Which Targets of the Parties' Sales Efforts Are the Same 102 The record supports the district court's finding that this factor supports Kos because the `parties target their sales efforts to the same consumers,' namely, physicians and pharmacists. JA at 10 (quoting Checkpoint, 269 F.3d at 289). Andrx again argues that any potential confusion is obviate [d] because the target audience is a highly educated and sophisticated group. Appellees' Br. at 30. The district court properly rejected this argument, recognizing that it impermissibly conflated different Lapp factors. Cf. Fisons, 30 F.3d at 476. 9. Relationship of the Goods 103 The closer the relationship between the products, ... the greater the likelihood of confusion. Lapp, 721 F.2d at 462. The question is how similar, or closely related, the products are. Fisons, 30 F.3d at 481 (describing cases where the relationship of the products was close enough to lead to the likelihood of confusion and the goods were similar enough that a consumer could assume they were offered by the same source). This factor focuses on the nature of the products themselves, asking whether it would be reasonable for consumers to associate them or see them as related. We have recognized that the near-identity of the products or their similarity of function are key to assessing whether consumers may see them as related. A & H, 237 F.3d at 215. 104 The district court did not analyze this factor. It did, however, make potentially relevant findings about similarities and differences in the usage and composition of the drugs. JA at 6 (While both drugs are used to treat elevated cholesterol levels, their chemical compositions differ in such a way that there are different active ingredients, dosages, and side effects.). Andrx maintains that doctors will necessarily distinguish the two products in their minds because they will need to decide which to prescribe since Advicor, but not Altocor, contains niacin. Appellees' Br. at 30-31. Kos argues that the differences in active ingredients, which make the drugs appropriate for treatment of different types of patients with the same ailment[,] ... do not negate a likelihood of confusion. Appellant's Br. at 25-26. 105 Goods need not be identical for this factor to support finding a likelihood of confusion. See, e.g., A & H, 237 F.3d at 224 (affirming holding that product similarity factor favored [plaintiff] where products were only somewhat interchangeable due to slightly different functions). The question is not whether it is possible to distinguish between the products but whether, and to what extent, the products seem related, whether because of [their] near-identity, ... or similarity of function, or other factors. Id. at 215; see also Fisons, 30 F.3d at 481 (equating factor with Sixth Circuit test for Relatedness of the Goods). Courts may consider here whether buyers and users of each parties' goods are likely to encounter the goods of the other, creating an assumption of common source[,] affiliation or sponsorship. Checkpoint, 269 F.3d at 286. 106 Advicor and Altocor are both prescription drugs used to improve cholesterol levels. The products are of the same type and serve the same function in slightly different (but overlapping) ways that may be appropriate for slightly different (but overlapping) sets of patients. That doctors will need to decide which drug to prescribe does not mean they won't see the drugs as related or otherwise associate them. Indeed, it could be argued that the opposite is true, that is, that they will associate the products because they must consider both to decide which to prescribe. See, e.g., Syntex Labs., Inc. v. Norwich Pharmacal Co., 437 F.2d 566, 568-69 & n. 1 (2d Cir.1971) (affirming finding that drugs for treatment of closely parallel and medically related conditions — which had different compositions such that each was contraindicated for some patients who could take the other drug — are likely to be closely associated in the minds of those who prescribe and dispense them); Sterling Drug Inc. v. Lincoln Labs., Inc., 322 F.2d 968, 971 (7th Cir.1963) (confusion likely as to medicines designed to remedy the same condition in [and] purchased and used by the same class of persons, even though products had different active ingredients, and were used and sold in different ways) (reversing and directing entry of permanent injunction); Ortho Pharm. Corp. v. American Cyanamid Co., 361 F.Supp. 1032, 1040 (D.N.J.1973) (medical personnel likely to mentally ... associate products even though unlikely to dispense one thinking it is the other). 107 Accordingly, we hold that the district court clearly erred in holding that this factor does not weigh in Kos's favor. It does. 108 10. Other Facts Suggesting the Public Might Expect the Prior Owner To Manufacture Both Products 109 In assessing this factor, courts may look at the nature of the products or the relevant market, the practices of other companies in the relevant fields, or any other circumstances that bear on whether consumers might reasonably expect both products to have the same source. This issue is highly context-dependent. See, e.g., Checkpoint, 269 F.3d at 291 (affirming finding that consumers were unlikely to expect plaintiff to have the expertise to enter defendant's field due to highly specialized and technical nature of defendant's products); Fisons, 30 F.3d at 480 (evidence that products are closely related and are used together and that other companies market both products supports finding that public might expect senior user to offer products of junior user); Lapp, 721 F.2d at 464 (close relationship between products that may be used together supports finding that even sophisticated customers ... would find it natural or likely that plaintiff might offer product similar to defendant's); McNeil Labs., Inc. v. American Home Prods. Corp., 416 F.Supp. 804, 806-07 (D.N.J.1976) (consumer might reasonably think TYLENOL manufacturer used EXTRANOL mark for extra-strength version of its drug); Ortho Pharm., 361 F.Supp. at 1040 (while purchasing agents are likely to know that [drugs] are the products of two separate companies since they typically order face-to-face with a sales representative, medical professionals will likely associate with [defendant] the goodwill and the high reputation which [plaintiff] has acquired). 110 The district court did not discuss this factor, but held that it did not favor Kos. 111 In light of the close relationship between the drugs, customers could easily expect the maker of one to make the other. Cf. Checkpoint, 269 F.3d at 290 (Evaluating this factor, courts look to evidence that ... the products at issue are so closely related that the consuming public might find it natural for one company to sell both.). In addition, Kos argues that medical professionals might expect it to make a drug akin to Altocor in light of how well such a drug would fit into Kos's product line. Kos sells two prescription drugs for the treatment of chronic ... cholesterol disorders — Niaspan, which contains only niacin, and Advicor, which contains both lovastatin and niacin. JA at 69. A lovastatin-only anticholesterol drug could easily be a seen as a natural brand extension. 112 Andrx responds that doctors choose which drug to prescribe based upon a patient's particular needs, not based upon who manufactures the drug. Appellees' Br. at 31. This response is wholly irrelevant to the question whether customers might expect Kos to offer a product like Altocor. Andrx's argument seems premised on the idea that goodwill is virtually irrelevant for prescription drugs. Andrx does not point to any evidence in support of such a novel position, which is counter to the purposes and assumptions of the Lanham Act. 113 Because Andrx has done nothing to rebut Kos's showing that customers could easily and naturally assume that Kos manufactures both products, we find that this factor favors Kos as a matter of law on the present record. The district court clearly erred in not weighing this factor for Kos.