Case: 12-1346

12-1346-cv
United States Court of Appeals
for the

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Second Circuit
UNITED STATES POLO ASSOCIATION, INC., USPA PROPERTIES, INC., Plaintiffs-Counter-Defendants-Appellants, against PRL USA HOLDINGS, INC., Defendant-Counter-Claimant-Appellee, LOREAL USA, INC., Intervenor-Defendant-Counter-Claimant-Appellee.
_______________________________ ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

BRIEF FOR INTERVENOR-DEFENDANT-COUNTERCLAIMANT-APPELLEE

ROBERT L. SHERMAN, ESQ. PAUL HASTINGS LLP Attorneys for Intervenor-DefendantCounter-Claimant-Appellee 75 East 55th Street New York, New York 10022 (212) 318-6000

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CORPORATE DISCLOSURE STATEMENT Counsel for Intervenor-Defendant-Counter-Claimant-Appellee LOreal USA, Inc. hereby certifies (1) that LOreal is the ultimate corporate parent of LOreal USA, Inc.; and (2) that LOreal is a publicly held company traded on the Paris Stock Exchange that owns 10% or more of LOreal USA, Inc.s stock. Dated: New York, New York October 16, 2012 PAUL HASTINGS LLP

By: /s/ Robert L. Sherman Robert L. Sherman (RS 5520) 75 East 55th Street New York, NY 10022 Telephone: (212) 318-6000 Facsimile: (212) 318-6847 robertsherman@paulhastings.com Attorney for LOreal USA, Inc.

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TABLE OF CONTENTS Page INTRODUCTION ....................................................................................................1 STATEMENT OF THE CASE .................................................................................8 STATEMENT OF FACTS .....................................................................................11 A. B. USPAs Foray Into Fragrances ................................................11 The Prior Disputes ...................................................................12 1. 2. 3. The 1984 Opinion and Order .........................................12 The 2006 Apparel Litigation and Settlement Agreement......................................................................16 The Trademark Trial and Appeal Board Order .............18

SUMMARY OF ARGUMENT ..............................................................................19 ARGUMENT ..........................................................................................................24 I. THE DISTRICT COURTS POLAROID ANALYSIS AND FINDING OF INFRINGEMENT WERE NOT CLEARLY ERRONEOUS ..............................................................................................24 A. The District Court Properly Rejected USPAs Argument That The Parties Prior History Gives USPA Affirmative Rights to Use An Infringing Mark In Connection With Fragrances .................26 The District Court Properly Rejected USPAs Argument That Its Purported Rights To And Prior Use of Other Marks In Connection With Other Goods Should Affect Or Excuse The Determination of Infringement...........................................................31 The District Courts Conclusion That USPA Adopted The USPA Mark In Bad Faith Was Amply Supported By The Evidence of Record ............................................................................35 The District Courts Analysis of the Polaroid Factor Regarding Similarity of the Marks Was Properly Conducted .............................39 The District Court Properly Concluded That Apparel and Fragrances Constitute Separate Markets and That The Purported Relatedness Between Them Was Irrelevant ..................43

B.

C.

D. E.

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TABLE OF CONTENTS (continued) Page F. The District Court Properly Assessed and Evaluated The Evidence Regarding Confusion And The Weight To Be Given Each Partys Survey ...........................................................................47 The District Court Properly Weighed the Polaroid Factors to Find Infringement But, In All Events, There Is No Balancing of the Factors That Would Have Led To A Different Result .................53

G.

II.

THE DISTRICT COURT PROPERLY GRANTED INJUNCTIVE RELIEF BASED ON TESTIMONY THAT USPAS USE OF ITS INFRINGING MARK WOULD CAUSE PRL IRREPARABLE HARM ..........................................................................................................54 THE DISTRICT COURT PROPERLY EXERCISED ITS DISCRETION IN FASHIONING AN INJUNCTION TAILORED TO ADDRESS THE THREATENED HARM POSED BY A REPEAT INFRINGER .................................................................................60

III.

CONCLUSION .......................................................................................................62

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TABLE OF AUTHORITIES Page(s) CASES eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) .....................................................................................passim Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. V. Steinway & Sons, 523 F.2d 1331 (2d Cir. 1975).......................................................................................... 40 International Star Class Yacht Racing Assn v. Tommy Hilfiger U.S.A. Inc., 94 Civ. 2663 (RPP), 1995 WL 241875 (S.D.N.Y. Apr. 26, 1995), affd in part, vacated in part, and remanded, 80 F.3d 749 (2d Cir. 1996) ........................ 32 Jaguar Cars Ltd. v. Skandrani, 771 F. Supp. 1178 (S.D. Fla. 1991) ............................................................................... 44 Louis Vuitton Malletier v. Burlington Coat Factory Warehouse, 426 F.3d 532 (2d Cir. 2005) ..................................................................................... 40, 41 Paco Sport, Ltd. v. Paco Rabanne Perfumes, 234 F.3d 1262 (2d Cir. 2000).......................................................................................... 41 Patsys Brand Inc. v. I.O.B. Realty, Inc., 317 F.3d 209 (2d Cir. 2003) ............................................................................................ 60 Peoples United Bank v. PeoplesBank, 401 F. Appx 607 (2d Cir. 2010).................................................................................... 25 Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d 492 (2d Cir. 1961), cert. denied, 368 U.S. 820 (1961) ...................passim PRL Holdings, Inc. v. United States Polo Assn, Inc., 520 F.3d ................................................................................................................................ 61 PRL USA Holdings, Inc. v. U.S. Polo Assn, Inc., No. 99 CV 10199(GBD), 2006 WL 1881744 (S.D.N.Y. July 7, 2006), affd, PRL USA Holdings, Inc. v. U.S. Polo Assn, Inc., 520 F.3d 109 (2d Cir. 2008) .............................................................................................................. 4

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Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010) ...........................................................................22, 55 Scarves By Vera, Inc. v. Todo Imports Ltd., 544 F.2d 1167 (2d Cir. 1976).......................................................................................... 44 The All England Lawn Tennis Club (Wimbledon) Ltd. v. Creations Aromatiques, Inc., 220 U.S.P.Q. 1069 (T.T.A.B. 1983)................................................................ 26, 33, 34 Times Mirror Magazine, Inc. v. Field & Stream Licenses Co., 294 F.3d 383 (2d Cir. 2002) ............................................................................................ 45 U.S. Polo Assn, Inc. v. Polo Fashion, Inc., No. 84-civ-1142(LBS), 1984 WL 1309 (S.D.N.Y. Dec. 6, 1984) (the 1984 Order) .............................................................................................................passim U.S. Polo Assn, Inc. v. PRL USA Holdings, Inc., 800 F. Supp. 2d 515 (S.D.N.Y. 2011)........................................................................... 10 U.S. Polo Assn, Inc. v. PRL USA Holdings, Inc., No. 09 Civ. 9476, 2012 WL 697137 (S.D.N.Y. Mar. 5, 2012) ................................ 4 Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366 (7th Cir. 1976), cert. denied, 429 U.S. 830 (1976) .......................... 49 OTHER AUTHORITIES Rule 36(b), Fed. R. Civ. P. ....................................................................................... 29 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition 24:1, at 24-7-8 (4th ed. 2012) ......................................................................................... 44 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition 30:4, at 30-16-30-18 (4th ed. 2012)................................................................................60

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INTRODUCTION The United States Polo Association, Inc. (USPA) and USPA Properties, Inc. (collectively, the USPA Parties) are repeat willful infringers of the famous Polo Player Logo and POLO word mark owned by PRL USA Holdings, Inc. (PRL). They commenced a declaratory judgment action against PRL, seeking a determination that their intended use of the Double Horseman logo in combination with the wording U.S. POLO ASSN. on certain blue packaging for mens fragrances would not infringe PRLs trademark rights. LOral USA, Inc. (LOral and, together with PRL, the PRL Parties), PRLs exclusive licensee for fragrances, intervened and with PRL counterclaimed for infringement. At trial, the PRL Parties demonstrated that USPA had adopted the Double Horseman logo in combination with U.S. POLO ASSN. (the USPA Mark) in bad faith and that use of that mark on fragrances would create a likelihood of confusion with PRLs famous Polo Player Logo and POLO word mark (the PRL Marks). The PRL Parties further demonstrated that they would suffer irreparable harm if USPA were permitted to make use of its infringing mark in connection with fragrances. In light of the USPA Parties prior infringement of the same PRL Marks, their violation of a prior injunction with respect to those same marks and their intractable insistence that they occupy a unique position that excuses or negates their repeated infringement of the PRL Marks, the PRL Parties sought an

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injunction that would set clear limits on the parties respective rights and finally clarify and reaffirm the prohibitions contained in the injunction that had been in force against USPA for more than 25 years. The PRL Parties also sought an award of attorneys fees based on the district courts finding of bad faith infringement and on the USPA Parties bad faith litigation tactics. The district court acknowledged that attorneys fees properly could be granted under the facts of this case but, exercising its discretion, declined to award such fees and instead issued an injunction appropriate in scope for a repeat willful infringer. USPA appeals from the finding of infringement and the issuance and scope of the injunction based on arguments that, if accepted, would excuse USPAs deliberate copying and infringement of the PRL Marks for all goods merely because USPA is the self-described governing body of the sport of polo. Throughout the proceedings, the USPA Parties consistently mischaracterized the issues -- including the very marks in dispute and the prior history between PRL and USPA -- and persisted in asserting the misguided argument that USPA has, through prior infringing uses, somehow acquired special additional rights that allow it now to infringe the PRL Marks in connection with fragrances, a product category in which the PRL Marks have achieved enormous strength and with which the USPA Mark heretofore was never used. Among the USPA Parties

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many intentional, blatant and deceptive mischaracterizations trumpeted throughout the trial and now in this appeal are: The astonishing assertion that the order in U.S. Polo Assn, Inc. v. Polo Fashion, Inc., No. 84-civ-1142(LBS), 1984 WL 1309 (S.D.N.Y. Dec. 6, 1984) (the 1984 Order)1 ratified and affirmed USPAs right to conduct a licensing program and conferred on USPA greater rights to use a mark confusingly similar to the PRL Marks despite the fact that the 1984 decision found the USPAs mounted polo player logo there at issue to infringe PRLs Polo Player Logo, prohibited USPA from using POLO as a trademark, prohibited USPA from using a mounted polo player logo unless distinctive from PRLs Polo Player Logo in content and perspective and prohibited USPA from using the name United States Polo Association, or any other name which emphasizes the word POLO (or the words U.S. POLO) separate, apart and distinct from such name in a manner that is likely to cause confusion with [PRL]. Nonetheless, USPAs appeal brief continues to refer to its Court-Approved Retail Licensing Program and to suggest that it has special rights by virtue of the 1984 Order that enjoined its use of the marks there at issue, despite

A-1588-93.

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the district courts clarification in this case (in its opinion addressing attorneys fees) that: the 1984 Order did not, as the USPA Parties contend, grant [USPA] any right whatsoever to conduct a licensing program, nor did this Court in the May 2011 opinion. Instead, both courts recognized the fact that the USPA Parties may, having no judicially granted right to do so, enter the marketplace just as any other may so long as they do not infringe the PRL Parties marks or otherwise violate the terms of injunctions. Thus, to the contrary, both opinions found that while the USPA Parties may enter the market as any other, their legal ability to do so with respect to their marks will be necessarily more limited than others who have not previously been found to infringe. U.S. Polo Assn, Inc. v. PRL USA Holdings, Inc., No. 09 Civ. 9476, 2012 WL 697137 (S.D.N.Y. Mar. 5, 2012). Attempting to position the dispute regarding fragrances as already having been adjudicated in the litigation concerning apparel 2 (the Apparel Litigation), despite the fact that the Apparel Litigation involved different marks, different goods and different facts. Referring to the marks at issue in this appeal as the very same trademarks and the identical trademarks as those involved in the

PRL USA Holdings, Inc. v. U.S. Polo Assn, Inc., No. 99 CV 10199(GBD), 2006 WL 1881744 (S.D.N.Y. July 7, 2006), affd, PRL USA Holdings, Inc. v. U.S. Polo Assn, Inc., 520 F.3d 109 (2d Cir. 2008).

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Apparel Litigation, when that case did not address the use of U.S. POLO ASSN. or any use of the word POLO in combination with the Double Horseman logo. Describing this Court as having affirmed a finding of non-infringement in the Apparel Litigation, when this Court determined only that the district court had not committed reversible error with respect to two specific evidentiary rulings and a jury instruction, as a result of which the jury verdict was allowed to stand. Misrepresenting a purported settled right to use its name, when the settlement agreement regarding the use of UNITED STATES POLO ASSOCIATION, U.S. POLO ASSN. and other variations did not allow for use of such wording with mounted polo players and expressly applied only to goods classified in International Class 25 (apparel) and select goods in other classes, none of which included fragrances or any other International Class 3 goods, and cannot be relied on as the basis for a right to make trademark use of POLO, alone or in combination with other words, in connection with fragrances. Arguing that adoption of the Double Horseman logo in combination with U.S. POLO ASSN. on blue packaging for fragrances was reasonable in light of the Apparel Litigation due to the purported relatedness of the

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apparel and fragrance markets, despite USPAs awareness of the Trademark Trial and Appeal Boards (TTAB) order expressly finding that [i]nsofar as the district court order [in the Apparel Litigation] is silent as to products falling under International Class 3, the likelihood of confusion claim before us involves different transactional facts material to the claim and that the Apparel Litigation does not have preclusive effect with respect to use of the mark in connection with goods in Class 3. Confusing its rights, which are no greater than those of any other, to make descriptive, non-trademark use of the word polo and to use noninfringing marks that relate to or depict the sport of polo, with a supposed right to make trademark use of the word POLO (alone or in combination) and of a specific depiction of the sport. Pressing the unsubstantiated and novel position that, as a sporting association, USPA has a special sort of trademark right in gross to use its name and Double Horseman logo in connection with any goods regardless of the likelihood of confusion with the marks of a senior user in a specific product category, subject to a unique infringement analysis that, apparently, applies to USPA alone.

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Remarkably, USPA argued before the district court and now argues on appeal that its infringement of the PRL Marks in connection with fragrances should be judged more leniently than that of a first-time offender because of the prior history between the parties -- a history, it bears repeating, in which USPA has been found to infringe the PRL Marks it again has been found to infringe here. USPA also argues that its infringement should not be enjoined, despite trial testimony regarding the loss of control and significant damage to PRLs reputation and brand image that would ensue from confusion in the fragrance marketplace. Under USPAs reasoning, a declaratory judgment defendant never would have any recourse or remedy. Instead, it would be in the untenable position of having to allow the adjudged infringer to make widespread use of its mark and cause actual damage to the senior users reputation, brand value and goodwill, no matter how devastating, eligible to seek relief only after the harm, which by definition is irreparable, already had occurred (but before such time had passed as to allow a defense of acquiescence or laches). USPAs theory cannot be the law. In addition, despite claiming to rely on the 1984 Order as a road map that sets the boundaries for its retail licensing program, USPA objects that the injunction here entered by the district court is impermissibly broad, notwithstanding that the language objected to merely repeats and incorporates the very same restrictions contained in the 1984 Order on which the USPA Parties so heavily rely.

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The district court carefully considered and properly rejected USPAs arguments, which include those presented here on appeal, correctly applied a traditional Polaroid analysis and issued a comprehensive but appropriate injunction. In doing so, it committed no clear error and no abuse of discretion. STATEMENT OF THE CASE The USPA Parties have attempted at every turn to cast this case as already having been determined by (1) the 1984 litigation, which they inexplicably interpret as having ratified the [USPAs] right to maintain a licensing program using its name and a mounted polo player symbol that is distinctive from PRLs, and (2) the Apparel Litigation, going so far as to file the action below as a related case despite the fact that there was no other action pending a request that Judge Daniels rejected out of hand. The marks, goods and marketplace factors involved in this appeal differ from those previously litigated. The only relevance of the prior cases is the fact that, in both, USPA was found to have adopted a mounted polo player mark that infringed PRLs Polo Player Logo and, in the 1984 case, an injunction issued prohibiting USPA from adopting marks that are confusingly similar to the PRL Polo Player Logo or POLO word mark in connection with any goods or services. As a prior infringer, USPA had and continues to have an obligation to exercise greater caution against adopting yet another infringing mark,

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not, as it argues, a right to have its infringement excused based on the parties prior history. Nonetheless, despite its status as a prior infringer, despite the long-standing injunction against the adoption and use of a mounted polo player logo, the word POLO and trade dress that is confusingly similar to the marks and trade dress used by PRL, and despite the TTABs rejection of USPAs argument that apparel and fragrances are sufficiently related that the resolution of the Apparel Litigation also resolves USPAs rights in the USPA Mark for goods in Class 3, the USPA Parties authorized their licensee to create packaging for a mens fragrance using the Double Horseman logo in combination with U.S. POLO ASSN. on navy blue background with pale metallic lettering that unmistakably mimicked the trade dress of PRLs best-selling mens fragrance, POLO BLUE. LOral, not a named defendant in the USPA Parties declaratory judgment action, moved to intervene and engaged an expert to conduct a consumer survey regarding the likelihood of confusion between the parties marks. That survey was conducted in January 2010, immediately following the holiday shopping season. The order granting LOrals motion to intervene was entered on February 11, 2010. A-176-78. The survey and report were finalized and signed on February 25, 2010. On March 2, 2010, LOral filed its answer, counterclaims and motion for

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a preliminary injunction. That motion was consolidated with the trial on the merits, which was heard in September 2010 by agreement of the parties.3 On May 13, 2011, the Honorable Robert W. Sweet, United States District Judge for the Southern District of New York, issued an opinion in which he held that the USPA Parties had adopted the USPA Mark for fragrances in bad faith, that the USPA Mark used in connection with fragrances infringed the PRL Marks and that the USPA Parties had violated the 1984 Order. He then granted the PRL Parties request for a permanent injunction. U.S. Polo Assn, Inc. v. PRL USA Holdings, Inc., 800 F. Supp. 2d 515 (S.D.N.Y. 2011); A-2269-329. On November 14, 2011, the PRL Parties moved for attorneys fees. On March 5, 2012, the district court issued an order acknowledging USPAs bad faith and repeat infringement but, in the exercise of the courts discretion, denying the request for attorneys fees, and a separate order entering a permanent injunction that prohibits the USPA Parties from using the Double Horseman logo or the word POLO alone or in combination with other words in connection with fragrances, and incorporating other prohibitions contained in the injunction that has been in force against USPA since 1984.

The USPA Parties agreed in a letter to the court that was so ordered not to use the offending mark and trade dress unless and until a decision by the district court would permit them to do so. A-7-8, D.E. 24.

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USPA filed this appeal, challenging the district courts finding of infringement, entry of an injunction and the scope of that injunction. STATEMENT OF FACTS4 A. USPAs Foray Into Fragrances In 2008, USPA discussed with JRA Trademark Company Ltd. (JRA), its master licensee in the United States, expanding into the fragrance market.5 By fall of 2009, JRA designed packaging for use on a mens fragrance that featured the Double Horseman logo that was being used by USPA on apparel, but this time in combination with the wording U.S. POLO ASSN., on blue background with a thin line creating a border around the perimeter of the front panel all appearing in light gold.6

For a summary of the facts concerning the evolution and acknowledged fame of PRLs Polo Player Logo, shown immediately below, the Court is respectfully referred to the district courts opinion at A-2273-75; A-2290-91.

5 6

A-992:24-A-993:8. A-37; A-994:22-24.

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On November 13, 2009, the USPA Parties filed a declaratory judgment action against only PRL seeking a determination that USPAs use of the Double Horseman logo and U.S. POLO ASSN word mark in connection with fragrances does not infringe PRLs rights.7 A fair reading of the complaint makes it clear that, at that time, the USPA Parties had not yet launched their fragrance product.8 The USPA Parties were about to go to market despite having no business plan, budget, advertising or experience in the product category. A-2315. Because USPA persists in presenting a tortured interpretation of its litigation history with PRL, in an attempt to enlarge its trademark rights and excuse its infringement, it is necessary to provide the factual background of those previous disputes. B. The Prior Disputes 1. The 1984 Opinion and Order In 1984, USPA and its licensees commenced an action against PRLs predecessor (also referred to herein as PRL) for a declaratory judgment that various articles of merchandise bearing a mounted polo player symbol did not infringe PRLs Polo Player Logo. PRL counterclaimed for trademark infringement. The matter came before Judge Sand, who found that USPA and its

7 8

A-18-138. A-28, 36; A-30, 44, 47; A-31, 51; A-32, 55.

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licensees infringed PRLs Polo Player Logo, POLO and POLO BY RALPH LAUREN trademarks and trade dress, and engaged in unfair competition.9 The 1984 Order enjoined USPA and its licensees from infringing the Polo Player Logo and the word POLO, but clarified that USPA was not enjoined generally from engaging in a licensing program using non-infringing trademarks.10 Throughout this case, USPA inexplicably has relied on the 1984 Order as having granted USPA affirmative and judicially-recognized rights to conduct a retail licensing program using its name and a mounted polo player logo. In its appeal brief, USPA repeatedly makes such claims, e.g., the 1984 Order, which affirmed [USPAs] right to use its name and a distinctive mounted polo player symbol in connection with a retail licensing program,11 [i]n recognizing [USPAs] right to conduct a retail licensing program using marks related to the sport of polo, the 1984 Order acknowledged the rights of a sporting association to use marks related to its sport,12 and the 1984 Order held that [USPA] is entitled to use its name in a manner that does not confusingly emphasize the word Polo or

U.S. Polo Assn v. Polo Fashions, Inc., No. 84 civ. 1142 (LBS), 1984 WL 1309 (S.D.N.Y. Dec. 6, 1984). A-1588-93, 8, 9. Appellants Br. 25. Id., 26.

10 11 12

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U.S. Polo.13 There is no fair reading of Judge Sands 1984 opinion and order that can in any way support USPAs characterization of the order as having granted, authorized or ratified any affirmative trademark rights in USPA. After finding USPA liable for infringing PRLs Polo Player Logo, Judge Sand entered an injunction that prohibited USPA from (a) using any of the Polo Marks or any name or mark or symbol which is confusingly similar thereto, in connection with the sale or offering for sale of any goods (d) using for any commercial purposes whatsoever, the name United States Polo Association, or any other name which emphasizes the word POLO or the words U.S. POLO separate, apart and distinct from such name in a manner that is likely to cause confusion with [PRL]; (e) infringing [PRLs] trademark, trade names or trade dress; (h) using any reproduction, counterfeit, copy or colorable imitation of the Polo Marks, including but not limited to POLO used as a trademark, in connection with the publicity, promotion, sale or advertising of goods sold by them including, without limitation, apparel, fashion accessories and any other items or any related service; and (i) affixing, applying, or using in connection with the sale of any goods, a false description or representation, including words or other symbols tending to falsely describe or represent such goods as originating with [PRL], and from offering such goods in commerce, including specifically, but not limited to, all uses of the singular or composite use of POLO and U.S. POLO in a manner which is likely to cause confusion with [PRL].14

13

Id., 27. A-1588-93, 8.

14

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The 1984 Order clarifies that [n]othing contained herein shall be construed to prohibit [USPA] from using the word polo, not as a trademark or indication of origin, but solely to describe or refer to the sport of polo or to prevent USPA from conducting a retail licensing program utilizing the USPA collective membership mark (Reg. No. 1,181,651), the USPA horsehead symbol (Reg. No. 1,304,236) or a mounted polo player or equestrian or equine symbol which is distinctive from the [PRL] polo player symbol in its content and perspective, provided that such symbol is used in conjunction with trade dress, i.e., labels, hangtags and packaging, which does not utilize white or silver lettering on a blue background or emphasize the word POLO by presenting it in a rectangle or between parallel lines or in lettering larger than that of associated words or letters used to identify USPA, and does not utilize any other trade dress which is likely to cause confusion with [PRL].15 Although the 1984 Order recognizes that USPA has the same rights as any other to make descriptive (i.e., non-trademark) use of the word polo and to conduct a retail licensing program using trademarks and trade dress that do not infringe PRLs trademarks or trade dress, it does not in any way expand USPAs rights or endorse its use of any particular mark.

15

Id., 9.

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2. The 2006 Apparel Litigation and Settlement Agreement In the Apparel Litigation, the jury considered four marks used in connection with apparel and certain other goods, none of which includes fragrances. The jury determined (a) that the solid double horseman alone infringed PRLs Polo Player Logo, but (b) that the solid double horseman logo with the letters USPA underneath, the outline double horseman alone (the mark now referred to as the Double Horseman logo), and the outline double horseman with the letters USPA underneath did not infringe PRLs Polo Player Logo in connection with the goods there at issue.16 Unlike a courts determination of infringement, the jurys verdict does not provide any information or insight regarding how the jurors analyzed each of the Polaroid factors, only that, on final balancing, certain marks were found not to infringe. It may be that the jury determined that the marks were extremely similar but that the similarity was outweighed by other Polaroid factors and/or excused by other facts there present. Regardless, despite USPAs repeated references in its brief to the jurys determination regarding the very same or identical marks, the jury in the Apparel Litigation never considered the Double Horseman logo in

16

A-2228-31.

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combination with U.S. POLO ASSN., or any mark that includes the term POLO. The final order and judgment entered by Judge Daniels in that case made it crystal clear that the jury verdict pertained only to the goods there at issue, namely, apparel, watches, leather goods and certain goods in Class 28 that relate solely to the sport of polo. Excluded from the Apparel Litigation by stipulation of the parties were fragrances, in Class 3.17 The Apparel Litigation, therefore, addressed different marks used on different goods, not the marks here at issue in connection with fragrances. Similarly, although USPA references its settled right to use its name and the parties agreement with respect to use of U.S. POLO ASSN., that agreement by its terms is limited to specified goods; it does not address USPAs right to use that mark in connection with fragrances and cannot now be relied on by USPA as a basis for asserting such rights. PRL appealed three specific issues from the Apparel Litigation -- two evidentiary rulings and the district courts refusal to give a jury instruction stating that, as a previous infringer, USPA must keep a safe distance from PRLs marks. This Court affirmed the district courts rulings, holding that an instruction that incorporated the safe distance rule might confuse a jury as to the proper standard for liability. That does not, however, equate to holding, as USPA here asserts, that

17

A-1096:9-A-1097:11; A-2228-31.

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USPA is different in any way from a traditional infringer that can be required to keep a safe distance from the PRL Marks. Nor does it equate to an affirmation or acknowledgment of USPAs right to use the Double Horseman logo on other goods. It certainly cannot be understood as a judicial affirmation of the right to use the USPA Mark at issue here, as that mark never was before the jury or this Court. 3. The Trademark Trial and Appeal Board Order In their declaratory judgment complaint, the USPA Parties alleged that following judgment in the Apparel Litigation, they requested that the USPTO end suspension of opposition proceedings involving U.S. POLO ASSN., 1890 and Double Horseman Trademark for cosmetics and fragrances.18 What actually happened was that USPA filed a motion for summary judgment seeking to dismiss the opposition with prejudice based on the decision in the Apparel Litigation. In November 2008, the TTAB denied USPAs motion for summary judgment and held that the Apparel Litigation involved different transactional facts, namely, that apparel was materially different from fragrances, such that the Apparel Litigation was not material to the opposition proceeding (TTAB Order).19 The TTAB also noted that the marks at issue in the Apparel Litigation differed from those in the opposition proceeding, as the Apparel Litigation did not address the combination

18 19

A-27, 34. A-2232-37; A-1097:25-1099:5.

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of the Double Horseman logo with the wording U.S. POLO ASSN.20 Utterly ignoring that holding, USPA continues to insist that the Apparel Litigation and the relatedness of apparel and fragrances essentially foreclose consideration of whether its adoption and use of the USPA Mark infringe the PRL Marks. SUMMARY OF ARGUMENT USPAs arguments regarding its right to enter the fragrance market reflect its fundamental and seemingly intractable misunderstanding of trademark law. Trademark rights do not exist in gross. USPA has no generalized affirmative rights to use its marks or marks related to the sport of polo where, as here, those marks used in connection with specific goods infringe the rights of a senior user. The concepts of natural expansion and related goods apply to extend the protection available to a senior user whose marks are infringed by use on related goods; those concepts have no application when the goods at issue are identical (here, fragrances versus fragrances) and may not be used by an infringer based on its use of a mark in connection with other goods. Those found liable for infringement in the past have an obligation to exercise greater care not to infringe the same partys marks in the future; ones status as a sporting organization, retail

20

A-2232-37.

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licensor, or even long-standing user of a mark in connection with other goods or services, does nothing to lessen that obligation. USPA knows that under a straightforward Polaroid analysis, there is no question that the USPA Mark infringes the PRL Marks. It therefore goes through contortions to avoid or constrain the application of the Polaroid factors, mischaracterizing facts and findings, and essentially arguing that this Court should create a special law of trademarks that applies only to USPA. Specifically, USPA argues that the district courts finding of likelihood of confusion, and in particular the finding of bad faith, cannot be supported by the record in light of the lack of actual customer confusion, the history of the marks coexistence, and the judicially recognized right of [USPA] to use their marks in the marketplace as well as a federal jurys earlier determination that the very mark that the court found had been adopted in bad faith did not cause a likelihood of confusion or infringe on PRLs marks.21 USPA further argues that the district court failed to consider the rights of [USPA] to use marks related to the sport of polo, the strength of [USPAs] marks and brand, the previous agreements and interactions between these parties, the marketplace coexistence between the parties products, the relationship between the fragrance and apparel markets, and

21

Appellants Br. 20.

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the evidence that consumers have not been confused by [USPAs] use of its marks.22 The PRL Parties respectfully point out USPAs artful wording and presentation of the issues and the need for this Court to treat with skepticism any suggestion by USPA that the parties history essentially disposes of the question of infringement. There has been no judicial recognition of USPAs right to use the mark at issue in this case, which is the only mark that matters, and no judicial consideration of USPAs right to use any mark in connection with fragrances. In fact, the only previous determination regarding USPAs right to use the USPA Mark at issue in this case was the TTAB Order, which rejected USPAs argument that the outcome of the Apparel Litigation gave it any rights to the USPA Mark in connection with fragrances. Despite USPAs reference to a federal jurys earlier determination regarding the very mark that the court found had been adopted in bad faith, the fact is that the federal jury did not consider the very mark that was before the district court. Even leaving aside the differences between the goods at issue in the Apparel Litigation and the current case, the federal jury never considered the Double Horseman logo in conjunction with U.S. POLO ASSN. or any use of the word POLO. The district court here explicitly stated that its finding

22

Id.

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of bad faith was based, in part, on USPAs initial adoption of the USPA Mark along with trade dress that mimicked PRLs trade dress for its best-selling POLO BLUE fragrance, which was not before the jury in the Apparel Litigation. The previous agreements between the parties expressly relate only to the goods identified therein and form no basis for USPA to assert trademark rights in any mark with respect to fragrances. USPAs arguments against the issuance of the injunction and against the scope of injunction also are without merit. Even after eBay23 and Salinger,24 trademark owners are not required to suffer actual harm before seeking injunctive relief. If that were the case, a declaratory judgment defendant never would have recourse against an infringer. The very nature of the irreparable harm attendant to marketplace confusion ensures that the harm often will be difficult to measure or prove. Although courts generally may no longer presume irreparable harm from a finding of infringement, injunctive relief remains appropriate and available when the factors that justified the old presumption pertain (namely, threat of loss of control, reputational harm, damage to brand image and diminution in brand value). That is not surprising. As Chief Justice Roberts stated in eBay, when determining whether an injunction should issue, a page of history is worth a volume of logic.

23 24

eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010).

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547 U.S. at 395. The PRL Parties witnesses testified regarding the irreparable harm they likely would suffer if USPA were permitted to use its infringing mark. It was well within the district courts proper exercise of discretion to credit that testimony and grant injunctive relief. Similarly, it was well within the proper exercise of discretion for the district court to issue an injunction that prohibits use of marks beyond the specific mark before it, and to reassert the prohibitions contained in a prior injunction that USPA violated. It is not clear what USPAs objection to those prohibitions can be, as it claims to have relied on the prior injunction as the road map for its brand development for the past 25 years. The district court considered USPAs arguments and properly rejected the notion that the parties history, USPAs position as a sporting association that conducts a retail licensing program, or the purported relatedness of fragrances and apparel should constrain the traditional Polaroid analysis or excuse USPAs infringement. The district court committed no error in its determinations regarding each Polaroid factor, including similarity of the marks, bad faith and actual confusion. Having found that each of the Polaroid factors either favors the PRL Parties or is neutral, any balancing of the factors would result in a finding of infringement. There is no basis on which the district courts determination of infringement can or should be reversed. In light of the finding of infringement, the testimony regarding irreparable harm and USPAs status as a repeat infringer, the

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district court had ample justification for granting a broad injunction. Neither the issuance of that injunction nor its scope reflects an abuse of discretion. ARGUMENT I. THE DISTRICT COURTS POLAROID ANALYSIS AND FINDING OF INFRINGEMENT WERE NOT CLEARLY ERRONEOUS For 50 years, the legal standard in this circuit for determining whether a party has engaged in trademark infringement has been application of the factors contained in Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d 492 (2d Cir. 1961), cert. denied, 368 U.S. 820 (1961). While paying lip service to the Polaroid factors, USPA advocates a novel, radical departure from that standard. USPA essentially asks this Court to accept that USPA -- alone among trademark owners - has acquired rights in gross to use certain marks and variations thereof, irrespective of the rights of a senior user with respect to specific goods and irrespective of the confusion that would ensue. USPA argues that the district court should have constrained its infringement analysis based on purported rights that USPA has in other marks used on other goods; should have interpreted a 25-yearold order that enjoined USPA from infringing the same PRL marks at issue here as instead permitting USPA to adopt and use marks likely to cause confusion; should have excused infringement in the fragrance market based on litigation outcomes and a settlement agreement that related expressly and exclusively to other goods;

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and should have ignored as reasonable USPAs manifest bad faith intent to copy and free ride on the PRL Marks and trade dress with respect to fragrances. Despite USPAs persistent efforts to position its declaratory judgment complaint, and this entire action, as a mere continuation of prior litigation between PRL and USPA, the law remains clear. No trademark rights exist in gross. A sporting association and/or a retail licensor has no greater right than any other to make use of its marks (or similar marks) in connection with a new category of goods, where use of those marks on such goods creates a likelihood of confusion with the mark of a senior user. The question of infringement must be analyzed as it relates to the marks at issue as used in connection with the goods at issue, not based on different marks used in connection with different products at a different time. The district court considered and correctly rejected USPAs arguments regarding the application of an alternative standard or approach, and properly analyzed the likelihood of confusion under the traditional Polaroid factors. USPA has a high bar to reach in asking this Court to reverse the district courts ultimate determination. This Court will set aside a district courts findings on each Polaroid factor only for clear error. The Court reviews the overall balancing or weighing of the factors de novo. Peoples United Bank v. PeoplesBank, 401 F. Appx 607, 608 (2d Cir. 2010) (In the context of a trademark infringement suit,

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we review the district courts findings on each of the Polaroid factors under a deferential standard and will set them aside only for clear error, and we review the overall balance of the Polaroid factors as a legal issue de novo). Here, the district court found that not one of the Polaroid factors favored USPA. Absent a finding that the district court committed clear error in its resolution of a factor that itself outweighs all of the other factors combined, there is no de novo balancing that could lead to a finding of non-infringement. A. The District Court Properly Rejected USPAs Argument That The Parties Prior History Gives USPA Affirmative Rights to Use An Infringing Mark In Connection With Fragrances USPA argues that the district court clearly erred in its Polaroid analysis by purportedly disregarding the market conditions in which the parties marks are used. Those market conditions, according to USPA, refer to claimed protectable rights in its own marks related to the sport of polo. The district court did not disregard USPAs arguments. It considered them and found them irrelevant, meritless or unavailing. That USPA does not like the outcome does not mean that the analysis was clearly erroneous. The specific market conditions that USPA claims should have formed the parameters within which the district court conducted its Polaroid analysis are summarized and addressed in turn:

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(1) USPA argues that the district courts conclusion that [USPA] had adopted its Double Horseman mark in bad faith had no basis in the record because a jury presented with the Double Horseman mark had already concluded that it did not infringe on PRLs mark, a decision that was affirmed by this Court. Appellants Br. 23-24. However, as USPA itself emphasizes elsewhere in its brief, here [t]he district courts conclusion was that the use of POLO in conjunction with the Double Horseman mark in the [fragrance] context [] infringes the PRL Parties substantive trademark rights. Id. at 53 (emphasis added by USPA). USPAs argument against the scope of the injunction explicitly relies on the fact that the district courts finding of likely confusion related to the use of the Double Horseman mark in combination with the word mark POLO. Id. at 54. The USPA Mark considered by the district court in this case never was before the jury in the Apparel Litigation. Far from disregarding the 2006 jury finding, Judge Sweet considered and addressed it directly. His opinion states: Nor are the PRL Parties claims foreclosed by a jurys finding in 2006 . Most saliently, the marks at issue here are employed in the context of fragrances, not apparel. This case involves the use of the Double Horseman mark with the word mark U.S. POLO ASSN. 1890, not alone or with USPA beneath. In contrast to the 2006 apparel case, the dominant term in the word portion of USPAs mark here and that which consumers are most likely to view as having trademark significance is POLO. A-2288.

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Judge Sweet also pointed out that the TTAB had noted the differences between the marks in the Apparel Litigation and the USPA Mark at issue with respect to fragrances, namely, that the latter includes the wording U.S. POLO ASSN. and that the import of the word POLO may differ in the context of different goods, i.e., that it may be more arbitrary with respect to fragrances than with respect to apparel. A-2289, n. 8, 9. The district court opinion makes clear that the determination of bad faith also considered USPAs adoption of the blue packaging presented in its declaratory judgment complaint, packaging that never was before the jury in the Apparel Litigation. A-2313. The jurys finding with respect to a different mark used on different goods in no way enlarges USPAs rights or constrains the analysis of whether the mark here at issue infringes the PRL Marks in connection with fragrances. (2) USPA nonetheless presses the point, and attempts to argue that the settlement agreement with PRL regarding the use of U.S. POLO ASSN. in connection with other goods confers a right on USPA to use that mark in connection with fragrances. Specifically, USPAs brief states that [t]he jury [in the Apparel Litigation] did not consider [USPAs] right to use its U.S. POLO ASSN. mark because that use was permitted by prior stipulation of the parties, and that PRL withdrew its legal challenge to the use of U.S. POLO ASSN. on apparel, leather goods, and watches and this Court affirmed the use of the Double

28

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Horseman mark on apparel, leather goods and watches.25 Appellants Br. 24 n2 and 25. Leaving aside the misleading statement that this Court affirmed the use of the Double Horseman mark, when this Court only considered and affirmed three specific rulings of the district court, there is no support whatsoever for the proposition that a settlement or adjudication with respect to one category of goods confers rights on a junior user with respect to any other category of goods. It is disingenuous for USPA to attempt to enlarge its rights based on a settlement agreement that, by its terms, was limited solely to the goods addressed therein, which did not include fragrances. In addition, as Judge Sweet noted, the 1984 Order that USPA also attempts to use as a basis for its preexisting rights anticipates reapplication of Polaroid because the analysis of which symbols are distinctive from PRLs Polo Player logo -- that is, not infringing -- and whether use of the United States Polo Association name or other name is used in a manner that is likely to cause confusion requires application of Polaroid. In finding a likelihood of confusion, the district court notes that the USPA parties have violated the 1984 Order insofar as it prohibited USPAs adoption of infringing marks. A-2287-88. Far from a settled right to use its name, the use of U.S. POLO ASSOCIATION,

25

The only evidence of that contention appears in response to a Request for Admission filed in the Apparel Litigation, which is expressly inadmissible in this action. See Rule 36(b), Fed. R. Civ. Pro. The PRL Parties hereby renew their objection, A-972:10-973:5; A-1692-93, and move to exclude such evidence.

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U.S. POLO ASSN. and other variations is not settled when USPA expands such use into markets where it is likely to cause confusion with the existing rights of a senior user. (3) USPA also makes vague allusions regarding its judicially recognized right to use marks as the governing body of the sport of polo and the protectable rights in its own marks related to the sport of polo, marks that have achieved recognition and secondary meaning among consumers through the [USPAs] extensive retail licensing program. Appellants Br. 24. The PRL Parties repeatedly have stated that they do not contest the USPA Parties right to use the word polo to describe or refer to the sport of polo, i.e., in a descriptive rather than trademark sense, or to conduct a product licensing program using marks that do not infringe PRLs trademark and trade dress. The claim that USPA has the right to use marks related to the sport of polo does not confer any affirmative right to use specific marks that infringe a senior users trademark rights in a specific product category. Just like any other, USPA has trademark rights only by virtue of using a particular mark in connection with specific goods or services. Its position as a sporting association or retail licensor does not change that fundamental fact of trademark law and does not give it the right to adopt infringing marks merely because they refer to or depict the sport of polo.

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The district court considered all of those arguments, presented by USPA in an effort to avoid a traditional Polaroid analysis, and found them unpersuasive. That determination was proper, reasonable, based on the record and consistent with long-standing trademark principles and precedent. B. The District Court Properly Rejected USPAs Argument That Its Purported Rights To And Prior Use of Other Marks In Connection With Other Goods Should Affect Or Excuse The Determination of Infringement In presenting arguments regarding USPAs rights to and prior use of the marks at issue, USPA again (1) inexplicably suggests that the mark at issue in this case is the same as the marks before the court in 1984 and 2006 and (2) mistakenly appears to believe that there exists a concept of trademark rights in gross, rather than rights appurtenant to particular goods. Those arguments have been addressed above. USPA refers to [t]he parties competing rights to use marks relating to the sport of polo. However, the parties have no such generalized rights. Neither party has a monopoly on or is precluded from using unspecified marks relating to the sport of polo. PRL never has attempted to prevent USPA from making use of marks, that relat[e] to the sport of polo but do not create a likelihood of confusion with the PRL Marks. The USPA Parties present a novel but bizarre argument, suggesting that sports associations with licensing programs deserve different -- and preferential -treatment under the trademark laws. The cases cited by USPA regarding sporting

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associations and their licensing programs are irrelevant and inapt. The PRL Parties do not dispute that sporting associations, may license their marks on a variety of goods, provided that those marks do not infringe the rights of a senior user. That the facts set forth in the cited cases indicate that the National Football League and the National Basketball Association license their trademarks for use on a variety of products is of no legal significance, and certainly does nothing to establish that USPAs role as a sporting association confers on it any special trademark rights. Appellants Br. 26-27. The only conceivable reason for USPAs reference to those cases is to distract from the admission made at trial, namely, that USPA Properties president is not aware of a single sporting association that has licensed its mark for use with fragrances and that there is no natural association whatsoever between the word or pictorial representation of polo and perfumery, other than the association created by the PRL Parties use of their iconic Polo Player Logo and POLO word marks. A-1038:3-A-1039:22. The cases cited by USPA do not support its position. Reliance on International Star Class Yacht Racing Assn v. Tommy Hilfiger U.S.A. Inc., 94 Civ. 2663 (RPP), 1995 WL 241875 (S.D.N.Y. Apr. 26, 1995), affd in part, vacated in part, and remanded, 80 F.3d 749 (2d Cir. 1996) is misplaced. There, the sports association was the senior user of the goods in issue and was alleging infringement. Here, the USPA Parties are the junior users engaging in

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infringement. The court there did not find an inherent right in an association to conduct a licensing program. The All England Lawn Tennis Club (Wimbledon) Ltd. v. Creations Aromatiques, Inc., 220 U.S.P.Q. 1069 (T.T.A.B. 1983) involves neither a sports association nor infringement. There, the applicant attempting to register WIMBLEDON as a trademark was refused registration for creating a conflict with the famous tennis event, represented by the opposer, a British corporation. Contrary to USPAs assertion, the 1984 Order created no special or affirmative rights and acknowledged only that USPA has the right, as does any other, to make descriptive, not trademark, use of the word polo, and to conduct a retail licensing program using non-infringing marks. Ironically, the source USPA relies on for its purported affirmative right to use its name is a provision of the 1984 Order that enjoins USPA from using for any commercial purposes whatsoever, the name United States Polo Association, or any other name which emphasizes the word POLO (or the words U.S. POLO) separate, apart and distinct from such name in a manner that is likely to cause confusion with defendants, Ralph Lauren or any entity affiliated with them. A-1588-93, 8. The source that USPA relies on for its purported acknowledged right to use marks relating to the sport of polo is a paragraph from the 1984 Order that merely clarifies that the injunction does not prohibit USPA from using the word polo, not as a

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trademark or indication of origin, but solely to describe or refer to the sport of polo and, possibly, a paragraph clarifying that the injunction does not prohibit USPA from conducting a retail licensing program using a mounted polo player that is distinctive from the Polo Player Logo and that is not used in conjunction with trade dress that emphasizes the word POLO and that does not use any other trade dress which is likely to cause confusion with PRL. Id. at 9. It strains credulity that USPA asked the district court, and now this Court, to read the 1984 Order as granting USPA any special rights or according it broader protection due to its status as either a sports association or a retail licensor. Moreover, the fact that USPA may have incontestable trademarks (for other categories of goods) in its name and that [c]onsumers have seen the U.S. Polo Assn. name on products in the U.S. ranging from apparel to leather goods to watches to home textiles due to a settlement agreement that expressly applied only to such goods does nothing to alter the parties rights, to diminish PRLs right to protect its marks or to change the nature of the Polaroid analysis. Equally mistaken is USPAs argument regarding the safe distance rule and this Courts determination that it was not reversible error for the district court in the Apparel Litigation to have declined to give a jury instruction that incorporated that rule. This Courts determination was rooted in a desire to avoid confusing the jury as to the proper standard for a finding of likelihood of confusion. It did not

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reflect, expressly or implicitly, the acknowledgement of affirmative rights granted to [USPA] as set forth in the 1984 Order, because there were no such rights granted to USPA in that prohibitory order. It also did not reflect a determination by this Court that USPA is anything other than a traditional infringer or that the Apparel Litigation was anything other than a traditional infringement case. This Courts affirmation of the district courts decision to reject a jury instruction regarding the safe distance rule in no way undercuts the general rule or its applicability to USPA. In all events, the district court did take into account USPAs right to use a non-infringing mounted polo player logo, but nonetheless found the USPA Mark to be infringing. C. The District Courts Conclusion That USPA Adopted The USPA Mark In Bad Faith Was Amply Supported By The Evidence of Record As noted, in 2009, the USPA Parties decided to enter the mens fragrance market with the Double Horseman logo in combination with U.S. POLO ASSN. on blue packaging with light gold metallic print. That mark and trade dress violated the 1984 Order and was an obvious effort to enter a market in which it had no strategic business plan, no budget, no advertising plan, no experience and no presence, by creating confusion and benefiting from consumers mistaken association of the USPA Marks with the reputation and good will of the PRL

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Parties and their best-selling fragrance products. 26 See district courts opinion at A-2315. USPA also stated during the litigation and in its appeal brief that it had justifiable reasons for adopting blue packaging, namely, that consumers would associate its fragrance with the color of certain tags,27 although hardly visible and located on the inseam, waistband, hangtag and hook of certain articles of apparel.28 Tags on the inseam of a pair of shorts cannot be said to function as source identifiers or provide the basis for associating USPAs other goods with its fragrance. The district court appropriately found USPAs testimony not to be persuasive. A-2314. USPAs efforts to explain away its bad faith are unavailing. The record clearly establishes that the PRL Parties had used the PRL Marks on fragrances since at least 1978.29 That the Double Horseman logo purportedly was developed before PRL launched its POLO BLUE product does nothing to negate USPAs bad faith in adopting and using the USPA Mark and offensive trade dress after PRLs launch. Bad faith relates to adoption and use. By the time USPA started to use the

26 27 28 29

A-1054:22-1056:8, A-1056:9-1057:10. A-1043:9-12. A-1041:13-A-1043:13. A-814:11-A-815.

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USPA Mark (including the Double Horseman logo and U.S. POLO ASSN. word mark) in connection with the blue trade dress, POLO BLUE was well established as a market-leading fragrance. A-816:8-14; A-819:23-24; A-832:1-12. USPAs appeal brief states that [b]efore LOral filed its motion for a preliminary injunction, the [USPA] decided to use other principal colors for packaging in connection with fragrance products. This decision was made in an effort to focus the declaratory judgment action on the use of the Double Horseman mark rather than the trade dress.30 However, the record evidence is to the contrary. Between the middle of November 2009, when USPAs declaratory judgment complaint was filed and USPAs fragrance displaying the Double Horseman logo was first introduced, and the second half of February 2010, when USPA claims to have made the decision to drop the color blue as the predominant background color for its fragrance packaging, nothing changed concerning the conflict with the PRL Parties.31 The evidence shows that the decision to change packaging color was made, abruptly and without explanation, on March 4, 2010, after LOral filed its motion for a preliminary injunction, which attached the

30 31

Appellants Br. 15-16, citing A-1003:16-1004:10. A-1044:7-1045:9; A-1048:20-1049:3.

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report and results of its first consumer survey demonstrating a very high likelihood of confusion.32 As previously noted, the jurys finding regarding the Double Horseman logo in the Apparel Litigation is irrelevant to the issues involved in this case. Regardless, the district court clarified that its finding of bad faith was based in part on USPAs initial adoption and use of the blue packaging. Therefore, the mark before the district court was not the Double Horseman logo that had been considered by the jury in connection with apparel, but a mark consisting of the Double Horseman logo, the wording U.S. POLO ASSN., and the blue trade dress. The purported coexistence of one of those elements namely, the Double Horseman -- with the PRL Marks in other categories of goods is irrelevant and does nothing to mitigate USPAs bad faith in adopting and using the mark as a whole, including the infringing trade dress, in 2009. Moreover, at the time that USPA adopted and used that mark for fragrances, it was aware of the TTAB Order that rejected USPAs arguments regarding the relatedness of apparel and fragrances, suggesting that any claims USPA makes that it relied on the Apparel Litigation is itself indicative of USPAs bad faith.

32

A-1733; A-1003:16-A-1004:10, A-1047:22-A-1049:3.

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Finally, USPAs argument that the use of the color blue in trade dress cannot support a finding of bad faith is extremely difficult to reconcile with the 1984 Orders prohibition against the use of a mounted polo player used in conjunction with trade dress, i.e., labels, hangtags and packaging that use white or silver lettering on a blue background. The fact that USPA adopted and used blue packaging that mimics PRLs best-seller, POLO BLUE, for USPAs own fragrance product is strong evidence of USPAs bad faith. Using barely visible tags on the inseams of certain apparel items hardly provides a basis for excusing the wholesale copying of PRLs trade dress for fragrances. The district court considered USPAs arguments regarding its good faith adoption of the USPA Mark in connection with fragrances and found them unavailing.33 That determination was well reasoned and well supported by the record evidence. It was far from clear error. D. The District Courts Analysis of the Polaroid Factor Regarding Similarity of the Marks Was Properly Conducted USPA argues that the district courts analysis regarding the similarity of the parties marks one of the required Polaroid factors was improper because it should have considered such factors as each partys use of its own marks on apparel, the relationship between the fragrance and apparel markets and

33

A-2313-A-2315 and A-2331-A-2346.

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consumers ability to distinguish [USPAs] marks from PRLs marks.34 USPA provides no pertinent legal authority for that proposition. USPA again attempts to use the Apparel Litigation preclusively despite the difference in the marks there and here. Quite naturally, the jury in the Apparel Litigation made no separate findings regarding the similarity of the marks there being considered. The jury rendered a final verdict of non-infringement (with respect to three of the four marks considered), without detail as to why. It may be that the jury found the marks to be highly similar but that other factors weighed against a finding of infringement on the facts of that case. We do not and cannot know. It would have been improper for the district court here to defer its responsibility to conduct an analysis of the similarity of the marks. The district court conducted an appropriate and traditional analysis of the similarity of the parties respective marks in appearance, sound and meaning to determine whether the similarity between them is likely to cause confusion among potential customers, taking into account the context in which the marks are displayed and the totality of factors that could cause confusion. Louis Vuitton Malletier v. Burlington Coat Factory Warehouse, 426 F.3d 532, 537 (2d Cir. 2005); Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. V. Steinway & Sons, 523

34

Appellants Br. 33.

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F.2d 1331 (2d Cir. 1975). The marks at issue here will not be displayed side-byside in the marketplace.35 The question to be considered in the similarity analysis, therefore, is not whether differences are easily discernable on simultaneous viewing, but whether they are likely to be memorable enough to dispel confusion on serial viewing. Louis Vuitton, 426 F.3d at 538. The analysis should consider the products sizes, logos, typefaces, and package design and colors to determine whether the overall impression in the relevant market context would lead consumers to believe that the product emanates from the same source as products bearing the senior users mark. Paco Sport, Ltd. v. Paco Rabanne Perfumes, 234 F.3d 1262 (2d Cir. 2000). USPA argues that a proper analysis of the similarity between the marks would have excluded consideration of the visual similarities between the marks, but would have included each partys use of its own marks on apparel, the relationship between the fragrance and apparel markets, and consumers ability to distinguish the [USPAs] marks from PRLs marks.36 The district court considered that argument and correctly found it unpersuasive because [n]o prior decision addressed the marks at issue here in the fragrance market, and the similarity of marks analysis focuses on the particular industry where the marks

35 36

A-824:6-9; 44:21-45:13; A-1065:4-10, A-1068:14-1069:4. Appellants Br. 32-33.

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compete.37 Further, no prior decision addressed the similarity of the marks at issue in this case in connection with any products, as the marks before the court in 1984 and 2006 differed from the USPA Mark at issue here. The district court held that there was insufficient evidence to make a conclusion either way regarding consumers ability to distinguish between the parties marks in the apparel market.38 Despite USPAs assertion that there is no evidence of a difference between the apparel and fragrance markets, witnesses for PRL and LOral credibly testified to the differences between the markets, the customers, the shopping experience and the manner and context in which the marks would be encountered in the fragrance market versus the apparel market.39 Although it may not be proper for a fact finder to make a determination of infringement based solely on a side-by-side visual comparison of the marks at issue, a visual comparison of the marks is not only acceptable but also expected when conducting an analysis of the Polaroid factor that expressly relates to the similarities -- including the visual similarities -- between the marks. The district court conducted such an analysis, considering the totality of factors that could cause confusion, and described in detail the striking similarities between the marks

37 38 39

A-2294-A-2295 (internal citation omitted). A-2301. A-814:11-A-815:3; Darsses Dep. 192:11-193:21.

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in content, perspective, proportion, typeface, design, color and connotation, taking account of the logo, the word mark and the overall packaging. The courts determination regarding the similarity of the marks here at issue was not clearly erroneous. E. The District Court Properly Concluded That Apparel and Fragrances Constitute Separate Markets and That The Purported Relatedness Between Them Was Irrelevant The USPA Parties misunderstand the concept of related goods in the trademark infringement context as well as the concepts of bridging the gap and natural zone of expansion. Only a plaintiff (the senior user) may actually or potentially bridge the gap or naturally expand, as a means of protecting its mark against a defendant that uses an infringing mark on different goods. Those concepts may not be invoked by a defendant (junior user). The reliance by USPA on the cases it cites to support its contention that the right to expand into the fragrance market is protected by its prior use (albeit of a different mark) in the related apparel market is misplaced. Those cases all involve actions regarding the use of a mark by a junior user in connection with goods other than those offered by the senior user. In such cases, courts consider the relatedness of the goods and/or markets to determine whether the senior users use on one category of goods nonetheless is entitled to protection against a second-comers use on similar but non-competitive goods, because the goods are so closely related that

43

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consumers are likely to believe that they emanate from the same source. 4 McCarthy on Trademarks and Unfair Competition 24:1, at 24-7-8 (4th ed. 2012). The cases cited by the USPA Parties do not disagree. See Jaguar Cars Ltd. v. Skandrani, 771 F. Supp. 1178 (S.D. Fla. 1991) (senior user of a strong mark may protect mark against junior user, even were junior user first to use mark on goods in issue). See also Scarves By Vera, Inc. v. Todo Imports Ltd., 544 F.2d 1167 (2d Cir. 1976) (senior user protected from use of mark by junior user on related goods). Where the goods at issue are identical, as they are here, the concepts of relatedness, bridging the gap (as to products) and zone of natural expansion do not apply. They certainly cannot be used defensively by the junior user seeking to enter a product category using an infringing mark, and USPA has not cited a single case to the contrary. Moreover, although USPA insists that its move into the fragrance market was a natural extension of its retail licensing program, USPA Properties president, Mr. Cummings, admitted at trial that he was not aware of a single sporting association that licenses its trademark for use in connection with mens fragrances (although many license their marks for use in connection with apparel).40 There is nothing natural about a sports association for polo or any other sport

40

A-1038:4-1039:6.

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extending its licensing program into the market for mens fragrances. Despite USPAs insistence to the contrary, the market for and marketing of fragrances differs greatly from the market for and marketing of apparel.41 Specifically, PRLs Vice-President of Brand Management testified that apparel and fragrances are different businesses, it is not just a matter of the price point being the same; that people shop for apparel and fragrances differently; that the consumer base for PRL fragrances is not the same as for PRL apparel; that the consumer experience of shopping for fragrances is vastly different from the marketplace context of shopping for apparel; and that the fragrance market presents greater opportunities for consumer confusion and brand damage than the apparel market.42 USPAs reliance on Times Mirror Magazine, Inc. v. Field & Stream Licenses Co., 294 F.3d 383 (2d Cir. 2002) is misplaced inasmuch as the court there held that neither party was the senior user of the marks with respect to the goods at issue and the question was which party had the right to expand its use into that market. Here, there is no dispute that PRL is the senior user of the Polo Player Logo and POLO mark in the fragrance market. USPA mistakenly frames the issue as its being the senior user of the U.S. POLO ASSN. mark on apparel and states that it has the right to expand its use of the mark into the related fragrance market

41 42

Darsses Dep. 192:11-193:21. Id.; Darsses Dep. 103:16-23.

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unless that use is specifically found to be confusing with PRLs existing marks.43 As noted, that is a misstatement of the law. First, where marks are not identical, each party always is the senior user of its own specific mark. To refer to USPA as the senior user of the U.S. POLO ASSN. mark on apparel is nonsensical (particularly when PRL is indisputably the senior user of marks using the term POLO in connection with apparel). Second, USPAs rights, whatever they may be, to use certain marks in connection with other goods do not give it any rights to expand its use of those marks to different goods where to do so would violate the trademark rights of an existing senior user. Third, the district court held that USPAs use of its mark in the fragrance market is specifically found to be confusing with PRLs existing marks, thereby establishing the very proviso that USPA acknowledges prohibits its expansion. PRL has made no attempt to usurp or displace the universe of [USPAs] marks.44 PRL merely opposes USPAs adoption and use of infringing marks in connection with fragrances. As the senior user of POLO and the Polo Player Logo in connection with fragrances, PRLs use of its own POLO mark does, indeed give it the automatic right to protect that mark and its Polo Player Logo against the infringing marks of USPA, the junior user in the fragrance market.

43 44

Appellants Br. 34-35. Id., 35.

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The district court determined that the relatedness of fragrance and apparel and USPAs purported prior rights with respect to apparel were not relevant to its Polaroid analysis. That determination was not clearly erroneous and neither were the courts resulting determinations regarding the Polaroid factors of similarity of the marks, actual confusion and bad faith. F. The District Court Properly Assessed and Evaluated The Evidence Regarding Confusion And The Weight To Be Given Each Partys Survey USPA argues that the district court erred by dismissing as irrelevant the lack of record evidence regarding actual confusion in the apparel marketplace because when products have coexisted for a sustained period of time, a lack of evidence of consumer confusion among those products is a strong indicator that consumers are not confused.45 However, the parties fragrance products cannot be said to have coexisted, as USPAs sales were at best de minimis. The extent of confusion or lack of confusion in the apparel market -- with different marks from those here at issue -- is irrelevant, as the district court found. The district court certainly did not commit clear error in deciding not to give weight to the lack of sufficient evidence regarding any confusion in a market that the court, and the TTAB before it, had already determined was not sufficiently related to fragrances. In all events, there is insufficient record evidence addressing the subject.
45

Id., 37-38.

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Even if confusion with respect to apparel were rampant, it would have no role in this action. As a result of the Apparel Litigation, USPA has the right to use a form of the Double Horseman logo in connection with apparel regardless of whether the jury got it right, i.e., regardless of whether, in fact, that mark creates confusion in the marketplace. PRL had no reason or incentive to track any such confusion, as such confusion with respect to apparel would not be actionable. LOral certainly had no occasion to identify actual confusion in the fragrance market, as USPA never made more than miniscule use of the USPA Mark in connection with fragrances. The USPA Parties assertion that not a single representative of PRL or LOreal has ever brought an instance of actual consumer confusion or complaint to the attention of [the USPA Parties], either with respect to fragrances or any other coexisting goods is of no moment.46 Lack of evidence regarding confusion is not the same as evidence of lack of confusion. Even if there were lack of confusion with respect to apparel, it does not follow that there would be lack of confusion as to fragrances, a totally different market. Where a junior users mark is not yet in use in connection with the goods at issue, no showing of actual confusion is expected.

46

Id., 13.

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As is customary and, indeed, expected in a trademark infringement case, the parties submitted consumer surveys regarding the likelihood of confusion if USPA were to use the USPA Mark on fragrances. USPA argues that the district court erred in admitting and giving some weight to the survey submitted by the PRL Parties and in giving no weight to the USPA Parties survey. The courts decision regarding the weight to give each survey is reviewed for clear error. In view of the courts careful consideration of each survey and its evaluation of the testimony of each expert witness, it cannot be said that the district court committed clear error. LOrals attorneys engaged an expert, George Mantis, to conduct a survey. After USPA changed the color of the packaging, Mr. Mantis conducted a second survey. Both of the Mantis surveys followed the protocol of the widely acknowledged and accepted methodology first approved in Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366 (7th Cir. 1976), cert. denied, 429 U.S. 830 (1976). The Mantis surveys demonstrated a high likelihood of confusion if USPA were to sell fragrances bearing the Double Horseman logo alone or with a word mark that includes POLO, including as part of its name.47 The gross confusion levels found

47

A-1824A-2176.

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by the Mantis survey were in the same range as the gross confusion levels found by USPAs survey.48 USPA moved to exclude the Mantis surveys, based in part on an argument that the surveys control -- Mustang Blue cologne -- was improper because it is an iconic logo, and a well-known trademark or name cannot serve as an effective control. However, there is no prohibition against a control samples having attained secondary meaning or popularity. In all events, notwithstanding its conclusory statements regarding the fame of the Mustang Grille, USPA adduced no evidence, and there is none in the record, that the Mustang Grille logo is famous or even well-known with respect to fragrances or the people who buy them.49 The Mustang fragrance was used as a control because it is a fragrance that did not contain any of the elements being assessed (a polo player mounted on a horse and the word POLO), it provided the survey respondent the opportunity for guessing, it contained a symbol of a horse and, with respect to the first survey, it was the same color as the test sample.50 The district court considered USPAs arguments regarding the Mustang Blue control sample and found them unavailing.

48 49 50

A-1829, 1838; A-2016-17; A-2453. A-1193:2-11. A-873:24-874:10.

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The court admitted the Mantis surveys into evidence and ultimately gave them some weight when analyzing the confusion factor under Polaroid.51 The USPA Parties conducted a survey in an effort to show that there was no likelihood of confusion (the Helfgott Survey). The Helfgott Survey found similar levels of gross confusion as the Mantis surveys, but lower levels of net confusion. The PRL Parties moved to exclude the Helfgott Survey on several grounds, including that the controls used by Dr. Helfgott were fatally flawed in that they themselves created legally actionable levels of confusion that, by definition, eliminate their validity as control samples.52 The controls used in the Helfgott Survey impermissibly contained elements of the marks that were being tested for infringement, namely, a mounted polo player and the word POLO used as a trademark.53 One of the controls in fact would have violated the 1984 Order inasmuch as it used U.S. POLO in a manner which is likely to cause confusion with [PRL], as demonstrated by confusion levels of 28.5%. Most telling, Dr. Helfgott essentially admitted during trial that his controls did not function as controls.54

51 52 53 54

A-2311-A-2312. A-2453. A-1023:14-1024:11. A-1196:25-1197:23, A-1217:21-1218:7.

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The PRL Parties also objected to the Helfgott Survey because Dr. Helfgott preconditioned respondents by, for example, referencing the price of the product.55 Dr. Helfgott acknowledged at trial that his screening question could have affected the survey responses.56 In addition, the PRL Parties objected to the Helfgott Survey because Dr. Helfgott acknowledged that, at the time he prepared and signed the report, he had not personally reviewed the completed survey questionnaires the report did not contain a verbatim section that would have permitted the court to determine independently whether the responses were properly classified.57 The PRL Parties also objected that the Helfgott survey permitted respondents to spend 10 minutes staring at the test samples while being questioned, whereas the actual purchase selection process for mens fragrances takes much less time than that, and permitted respondents to correct for confusion by reading the label back to the interviewer.58 The district court considered and denied the PRL Parties motion to exclude, but, due to the noted defects, ultimately gave the Helfgott Survey no weight.59

55 56 57

A-2442. A-1177:7-21; A-1182:17-1183:7. A-1187:25-1188:6, A-1188:16-22; A-1213:23-1214:3; A-1214:8-17; 1218:171219:7; A-1221:6-16. A-1168:23-1169:11; A-1171:16-1172:20. A-2306-10.

58 59

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Other deficiencies in the Helfgott Survey include no evidence that it was double-blind (i.e., neither interviewer nor respondent knew sponsor of survey or its purpose); no evidence that the data were gathered or reported accurately; insufficient evidence that Dr. Helfgott tablulated, reviewed or coded the data. A1187:17-18; 1187:25-1188:6; A-1213:33-A-1214:13, 4-7. In light of the legal standards for surveys and survey control samples, the extensive additional defects of the Helfgott survey and the testimony elicited from each expert at trial, the district courts decision to admit both surveys was not an abuse of discretion and its determination regarding how much weight to give the respective surveys was not clearly erroneous. G. The District Court Properly Weighed the Polaroid Factors to Find Infringement But, In All Events, There Is No Balancing of the Factors That Would Have Led To A Different Result. Far from disregarding the USPA Parties arguments regarding their purported rights based on the parties history and prior litigation, regarding the relatedness of apparel and fragrance and regarding the purported lack of evidence of confusion despite coexistence in other markets, the district court considered all of those arguments and explained why they were unavailing. The district court concluded that there was no reason to depart from the traditional Polaroid analysis and, within that framework, determined that each of the Polaroid factors was either neutral or favored the PRL Parties. In particular, the district court found that the

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three factors typically considered the most important strength of the senior users mark, similarity of the marks and proximity of the goods all favored the PRL Parties. Inasmuch as the parties goods are identical and USPAs product was not yet on the market (other than in token quantities), the district court found that there was no gap to bridge and that the quality of the product could not be assessed. The district court admitted both parties surveys regarding consumer confusion but after reasoned deliberation gave some weight to the PRL Parties survey and no weight to the USPA Parties survey. The district court found that USPAs adoption of the Double Horseman logo in conjunction with the U.S. POLO ASSN. word mark, initially on blue packaging with light metallic print that bore a striking resemblance to PRLs best-selling POLO BLUE trade dress, was both in bad faith and in violation of the 1984 Order. Not a single Polaroid factor favors USPA. None of those determinations is clearly erroneous. Although this Court reviews the balancing of those factors de novo, there simply is no balancing of the factors that could favor USPA and justify reversing the district courts finding of infringement. II. The District Court Properly Granted Injunctive Relief Based on Testimony That USPAs Use of Its Infringing Mark Would Cause PRL Irreparable Harm The Supreme Court in eBay v. Mercexchange, LLC made clear that the standard four-factor test for granting a permanent injunction, which includes a

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demonstration of irreparable harm, applies to patent cases. This Court decided that eBay applies to preliminary injunctions issued for alleged copyright infringement60 and suggested that there was no reason that eBay would not apply to an injunction in any type of case.61 Even if eBay applied to trademark infringement cases, and there are sound reasons why it should not, legal research has failed to uncover a single trademark case within this circuit decided after eBay and Salinger that refused to enter an injunction after finding a likelihood of confusion. That is not surprising. In accordance with the admonition in eBay, historical practice, and prior cases are most helpful and instructive when the circumstances of a case bear parallels to litigation the courts have confronted before. eBay, at 396. The USPA Parties claim that the district court impermissibly presumed that PRL would suffer irreparable harm absent an injunction. In fact, the court considered and credited testimony regarding PRLs likely loss of control over its marks, image, reputation, good will and brand value if USPA were permitted to sell fragrances under a confusingly similar mark. PRLs Vice-President of Brand Management testified that, as a designer fashion brand, PRL exerts meticulous control over every detail of its premium products, in order to ensure that the brand

60 61

Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010). Id. at 78 n.7.

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promise expected by consumers is fulfilled.62 She testified that if a consumer mistakenly buys a product that they think is authentic Ralph Lauren but it is counterfeit and the quality will not be of the same standard and they have a bad experience with it, it tears down everything we have worked over close to 45 years to build. And everybody in our company certainly everybody that works with the product and works in advertising where we so carefully hone and craft our image, everybody that works in sales, everybody that has contact with consumers, knows that.63 LOrals General Manager Designer Fragrances Division testified that LOral pride[s] [itself] in offering only the highest quality products and my worry is, you know, someone has a bad experience with a fragrance and they think its ours, they tell other people. You know, damage to ones reputation can be very, very costly and we may not even know about it. A customer may just never buy our products again.64 If USPA were to commence sales of infringing products that turn out to be of poor quality, or simply disliked, a matter outside the control of the PRL Parties, the PRL Parties might never be able to establish the full measure of the reputational harm and damage to the goodwill associated with the

62 63 64

Darsses Dep. 187:2-20. Id., 154:4-155:5. A-837:3-23.

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PRL Marks, which in itself is a sufficient ground to issue an injunction without relying on a presumption. Furthermore, the PRL Parties have expended significant effort and resources in painstakingly cultivating a particular image that is associated with the PRL Marks and that underlies the enormously valuable reputation and goodwill associated with those marks. In the fragrance category, the Polo Player Logo and POLO word mark do not refer directly to the sport of polo per se (which is little known or appreciated in the United States), but rather evoke the image of a sophisticated, raffish, aspirational lifestyle that goes far beyond attendance at an occasional polo match. Videos and images used to promote fragrances sold under the PRL Marks feature yachts, vintage cars and well-dressed individuals attending parties at country estates; inspire notions of winning, seduction, adventure and celebrity and use allusions to polo matches as little more than a backdrop for the sophisticated, adventurous lifestyle of the type of man who would use the PRL Parties fragrances.65 Those efforts to create an association in the minds of prospective purchasers between the PRL Marks used in connection with fragrances and an aspirational style of life are confirmed by consumers perceptions of the PRL Parties fragrances. Consumers associate those fragrances not with the sport

65

A-842:17-24; A-2563-A-2590.

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of polo itself, but with subjective notions, concepts and aspirations, such as Classic, Quality, American, Sporty, Happiness and Confident.66 Given the likelihood of confusion between the Polo Player Logo and USPAs Double Horseman Trademark, the carefully cultivated image, reputation and goodwill that are represented and symbolized by the PRL Marks would be destroyed or seriously impaired if USPA were allowed to use its confusingly similar mark on fragrances. The scent of the USPA Parties fragrance, the presentation, the packaging and the impression created will not be those of Ralph Lauren. According to Mr. Cummings, the intent of USPA is to associate the USPA Mark as applied to fragrances with the sport of polo and to convey key elements of the game of polo itself.67 The image of the USPA brand is, in Mr. Cummings own words, incompatible with the image associated with the PRL Marks, which Mr. Cummings disparaged as elitist and snobby.68 Whatever pedestrian image the USPA Parties end up creating for the USPA Mark as applied to fragrances, that image inevitably will be very different from the image associated with the PRL Marks. If USPA is allowed to market fragrances bearing the Double Horseman logo and POLO that are likely to be confused with the fragrances bearing the

66

A-2563-A-2590, at A-2571. A-977:22-979:21. A-979:5-12.

67 68

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PRL Parties Polo Player Logo and POLO mark, in a manner that evokes an image that differs from the one associated with the PRL Marks, it would effectively destroy the reputation and goodwill that has so carefully been cultivated for the PRL Parties fragrances over the years. The PRL Marks embody consumers unique perception of the PRL Parties fragrances that the PRL Parties have spent so much time, money and effort developing. Allowing USPA to sell and market a fragrance bearing an infringing mark will essentially place the goodwill and reputation embodied by the PRL Marks in the hands of the USPA Parties. A consumer who mistakenly purchases a USPA fragrance believing it to be one of the PRL Parties fragrances will expect -- but not receive -- the brand promise that is embodied in the PRL Parties marks, damaging the reputation of the PRL Parties, their marks and the PRL brand in the consumers eyes in a way that cannot be remedied by monetary damages.69 Such a consumers decision, without complaint, not to purchase a PRL product in the future will deprive the PRL Parties of the lifetime value of that customer, without their even knowing of the loss. That is precisely the type of irreparable harm that an injunction is intended to prevent or remedy and provides ample support for the district courts decision to issue an

69

Darsses Dep., 187:2-20.

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injunction preventing USPA from using its infringing mark in connection with fragrances. III. The District Court Properly Exercised Its Discretion In Fashioning An Injunction Tailored To Address The Threatened Harm Posed By A Repeat Infringer USPA objects to the scope of the injunction, stating that it is impermissibly broad because it enjoins marks beyond the specific mark that was before the district court. The standard of review of the propriety of the scope of an injunction is abuse of discretion. eBay at 391. The notion that an injunction is constrained to the exact mark used on the exact goods has no basis in law or equity. All that would accomplish is to guarantee future litigation based on the smallest of changes by an enjoined party. Indeed, the litigation history between PRL and the USPA Parties confirms that past is prologue and that the courts will be occupied by similar cases ad infinitum. It is well-established that a party that previously has infringed a trademark may be required to suffer a position less advantageous than that of an innocent party. Patsys Brand Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 220 (2d Cir. 2003), citing, Oral-B Laboratories, Inc. v. Mi-Lor Corp., 810 F.2d 20, 24 (2d Cir. 1987). There is no doubt that a court may frame an injunction that will keep a proven infringer safely away from future infringement. 5 McCarthy on Trademarks and Unfair Competition 30:4, at 30-16-30-18 (4th ed. 2012).

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As observed by this Court, the safe distance rule may be applied (1) in fashioning injunctions for previously adjudicated infringers, (2) in contempt proceedings in determining whether an enjoined infringer has violated the injunction, thus relieving the reviewing court of the need to retry the range of issues that may be relevant in an infringement action for each small variation the defendant makes to the enjoined mark and (3) in instructing a jury. The first two have been found to be valuable uses of the rule. PRL Holdings, Inc. v. United States Polo Assn, Inc., 520 F.3d at 117-18. USPA is not only a repeat offender, but it also is a repeat offender of the same mark. When Judge Sweet denied the PRL Parties request for attorneys fees despite finding that the USPA Parties had acted in bad faith, he expressly stated that the scope of injunction would provide a proper remedy. He then incorporated and repeated the same provisions contained in the 1984 Order, the very order that the USPA Parties rely on without complaint as providing them with a road map for future conduct. The irony and disingenuousness of their position with respect to the scope of injunction is self-evident.

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CONCLUSION For the foregoing reasons, appellees respectfully request that the Court affirm the judgment of the district court and the injunction as entered. Dated: New York, NY October 16, 2012 Respectfully submitted, PAUL HASTINGS LLP /s/ Robert L. Sherman By: Robert L. Sherman (RS 5520) 75 East 55th Street New York, NY 10022 (212) 318-6000 (telephone) (212) 318-6847 (fax) robertsherman@paulhastings.com Attorneys for LOral USA Inc.

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CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION, TYPEFACE REQUIREMENTS AND TYPE STYLE REQUIREMENTS This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because this brief contains 13,987 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P.32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Office Word in 14-point Times New Roman font. Dated: New York, New York October 16, 2012 PAUL HASTINGS LLP /s/ Robert L. Sherman By: Robert L. Sherman 75 East 55th Street New York, NY 10022 Telephone: (212) 318-6000 Facsimile: (212) 318-6847 robertsherman@paulhastings.com Attorneys for LOreal USA Inc.

LEGAL_US_E # 100833980.1