A&H Sportswear, Inc. v. Victoria's Secret Stores, Inc

237 F.3d 198 (3rd Cir. 2000)

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Nature of the Case

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Facts

P manufactures ten percent of all swimwear in the United States. The Miraclesuit is advertised as having a slimming effect on the wearer without using uncomfortable girdle-like binds. P received a trademark registration for the mark Miraclesuit in the fall of 1992. P has spent over $1.2 million to advertise the Miraclesuit in magazines and trade papers and has received the equivalent of $1.5 million of advertising in 'free publicity,' i.e., publicity in trade magazines, consumer columns, and the general press. In 1993, D released The Miracle Bra, a padded push-up bra. It registered The Miracle Bra trademark. D spent over $13 million on The Miracle Bra products. D moved The Miracle Bra mark into swimwear, and The Miracle Bra swimsuit and The Miracle Bra bikini started appearing in Victoria's Secret catalogs. D has committed itself to using the following disclaimer with all promotion, advertising, and sales of The Miracle Bra: 'The Miracle Bra Swimwear Collection is exclusive to Victoria's Secret and is not associated with Miraclesuit by Swimshaper.' The PTO examining attorney denied D's application for marks for its swimwear due to its similarity to Miraclesuit because he determined that: (1) 'Miracle' was the dominant feature of each mark; and (2) the product lines overlap. The denial was not appealed. P filed a complaint against D alleging direct and reverse trademark infringement, unfair competition, dilution, and unjust enrichment. The court found that D's use of The Miracle Bra on its lingerie created no likelihood of confusion. If found a 'possibility of confusion' with D and P's Miraclesuit swimwear. It ordered D not to use The Miracle Bra tag with swimwear unless it was accompanied by the disclaimer: 'The Miracle Bra (TM) swimwear collection is exclusive to Victoria's Secret and not associated with Miraclesuit (R) by Swim Shaper (R).' It ordered that royalties on past and future sales of The Miracle Bra swimsuits be paid to P. Both parties appealed. The court rejected the possibility of confusion and adopted the likelihood of confusion standard. On remand the District Court applied the 'likelihood of confusion' test and found that there was no likelihood of direct confusion and no grounds for consideration of reverse confusion. P appealed.