                                                                                                                           Opinions of the United
1999 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


1-21-1999

A&H Sportswear Inc v. Victorias Secret
Precedential or Non-Precedential:

Docket 97-1570




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Filed January 21, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 97-1570

A&H SPORTSWEAR INC.; MAINSTREAM
SWIMSUITS, INC.,
       Appellants in No. 97-1570

v.

VICTORIA'S SECRET STORES, INC.;
VICTORIA'S SECRET CATALOGUE, INC.

On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 94-cv-07408 )
(District Judge: Hon. Franklin S. VanAntwerpen)

Argued May 19, 1998

Before: SLOVITER, GREENBERG and GIBSON,*
Circuit Judges

Resubmitted December 14, 1998

Before: SLOVITER, GREENBERG and GIBSON,* Circuit
Judges

(Filed January 21, 1999)



_________________________________________________________________

* Hon. John R. Gibson, United States Senior Circuit Judge for the
United States Court of Appeals for the Eighth Circuit, sitting by
designation.
       Michael F. Snyder
       Seidel, Gonda, Goldhammer &
        Abbott
       Philadelphia, PA l9l02

       Norman Seidel
       Laub, Seidel, Cohen & Hof
       Easton, PA 18042

       Arthur H. Seidel
       Stephen J. Meyers (Argued)
       Seidel, Gonda, Lavorgna & Monaco
       Philadelphia, PA l9l02

        Attorneys for A & H Sportswear
        Inc. and Mainstream Swimsuits,
        Inc., Cross-Appellants in No. 97-
        1570

       H. Robert Fiebach
       Cozen & O'Connor
       Philadelphia, PA l9l03

       Frank J. Colucci (Argued)
       Richard P. Jacobson
       Colucci & Umans
       New York, N.Y. 10022

        Attorneys for Victoria's Secret
        Stores, Inc. and Victoria's Secret
        Catalogue, Inc., Cross-Appellees in
        No. 97-1570

OPINION OF THE COURT

SLOVITER, Circuit Judge.

This trademark infringement action was filed by A&H
Sportswear Inc. and its affiliate, Mainstream Swimsuits,
Inc., the maker and distributor respectively of swimwear
under the trademark MIRACLESUIT (together "A&H"),
against Victoria's Secret Stores, Inc. ("VS Stores"), and
Victoria's Secret Catalogue, Inc. ("VS Catalogue"), (together

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"VS"), a well-known manufacturer of lingerie and now
swimwear. The District Court gave judgment for VS on
A&H's claim that VS's use of THE MIRACLE BRA on its
lingerie infringed the MIRACLESUIT trademark, finding that
there was no likelihood of confusion. The District Court
also found that VS had violated the Lanham Act by its use
of THE MIRACLE BRA on its swimwear, finding a
"possibility of confusion" with the MIRACLESUIT swimsuit
made by A&H, and ordered certain relief.

VS appeals the judgment that THE MIRACLE BRA
swimwear infringes A&H's MIRACLESUIT trademark (No.
97-1541), arguing that the District Court applied an
erroneous standard of law. A&H filed a cross appeal (No.
97-1570) contending that the District Court clearly erred in
failing to find a likelihood of confusion between THE
MIRACLE BRA mark and A&H's prior MIRACLESUIT mark.

This panel of the court heard argument on the appeal
and cross-appeal on May 19, 1998. Thereafter, we
recommended that the court originate a rehearing en banc
to review whether it wished to adhere to the standard of
possibility of confusion applied by the District Court. After
giving the parties an opportunity to be heard on that issue,
the court voted to consider VS's appeal (No. 97-1541) en
banc, but resubmitted A&H's cross-appeal (No. 97-1570) to
the panel as not presenting any issue requiring en banc
consideration. Accordingly, we turn to the issues raised on
A&H's cross-appeal.

I.

FACTS AND PROCEDURAL HISTORY

The facts underlying this cross-appeal are set forth in the
District Court's published opinion, A&H Sportswear Co. v.
Victoria's Secret Stores, Inc., 926 F. Supp. 1233 (E.D. Pa.
1996) (addressing liability).1 We will set forth the pertinent
_________________________________________________________________

1. The court's other published opinion in this case, A&H Sportswear Co.
v. Victoria's Secret Stores, Inc., 967 F. Supp. 1457 (E.D. Pa. 1997) (as
amended), addresses remedies and relates solely to the appeal before the
en banc court.

                                3
facts and procedural history needed to address the
substance of this appeal, recognizing that our discussion
will duplicate some of the material in the en banc opinion.
The District Court's Findings of Fact from the opinion on
liability are designated hereafter as FF.

A&H, a closely held Pennsylvania corporation and maker
of 10% of the nation's swimsuits, was issued a trademark
for its MIRACLESUIT on October 27, 1992; its affiliate,
Mainstream Swimsuits, Inc., a Pennsylvania corporation,
served as the exclusive distributor of the MIRACLESUIT
through its SWIM SHAPER division. Both corporations are
controlled by members of the Waldman family. FF 1-2.

The MIRACLESUIT was developed and subsequently
marketed as a "control" suit whose patented fabric and
design affords the wearer greater "hold-in" control of the
hips and waist, which makes the wearer appear slimmer
without the use of girdle-like undergarments. Most
MIRACLESUITs contain underwire bras, are of a one-piece
design, and retail for $45 to over $100. FF 14. Thefirst
interstate use of the mark MIRACLESUIT and the first
interstate sale of a MIRACLESUIT occurred in November
1991. FF 21. The name MIRACLESUIT was chosen because
it was "unique, dynamic, exciting, and memorable." FF 22.
In 1992, the MIRACLESUIT was widely advertised, shown,
and discussed in trade shows, magazines and the electronic
media. FF 27. The MIRACLESUIT was also sold for a brief
time in the VS catalogue (1,700 suits were purchased by VS
in 1992 and 1993), but the relationship was discontinued
because in several instances VS failed to identify the
swimsuit by its MIRACLESUIT trademark. FF 29, 30.

VS Stores, the nation's top retailer of lingerie, is a
Delaware corporation headquartered in Columbus, Ohio,
and operates over 650 stores throughout the country which
focus on intimate apparel, with bra sales the leading
product. FF 5. VS Catalogue, a Delaware corporation
headquartered in New York City, is a mail order business
with a much wider array of merchandise (including
swimwear) sold through its over 300 million catalogues
circulated each year. FF 6. The companies responsible for
the stores and the catalogue are independent subsidiaries

                                4
of Intimate Brands, Inc., owned by The Limited, Inc., based
primarily in London. FF 7.

In 1992, VS Stores began developing a cleavage-
enhancing bra which was introduced (then unnamed) in
each store in August 1993 and first appeared in the VS
catalogue in February 1994. FF 12, 17, 19. The bra uses
removable pads, lace, straps, and underwire to accentuate
the wearer's bust. FF 15. VS Stores sought a name for its
new push-up bra that had a "fresh, flirtatious fun attitude."
It chose THE MIRACLE BRA name in December 1992,
allegedly after a model tried the new bra and exclaimed,
"Wow, this is a miracle!" FF 23. The name THE MIRACLE
BRA was first used in VS Stores in November 1993. FF 19.
VS Stores was issued a registration for its trademark THE
MIRACLE BRA on August 9, 1994. FF 25. Since itsfirst
brisk sales, THE MIRACLE BRA, which retails for under
$20, has been heavily marketed and has generated over
$132 million in sales. FF 69.

A&H, which did not initially object to VS's trademark use
of THE MIRACLE BRA, did so after VS began to extend THE
MIRACLE BRA into swimwear with its introduction of THE
MIRACLE BRA bikini in the November 1994 VS catalogue
and in ten VS stores as a test market. VS's sales of
swimwear expanded rapidly, and in 1995 VS incorporated
THE MIRACLE BRA design and trademark into a one-piece
swimsuit.

In August 1994, even before its first sale, VS Stores
applied for a registration of THE MIRACLE BRA trademark
for swimwear. FF 34. In February 1995, the Patent and
Trademark Office (PTO) refused the registration on the
basis of A&H's prior registration of the MIRACLESUIT,
although A&H had not interposed an objection to the
registration. FF 31, 36. Apparently because it had been
using THE MIRACLE BRA name in lingerie, neither VS
Stores nor VS Catalogue conducted a separate trademark
search of THE MIRACLE BRA trademark as it applied to
swimwear. FF 35. In December 1994, just a month after the
introduction of THE MIRACLE BRA swimwear collection,
A&H filed this suit alleging, inter alia, infringement of its
trademark MIRACLESUIT, and seeking a preliminary

                               5
injunction and damages. The District Court consolidated
the injunction hearing with a bench trial on the merits.

Following a two-week bench trial, the District Court
found no likelihood of confusion between THE MIRACLE
BRA mark as applied to lingerie and the MIRACLESUIT
mark. Accordingly, the court entered judgment for Victoria's
Secret and against A&H on that claim of infringement.
When VS appealed from the District Court's decision in
favor of A&H with respect to THE MIRACLE BRA for
swimwear, A&H filed this cross-appeal. We have
jurisdiction under 28 U.S.C. S 1291.

II.

DISCUSSION

The MIRACLESUIT v. THE MIRACLE BRA for Lingerie

In a trademark infringement action, the "likelihood of
confusion" between two marks is a factual matter, subject
to review for clear error. Versa Prods. Co. v. Bifold Co., 50
F.3d 189, 200 (3d Cir. 1995). Clear error exists when,
giving all deference to the opportunity of the trial judge to
evaluate the credibility of witnesses and to weigh the
evidence, we are "left with a definite and firm conviction
that a mistake has been committed." Anderson v. Bessemer
City, 470 U.S. 564, 573 (1985) (quoting United States v.
United States Gypsum Co., 333 U.S. 364, 395 (1948)). The
District Court's conclusions of law are subject to plenary
review. See Duraco Prods., Inc. v. Joy Plastic Enters., 40
F.3d 1431, 1438 (3d Cir. 1994).

In order for A&H, as the owner of a valid and legally
protectable mark, to hold VS liable for trademark
infringement under S 32 of the Lanham Act, it must show
that VS has used a confusingly similar mark. Section 32(1)
provides, in pertinent part:

       Any person who shall, without the consent of the
       registrant--

       (a) use in commerce any reproduction, counterfeit,
       copy, or colorable imitation of a registered mark in

                                6
       connection with the sale, offering for sale,
       distribution, or advertising of any goods or services
       on or in connection with which such use is likely to
       cause confusion, or to cause mistake, or to deceive;
       . . . shall be liable in a civil action by the registrant
       . . . .

15 U.S.C. S 1114(1) (emphasis added).

Similarly, S 43(a) of the Lanham Act, which governs
unfair competition claims, provides in pertinent part:

       Any person who, on or in connection with any goods or
       services, . . . uses in commerce any word, term, name,
       symbol, or device . . . or any false designation of origin
       . . . which--

       (A) is likely to cause confusion, or to cause mistake,
       or to deceive as to . . . the origin, sponsorship, or
       approval of [his or her] goods, services, or
       commercial activities by another person . . . shall be
       liable in a civil action by any person who believes
       that he or she is or is likely to be damaged by such
       act.

15 U.S.C. S 1125(a)(1) (emphasis added).

The central inquiry in a trademark infringement case
focuses on the likelihood of consumer confusion. The
District Court determined that VS's use of THE MIRACLE
BRA mark with lingerie did not create a likelihood of
confusion with the MIRACLESUIT.

The test to be applied to determine likelihood of
confusion differs when the goods compete and when they
do not. Where the trademarks involved are not used on
directly competing merchandise we look to the ten "Scott
factors" set forth in Scott Paper Co. v. Scott's Liquid Gold,
Inc., 589 F.2d 1225, 1229 (3d Cir. 1978), sometimes also
called "Lapp factors" after Interpace Corp. v. Lapp, Inc., 721
F.2d 460 (3d Cir. 1983). The District Court sought to apply
those ten factors assiduously, and after analyses
summarized its conclusions as follows:

       [W]e hold that with respect to the likelihood of
       confusion between Plaintiffs' MIRACLESUIT and

                               7
       Defendants' THE MIRACLE BRA, (1) the two marks are
       similar in that they share a dominant portion, the word
       "miracle," yet remain distinct by the addition of the
       word that follows (bra or suit) when designating those
       respective goods; (2) the marks are both strong in their
       respective industries which we believe are swimsuits
       for Plaintiffs' MIRACLESUIT and lingerie for
       Defendants' THE MIRACLE BRA. As those marks
       extend into the industry dominated by the other (i.e.,
       MIRACLESUIT for lingerie or THE MIRACLE BRA for
       swimwear), the strength of the marks and the amount
       of protection they receive commensurately decrease; (3)
       the goods are in different price categories; (4) the
       Defendants had used their THE MIRACLE BRA mark
       for slightly over one year prior to an incident of actual
       confusion. The few incidents occurred just two months
       following Defendants' extension of THE MIRACLE BRA
       to swimwear, an industry in which Plaintiffs had
       already produced and registered their MIRACLESUIT
       for several years.[ ]; (5) based on the record before us,
       Defendants did not adopt its THE MIRACLE BRA mark
       with the conscious and deliberate bad faith intent to
       free-ride on the success of Plaintiffs' mark; (6) the
       evidence of actual confusion suggests it was
       Defendants' entry into swimwear rather than into the
       lingerie market with the name "miracle" that caused
       potential confusion among consumers; (7) the goods
       are marketed through the same media; (8) the products
       are marketed to women of similar age; (9) the goods
       serve different functions; and (10) the Plaintiffs' limited
       involvement in developing and manufacturing bras is
       not germane to our analysis where none of these efforts
       were conducted using marks or names at issue in this
       litigation. We therefore conclude that Plaintiffs have not
       met their burden under the Scott Paper standard and
       have not established a likelihood of confusion between
       their MIRACLESUIT swimsuit and Defendants' THE
       MIRACLE BRA (bra).

926 F. Supp. at 1263-64.

A&H argues, in essence, that the appropriate application
of the ten-factor Scott/Lapp test required afinding of a

                               8
likelihood of confusion and hence a finding of infringement.
We held in Fisons Horticulture, Inc. v. Vigoro Indus., 30 F.3d
466 (3d Cir. 1994), that the "weight given to each factor in
the overall picture, as well as its weighing for plaintiff or
defendant, must be done on an individual fact-specific
basis." Id. at 476 n.11. We consider the factors seriatim.

Similarity of the Marks

A&H contends that inasmuch as the District Court found
the marks were nearly identical by use of "miracle," it erred
in finding that the addition of a descriptive term ("bra" for
one and "suit" for the other) to the word lessened any
confusion. We have previously stated that descriptive terms
(such as "bra" and "suit") must be considered in assessing
infringement. See generally Country Floors, Inc. v.
Partnership of Gepner and Ford, 930 F.2d 1056, 1065 (3d
Cir. 1991). In evaluating the effect of similarity, it is also
relevant that the use of the housemark "Victoria's Secret"
frequently accompanies THE MIRACLE BRA product.
Similarly, the MIRACLESUIT swimsuits generally had a
sewn-in label bearing either the name SWIM SHAPER or
MIRACLESUIT, and, after August, 1994, also bore
hangtags. The key finding by the District Court regarding
similarity was, "We do not believe that the overall
impression created by THE MIRACLE BRA bra and the
MIRACLESUIT swimsuit is essentially the same." 926 F.
Supp. at 1257-58 (emphasis added). This is significant
because we have previously stated that it is the"overall
impression" created by the marks that should be the
central focus. Fisons, 30 F.3d at 478.

Strength of The Mark

The District Court found that the word "miracle" is
"fanciful," deserving the highest protection, and, thus, when
applied to lingerie or swimsuits, is a "strong mark." 926 F.
Supp. at 1259. However, the strength of MIRACLESUIT and
THE MIRACLE BRA and the amount of protection they
receive decrease when each mark is extended into the
other's industry. See id. at 1263.

A&H contends that the District Court failed to evaluate
the commercial strength of the MIRACLESUIT mark in the
context of its claim of reverse confusion, and we have found

                               9
no such discussion in the District Court's opinions.
According to A&H, THE MIRACLE BRA presence in the
marketplace overwhelmed the MIRACLESUIT mark such
that consumers would likely be confused in thinking the
senior MIRACLESUIT mark was attributed to the junior
user, VS. The District Court did not so find, and we do not
think such a finding was mandated by the evidence in the
swimwear vs. lingerie inquiry. We leave A&H's contention
regarding reverse confusion in the swimwear market to the
decision in No. 97-1541.

The Price of the Goods, the Time Before Confusion and
Actual Confusion

The District Court found that THE MIRACLE BRA and
the MIRACLESUIT have different prices (under $20
compared to over $50 respectively), see id. at 1260, a
finding that favors VS. This led the District Court to find
that the difference between the prices of the lingerie and
the swimsuits diminishes any likelihood of confusion
between the products.

The court also noted the absence of any confusion arising
from THE MIRACLE BRA for a year after it was introduced,
and that only after THE MIRACLE BRA was extended to
swimwear was there any incident of actual confusion. See
id. at 1260.

Defendants' Intent

As intent has been held to play a role in the analysis of
infringement, we look carefully at the District Court's
finding that A&H failed to prove "bad faith or deliberate
intent" to infringe by VS. Id. at 1261. The court reviewed
the evidence A&H had presented in an effort to show
intentional infringement, including the testimony of VS
Stores's Marketing Director, and found that, despite VS's
knowledge of the MIRACLESUIT mark and its failure to
conduct an additional trademark search before it expanded
THE MIRACLE BRA mark to swimwear, there was no bad
faith on the part of VS. See id.

A&H cites authority that intent is not necessary to prove
infringement and that good faith is not a defense to
infringement. We do not disagree as to the law. However,

                                10
the District Court's conclusion that there was no likelihood
of confusion did not rest on the intent of VS. We recognize
that another court might have drawn a different inference
from VS's prior knowledge of the MIRACLESUIT mark but
note that there were numerous other relevant facts before
the court. We cannot conclude that the District Court
clearly erred in finding no intent to infringe by VS.

Similar Marketing/Media Channels & Customers

The District Court found that VS and A&H "promote their
products through the same channels of trade and through
the same media." Id. at 1262, FF 43. It also found that the
target customer base for the MIRACLESUIT and THE
MIRACLE BRA bra is similar. FF 38, 39. Not surprisingly,
VS contends that the District Court weighed this factor too
favorably to A&H, and notes in support of its contention of
error that it sells THE MIRACLE BRA only through the VS
catalogue and VS stores. There is support for the District
Court's finding and we cannot characterize it as clearly
erroneous.

Relationship of the Goods

Consistent with each party's tendency to challenge any
finding that it deems adverse, A&H disputes the District
Court's finding that, although related, swimwear and
lingerie "serve different functions" and are "separate
industries." Id. at 1262-63. A&H hasfiled a motion asking
this court to take judicial notice that these industries are
"so closely related in their channels of trade and
appearance as to be, at times, indistinguishable." We deny
the motion as it requires a factual determination we believe
is inappropriate for judicial notice.

The reason we look to the relationship of the goods is to
ascertain whether the goods were so related that a
consumer would reasonably assume they were offered by
the same source, thereby leading to confusion. See Fisons,
30 F.3d at 481. The District Court found that "the
consuming public would [not] expect A&H or Mainstream
. . . to manufacture products in the lingerie market." 926 F.
Supp. at 1263. We find no clear error, particularly as A&H
had only limited involvement in the bra industry and, as

                               11
the District Court noted, the products were sold in distinct
manners.

A&H contends that the relationship between the products
is further evidenced by VS's opposition to A&H's proposed
registration of THE MAGIC BRA, a new product by A&H
developed after the commencement of this lawsuit. A&H
argues that because VS allegedly contends in the PTO
opposition that the MAGIC BRA for swimsuits is
confusingly similar to THE MIRACLE BRA for lingerie (a
position it contends is contradictory to VS's arguments
here), the District Court should have considered evidence of
that PTO proceeding. Inasmuch as the facts sought to be
introduced were post-trial, and the MAGIC BRA mark is
different than the marks at issue here, the District Court
did not abuse its discretion in refusing to consider that
evidence.

Factor Summary

In balancing the relevant factors, no one of the Scott
factors is more weighty than another except, perhaps, the
similarity of the marks. See Fisons, 30 F.3d at 476 & n.11
(emphasizing similarity). There is certainly similarity
between the marks at issue, but that similarity was
discounted by the District Court because the marks were
not identical in their entirety. In sum, the District Court
weighed each factor as required. After reviewing the record
and the parties' argument, we conclude that the court did
not commit clear error in finding there was no likelihood of
confusion between THE MIRACLE BRA mark as applied to
lingerie and the MIRACLESUIT mark, and hence no
infringement.2
_________________________________________________________________

2. A&H also appeals the District Court's rejection of its contention that
VS violated the Pennsylvania Antidilution law, 54 Pa. Cons. Stat. Ann.
S 1124, which provides for relief upon a showing of a "likelihood of
injury
to business reputation or of dilution of the distinctive quality" of a
registered mark. Id. The District Court noted that "predatory intent" was
relevant in establishing an antidilution claim, 926 F. Supp. at 1265
(citing Nugget Distribs. Coop. v. Mr. Nugget, Inc., 776 F. Supp. 1012,
1024 (E.D. Pa. 1991)). Having found no bad faith on the part of VS, the
court rejected the state claim. We find no error in the District Court's
dismissal of this claim.

                               12
III.

CONCLUSION

For the reasons set forth, we will affirm the judgment of
the District Court in favor of VS on A&H's claim arising out
of THE MIRACLE BRA with lingerie.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

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