                                                                                                                           Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-22-2005

Freedom Card Inc v. JP Morgan Chase & Co
Precedential or Non-Precedential: Precedential

Docket No. 04-3874




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                              PRECEDENTIAL

UNITED STATES COURT OF APPEALS
     FOR THE THIRD CIRCUIT

            No: 04-3874

     *FREEDOM CARD, INC.;
URBAN TELEVISION NETWORK, INC.,

                      Appellants

                 v.

    JPMORGAN CHASE & CO.;
CHASE MANHATTAN BANK USA, N.A.

    (Dist. Of DE No. 03-cv-00432)


CHASE MANHATTAN BANK USA, N.A.

                 v.

URBAN TELEVISION NETWORK, INC.;
     FREEDOM CARD, INC.,
           Appellants

                 v.

    JPMORGAN CHASE BANK;
    JPMORGAN CHASE & CO.,
            Third Party Defendants

      (Dist. Of DE No. 03-cv-00217)

*(Amended Per Clerk's Order Dated 12/2/04)

              No: 04-3876

     *FREEDOM CARD, INC.;
URBAN TELEVISION NETWORK, INC.,

                         Appellants

                    v.

    JPMORGAN CHASE & CO.;
CHASE MANHATTAN BANK USA, N.A.

      (Dist. Of DE No. 03-cv-00432)


CHASE MANHATTAN BANK USA, N.A.

                    v.

URBAN TELEVISION NETWORK, INC.;
     FREEDOM CARD, INC.,
           Appellants

                    v.


                    2
      JPMORGAN CHASE BANK;
      JPMORGAN CHASE & CO.,

            Third Party Defendants

      (Dist. Of DE No. 03-cv-00217)

*(Amended Per Clerk's Order Dated 12/2/04)

              No: 04-4285

     *FREEDOM CARD, INC.;
URBAN TELEVISION NETWORK, INC.,

                         Appellants

                    v.

    JPMORGAN CHASE & CO.;
CHASE MANHATTAN BANK USA, N.A.

      (Dist. Of DE No. 03-cv-00432)

CHASE MANHATTAN BANK USA, N.A.

                    v.

URBAN TELEVISION NETWORK, INC.;
     FREEDOM CARD, INC.,
           Appellants


                    3
                           v.

             JPMORGAN CHASE BANK;
             JPMORGAN CHASE & CO.,

                   Third Party Defendants

            (Dist. Of DE No. 03-cv-00217)

      *(Amended Per Clerk's Order Dated 12/2/04)

      Appeal from the United States District Court
              for the District of Delaware
         District Judge: Hon. Kent A. Jordan

              Argued: September 15, 2005

         Before: ROTH, McKEE and FISHER,
                   Circuit Judges

          (Opinion filed: December 22, 2005)

DANA M. CAMPBELL, ESQ. (Argued)
Owens, Clary & Aiken, L.L.P.
700 North Pearl Street, Suite 1600
Dallas, Texas 75201
Attorneys for Appellants


ETHAN HORWITZ, ESQ. (Argued)
LEONARD F. LESSER, ESQ.

                           4
KANDIS M. KOUSTENIS, ESQ.
Goodwin Procter LLP
599 Lexington Avenue
New York, New York 10022

RICHARD D. ALLEN, ESQ.
Morris, Nichols, Arsht & Tunnell
1201 North Market Street
P.O. Box 1347
Wilmington, DE 19899

Attorneys for Appellees

                          OPINION

McKEE, Circuit Judge.

       Urban Television Network, Inc (“UTN”)1 appeals from
the district court’s grant of summary judgment on the “reverse
confusion” trademark infringement and unfair competition



     1
       UTN” refers to Urban Television Network, Inc., and
Freedom Card, Inc., both of which are Delaware corporations
with their principal place of business in California. UTN owns
U.S. Trademark Registration Nos. 2,398,191 and 2,398,192 for
“FREEDOM CARD” in International Class 36 for credit card
services and in International Class 16 for credit cards,
respectively. Freedom Card, Inc., is the exclusive licensee of
the FREEDOM CARD marks.

                              5
claims UTN brought against Chase.2 UTN asserted those claims
in counterclaims it filed in response to Chase’s declaratory
judgment action. Chase filed that action to obtain a judicial
declaration that its CHASE FREEDOM credit card did not
violate any rights UTN had in its FREEDOM CARD
trademark.3 The district court ruled that Chase had not violated
UTN’s trademark, and this appeal followed. For the reasons that
follow, we will affirm.4



           2
               “ Chase” refers to JP Morgan Chase Bank and Chase
Manhattan Bank, USA, NA, and J.P. Morgan Chase & Co. JP
Morgan Chase Bank and Chase Manhattan Bank, USA, NA, are
wholly owned subsidiaries of J.P. Morgan Chase & Co.
   3
     In referring to the trademarks at issue in this case, we will
use all upper case letters as the district court did. The district
court also noted that “[t]here is some disagreement between
[UTN and Chase] as to whether Chase’s allegedly infringing
mark is ‘CHASE FREEDOM’ or ‘CHASE FREEDOM card.’”
However, the court concluded that “the word ‘card’ in this
context is descriptive. . . . Therefore, the inclusion or exclusion
of the word ‘card’ as part of Chase’s allegedly infringing mark
does not impact the conclusion reached herein.” Chase
Manhattan Bank, U.S.A. v. Freedom Card, Inc., 333 F. Supp. 2d
239, 244 n.10 (D. Del. 2004). We agree. Moreover, UTN does
not suggest the district court erred in analyzing its claim in that
context.
       4
      Although UTN filed notices of appeal from each of the
district court’s original and clarifying orders, UTN’s appellate

                                    6
                    I. BACKGROUND

        In December 2000, UTN began offering its FREEDOM
CARD in conjunction with CompuCredit Corporation. The
FREEDOM CARD was offered to extend credit and financial
services to the “sub-prime” credit market that is
disproportionately comprised of African-American consumers.
UTN focused its promotional efforts on “people who [had] bad
credit or [had] filed bankruptcy recently and [were] looking to
start all over.” Chase Manhattan Bank, USA v. Freedom Card,
Inc. 333 F. Supp. 2d 239, 242 (D. Del. 2004). UTN entered into
a contract with Queen Latifah, a prominent African American
entertainer, as part of its efforts to promote the FREEDOM
CARD. The majority of FREEDOM CARD customers had
credit lines of $300. On average, they were charged annual fees
and interest amounting to 140% over and above their principal
balance. Id.5 CompuCredit stopped marketing and issuing
new accounts for the FREEDOM CARD card after December
2001. Id. at 242 n.4. The district court found, FREEDOM


arguments are limited to the district court’s grant of summary
judgment to Chase. We have plenary review of the district
court’s grant of summary judgment. Lucent Info. Mgmt., Inc. v.
Lucent Techs., Inc., 186 F.3d 311, 315 (3d Cir. 1999).
  5
   The exceedingly high rate of interest and fees meant that the
average cardholder who charged a $100 coat on his/her
FREEDOM CARD would pay a total of $240, $100 for the coat
and another $140 in interest and fees.


                               7
CARD peaked at 28,193 accounts.

       For a number of years, Chase and Shell Oil Company
had issued a co-branded credit card called “CHASE Shell
MasterCard.” The card offered cash rewards on purchases of
Shell gasoline. In March 2002, Shell notified Chase that it was
terminating their relationship. Chase owned the Shell accounts
and in order to retain those accounts it began developing a new
credit card product that would serve existing accounts as well as
generate new ones.

        Chase’s research eventually lead to a rewards program
that allowed Chase’s customers to use its card at any gasoline
company’s filling station and receive rebates on gasoline as well
as other purchases. Chase claims that it named the card
“CHASE FREEDOM card,” because of the freedom it afforded
cardholders to purchase gasoline wherever the cardholder chose.
O n January 11, 2003, Chase sent a letter to its Shell account
holders notifying them that their Shell cards would be
automatically converted to CHASE FREEDOM cards.

        The CHASE FREEDOM card was officially announced
in a January 27, 2003, advertisement in the Wall Street Journal,
more than a year after the FREEDOM CARD card stopped
being issued. “The CHASE FREEDOM card [was] a reissue of
the CHASE Shell MasterCard.” Chase, 333 F. Supp. 2d at 242.
The CHASE FREEDOM portfolio consisted of approximately
1.5 million converted Shell accounts and fewer than 10,000
accounts acquired after the January 27, 2003 launch.

       Chase maintains that the converted account holders were

                               8
generally between the ages of 46 and 55, had a FICO6 score of
800 or higher, owned their own homes, and were married with
average annual incomes between $40,000 and $50,000. Of the
acquired account holders, 80% owned their own home and 60%
had a FICO score of 780 or higher. Chase claims that the
majority of CHASE FREEDOM cardholders had credit lines of
$5,000 – $10,000, with no annual fee and an annual percentage
rate of between 12.4% and 14.4%. Id.

        The Wall Street Journal advertisement for CHASE
FREEDOM card was the only advertisement that ever appeared.
Upon seeing the Wall Street Journal advertisement the day it
first appeared, Wesley Buford, UTN’s Chief Executive Officer,
contacted Chase and complained that Chase was infringing
UTN’s FREEDOM CARD mark. See n.1, supra.7 After


      6
      FICO refers to the Fair Isaac Corporation, which is the
industry standard credit scoring system. FICO scores are based
on a consumer’s credit history. “The higher the FICO score, the
more likely a consumer is to fulfill his credit obligations.
Chase, 333 F. Supp. 2d at 242 n.6,
  7
   Although Buford describes FREEDOM CARD’s market as
“sub-prime;” Chase alleges that FREEDOM CARD’s customer
base was actually “sub-sub-prime” as it consisted of the lowest
end of the credit spectrum. According to Chase, prime
customers usually have credit scores above 660 and sub-prime
customers score below 660. However, Chase claims without
contradiction that FREEDOM CARD focused on customers
with credit scores below 580, well below the federal guidelines

                              9
Buford objected, Chase immediately halted its advertising and
marketing efforts for “CHASE FREEDOM,” and refrained
from acquiring any new customers.8

        Thereafter, representatives of Chase and UTN met to
discuss the problem. Chase claims that discussions broke down
after UTN threatened to “have people protesting around
[Chase’s] branches” and to have demonstrations calling
attention to “the evils of Chase and this Freedom Mastercard
[sic]” and thereby “cause [Chase] a great deal of harm.”
Appellees’ Br. at 6. UTN claims that these meetings were
“positive and friendly” rather than confrontational and, based
upon prior positive communication between the parties and
Chase’s prompt cessation of CHASE FREEDOM card, Buford
still believed that the matter could be resolved amicably.
Appellants’ Br. at 12. As a consequence of that belief, UTN
claims that it maintained its relationship with Queen Latifah and
even executed another commercial production agreement with


for sub-prime lending. Chase, 333 F. Supp. 2d at 242.

   8
     The only other reference to the CHASE FREEDOM card
that appeared was a one-paragraph news article in Newsweek
magazine, entitled “Pump Up A Rebate.” Chase states that it
neither initiated nor promoted that article. However, UTN
claims that Chase booked 9,709 new accounts from January 27,
2003 through May 18, 2003, as a result of the Newsweek article.



                               10
her on February 19, 2003.

             II. DISTRICT COURT PROCEEDINGS

        On February 4, 2003, Chase filed the instant action in
district court seeking a declaration that its use of the CHASE
FREEDOM mark did not infringe any of UTN’s rights in the
FREEDOM CARD mark. UTN counterclaimed asserting third-
party claims for trademark infringement in violation of 15
U.S.C. § 1114,9 and unfair competition in violation of 15
U.S.C. § 1125(a)(1)(A).10 UTN also sought a determination


    9
       Section 32(1) of the Lanham Act, covering trademark
infringement, 15 U.S.C. § 1114(1) provides:

         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 connection with the sale,
         offering for sale, distribution, or advertising or
         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. . . .


        10
        Section 43(a) of the Lanham Act, covering unfair
competition, 15 U.S.C. § 1125(a)(1)(A), provides, in relevant
part:

                                  11
that Chase was in violation of a 1999 Mutual Confidentiality
Agreement between Chase and UTN.11

       At the close of discovery, Chase filed several motions
including a motion for summary judgment on UTN’s trademark
infringement and unfair competition claims. The district court
granted Chase’s motion for summary judgment upon
determining that there was no likelihood of confusion between
“CHASE FREEDOM” and FREEDOM CARD. See Chase
Manhattan Bank, supra. Thereafter, the district court issued


      Any person who, 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 likely to be
      damaged by such act.


 11
    The Confidentiality Agreement stems from communications
between UTN and Chase when UTN was approaching numerous
banks to explore possible affiliations for the FREEDOM CARD
that it subsequently issued in conjunction with CompuCredit.
The discussions between UTN and Chase ended without any
agreement regarding the card.

                               12
another order clarifying that the prior order had disposed of all
claims and that the judgment against UTN was therefore final.
This appeal followed.12

              III. HISTORICAL CONTEXT.

        As noted above, see n.1, supra, UTN relies upon two
registrations of its FREEDOM CARD mark – Nos. 2,398,191
and 2,398,192. The United States Patent and Trademark Office
(“USPTO”) initially rejected UTN’s applications for those
marks because it was concerned about the likelihood of
confusion with a prior registration of Parker Oil Company for
the mark “Fuel Freedom Card.” Parker also used that mark on
a credit card. In order to overcome those concerns, UTN
entered into a Consent Agreement with Parker Oil, and
submitted that agreement to the USPTO. In the Agreement,
UTN admitted there was no likelihood of confusion between
“FREEDOM CARD” and “Fuel Freedom Card” because the
marks “are dissimilar in appearance . . . dissimilar in sound . .
. dissimilar in connotation . . . dissimilar in commercial
impression” and “when considered in their entireties are not
likely to be confused” with one another. The USPTO accepted
the Consent Agreement and granted the registrations to UTN.
Chase, 333 F. Supp. 2d at 246.



  12
     UTN has also filed a separate trademark infringement and
unfair competition complaint against Chase in district court in
New York. That action was enjoined and later transferred to the
District Court for the District of Delaware.

                               13
       UTN also submitted a one-inch thick exhibit of
numerous other “freedom” marks in response to concerns the
USPTO had with additional “freedom mark” registrations that
UTN applied for. UTN argued that these marks, together with
third-party marks cited by the USPTO, were “all existing
together in the marketplace” and UTN therefore argued that “no
one has the exclusive right to use the word ‘FREEDOM’
alone.” Id. at 246, n.15. In response to concerns that UTN’s
FREEDOM CARD would be confused with Parkers “Fuel
Freedom Card,” UTN also represented to the USPTO that,
because of such frequent third-party use, the addition of the
descriptive term “fuel” “when used in conjunction with the
FREEDOM CARD mark, eliminated concern that the marks
FREEDOM CARD and FUEL FREEDOM CARD would be
confusingly similar.” Id. at 246.

        Chase also provided the district court with substantial
direct evidence of widespread, third-party use of the term
“freedom.” According to this undisputed evidence, there are
approximately 20 MasterCard and VISA “freedom” credit cards
and roughly 50 MasterCard and VISA “freedom” debit and
ATM cards. There are also about 25 banks using “freedom” as
part of their name or in connection with a banking product, as
well as about 200 other financial companies that use “freedom”
as part of their name.

       UTN claims that CompuCredit approached it in October
2002, with an offer for the rights to the FREEDOM CARD
name, and that CompuCredit’s offer was then valued at $15
million. UTN maintains that the parties were close to resolving
a few remaining issues and expected to execute the agreements

                              14
at the end of January 2003. However, according to UTN, the
negotiations between it and CompuCredit were interrupted by
the introduction of the CHASE FREEDOM card on January 27,
2003. UTN contends that after the introduction of the CHASE
FREEDOM card, CompuCredit believed that consumer
confusion would depress the value of the FREEDOM CARD
mark. Therefore, CompuCredit allegedly refused to proceed
with UTN because it did not have the resources to compete with
Chase. Thus, in UTN’s view, given the strength of the
“CHASE” mark, and Chase’s resources, the introduction of the
CHASE FREEDOM card effectively stifled any effort to close
the transaction with CompuCredit or to market UTN’s product
with any other institution that had expressed interest.13

        According to UTN, Chase converted 1,506,070 Shell


   13
      In disputing that the CHASE FREEDOM card destroyed
UTN’s opportunity to consummate the deal with CompuCredit,
Chase relies upon deposition testimony from Dennis James of
CompuCredit. He testified that after Chase’s Wall Street
Journal advertisement for CHASE FREEDOM, CompuCredit
was still prepared to close the transaction on the same basis as
before. Chase contends that UTN admitted that the real reason
that the CompuCredit deal did not go forward was because
UTN wanted too much money from CompuCredit. Buford
testified that UTN turned down CompuCredit’s offer because
UTN wanted an additional $5 million, and Chase correctly
argues that UTN cannot so easily distance itself from Buford’s
deposition despite its rather intense efforts to do so. See Fed. R.
Civ. P. 30(b)(6).

                                15
accounts to their new CHASE FREEDOM card. In addition,
UTN claims that, although Chase launched a new CHASE
PERFECTCARD in May 2003, purportedly to replace the
Freedom card, Chase did not remove existing CHASE
FREEDOM cards from the market.

               IV. GENERAL PRINCIPLES.

        “The Lanham Act defines trademark infringement as use
of a mark so similar to that of a prior user as to be ‘likely to
cause confusion, or to cause mistake, or to deceive.’” Kos
Pharmaceuticals, Inc., v. Andrx Corp., 369 F. 3d. 700, 711 (3d
Cir., 2004) (quoting 15 U.S.C. § 1114(1)). Thus, “[t]he law of
trademark protects trademark owners in the exclusive use of
their marks when use by another would be likely to cause
confusion.” Fisons Horticulture, Inc. v. Vigoro Industries, Inc.,
30 F.3d 466, 472 (3d Cir. 1994) (citations omitted). Although
Fisons Horticulture involved trademarks, not . . . unfair
competition, [as UTN alleges as part of its counterclaim here,]
the analysis is the same. See A & H Sportswear, Inc. v.
Victoria’s Secret Stores, Inc., 166 F.3d 197, 202 (3d Cir. 1999)
(“A&H III”). “To prove either form of Lanham Act violation,
a plaintiff must show that: (1) the mark is valid and legally
protectable; (2) the mark is owned by the plaintiff; and (3) the
defendant’s use of the mark is likely to create confusion
concerning the origin of the goods or services.”14 Id. Because


    14
      Of course, the plaintiff bears the burden of proof. See
American Home Prods. Corp. v. Barr Labs, Inc., 834 F.2d 368,
371 (3d Cir. 1987). UTN was the named defendant in Chase’s

                               16
it is undisputed that UTN owns FREEDOM CARD, a valid and
legally protectable mark, “the questions in this case involve the
delineation and application of standards for the evaluation of
likelihood of confusion.” A & H Sportswear, Inc. v. Victoria’s
Secret Stores, Inc., 237 F.3d 198, 211 (3d Cir. 2000) (“A&H
V”).

       “A likelihood of confusion exists when consumers
viewing the mark would probably assume that the product or
service it represents is associated with the source of a different
product or service identified by a similar mark.” Id. (citation
and internal quotations omitted). The relevant inquiry is not
whether consumer confusion is a possibility, but whether
confusion is likely. A&H V, 237 F.3d at 198. Once a trademark
owner demonstrates likelihood of confusion, it is entitled to
injunctive relief. Interpace Corp. v. Lapp, Inc. 721 F.2d 460,
462 (3d Cir. 1983) (citing 15 U.S.C. § 1114(1)).

       There are two types of “likelihood of confusion” claims
– “direct confusion” claims and “reverse confusion” claims. As
we noted at the outset, we are primarily concerned with a claim
of reverse confusion because that is how UTN argues this
appeal. Although direct confusion and reverse confusion have
developed as two separate doctrines, they are not as analytically
distinct as may, at first blush, appear. “Isolated instances of


declaratory action. However, because UTN filed counterclaims
and third-party claims against Chase for trademark infringement
and unfair competition, UTN is treated as the plaintiff in this
appeal of the district court’s dismissal of those claims.

                               17
direct confusion may occur in a reverse confusion case, and
vice-versa.” Checkpoint Systems, Inc., v. Check Point Software,
269 F.3d 270, 305 (3d Cir. 2001) (citation omitted).
Accordingly, although we are resolving UTN’s claim of reverse
confusion, we can not ignore the doctrine of direct confusion.

                     A. Direct Confusion

        The essence of a direct confusion claim is that a junior
user of a mark attempts to free-ride on the reputation and
goodwill of the senior user by adopting a similar or identical
mark. A&H V, 237 F.3d at 228; see also Fisons Horticulture,
30 F.3d at 474 (In a direct confusion claim, “the new or junior
user of the mark will use to its advantage the reputation and
goodwill of the senior user by adopting a similar or identical
mark.”); Checkpoint Systems, 269 F.3d at 301. Thus, “the
consuming public may assume that the established, senior user
is the source of the junior user’s goods.” Id.

       In deciding whether similar marks create a likelihood of
confusion, we have adopted a non-exhaustive test using 10
factors that have come to be known as the “Lapp factors,”15 for
determining the likelihood of confusion between two marks
where direct confusion is alleged. Pursuant to that analysis, we
examine:



    15
      The factors are named for the case in which they were
developed, viz., Interpace Corp. v. Lapp, Inc., 721 F.2d 460 (3d
Cir. 1983).

                              18
      (1) the degree of similarity between the owner’s
      mark and the alleged infringing mark;
      (2) the strength of the owner’s mark;
      (3) the price of the goods and other factors
      indicative of the care and attention expected of
      consumers when making a purchase;
      (4) the length of time the defendant has used the
      mark without evidence of actual confusion
      arising;
      (5) the intent of the defendant in adopting the
      mark;
      (6) the evidence of actual confusion;
      (7) whether the goods, though not competing, are
      marketed through the same channels of trade and
      advertised through the same media;
      (8) the extent to which the targets of the parties’
      sales efforts are the same;
      (9) the relationship of the goods in the minds of
      consumers because of the similarity of function;
      (10) other factors suggesting that the consuming
      public might expect the prior owner to
      manufacture a product in the defendant’s market,
      or that he is likely to expand into that market.

Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983)
(citation omitted). The Lapp factors were originally used to
determine likelihood of confusion for non-competing goods.
Id. at 462. Where goods that were the subject of a trademark
infringement action directly competed with each other, we
originally held that a “court need rarely look beyond the mark
itself” to determine likelihood of confusion. Id. However, we

                              19
have since held that the Lapp factors should be used for both
competing and non-competing goods. A&H V, 237 F.3d at 213.
In either event, “the Lapp test is a qualitative inquiry. Not all
factors will be relevant in all cases; further, the different factors
may properly be accorded different weights depending on the
particular factual setting. A district court should utilize the
factors that seem appropriate to a given situation.” Id. at 215.16

                     B. Reverse Confusion

      We first recognized Lanhan Act Section 43(a) reverse
confusion claims in Fisons Horticulture. “Reverse confusion
occurs when a larger, more powerful company uses the
trademark of a smaller, less powerful senior owner and thereby
causes likely confusion as to the source of the senior user’s
goods or services.” Fisons Horticulture, 30 F.3d at 474. Thus,
the “junior” user is junior in time but senior in market
dominance or size.

         In reverse confusion, the junior user saturates the
         market with a similar trademark and overwhelms
         the senior user. The public comes to assume the
         senior user’s products are really the junior user’s
         or that the former has become somehow
         connected to the latter. The result is that the


    16
       We have instructed that, if a district court decides that
certain of the Lapp factors do not advance its analysis, it should
explain the reason for not using those factors in order to
facilitate our review. A&H V, 237 F.3d at 215 n.8.

                                 20
       senior user loses the value of the trademark – its
       product identity, corporate identity, control over
       its goodwill and reputation, and ability to move
       into new markets.

       Without the recognition of reverse confusion,
       smaller senior users would have little protection
       against larger, more powerful companies who
       want to use identical or confusingly similar
       trademarks. The logical consequence of failing to
       recognize reverse confusion would be the
       immunization from unfair competition liability of
       a company with a well established trade name and
       with the economic power to advertise extensively
       for a product name taken from a competitor. If
       the law is to limit recovery to passing off, anyone
       with adequate size and resources can adopt any
       trademark and develop a new meaning for the
       trademark as identification of the second user’s
       products.

Fison Horticulture, at 474-75 (citations and internal brackets
omitted).17


  17
   Although we have recognized reverse confusion claims, we
have, nonetheless, noted the problems inherent in such claims.

       The chief danger inherent in recognizing reverse
       confusion claims is that innovative junior users,
       who have invested heavily in promoting a

                               21
        Thus, “the doctrine of reverse confusion is designed to
prevent . . . a larger, more powerful company usurping the
business identity of a smaller senior user.” Commerce National
Ins., v. Commerce Insurance Agency, Inc., 214 F.3d 432, 445
(3d Cir. 2000).

        As noted above, UTN presents its Lanham Act Section
43(a) unfair competition claim as a reverse confusion claim. In
A&H V, we held that in a typical case alleging reverse
confusion, as in a case of direct confusion, a court should apply
the Lapp factors in assessing likelihood of confusion. 237 F.3d
at 208. However, economic reality and common sense require
that some of the Lapp factors be analyzed differently when
reverse discrimination is at issue. Id. at 236. Thus, the strength
of the parties’ marks (Lapp factor (2)), the intent in adopting the
marks (factor (5)), and the evidence of actual confusion (factor
(6)), are analyzed differently from the method employed in a
typical direct confusion case.18 id. at 236. With these


    particular mark, will suddenly find their use of the
    mark blocked by plaintiffs who have not invested
    in, or promoted, their own marks. Further, an
    overly-vigorous use of the doctrine of reverse
    confusion could potentially inhibit larger
    companies with established marks from
    expanding their product lines.
A&H V, 237 F.3d at 228 (citations omitted).
  18
     Application of Lapp factors (3), (7), (8) and (9) is typically
the same in both direct confusion and reverse confusion cases.

                                22
parameters in mind, we turn to the instant dispute.

                  (I). Strength of the mark.

       In evaluating the strength of the mark under Lapp, we
examine: (1) the mark’s distinctiveness or conceptual strength
(the inherent features of the mark) and (2) its commercial
strength (factual evidence of marketplace recognition). A&H V,
237 F.3d at 221. The inquiry into distinctiveness or conceptual
strength is the same whether plaintiff is alleging direct or
reverse confusion. Id. at 231-32 (“When it comes to conceptual
strength . . . we believe that, just as in direct confusion cases, a
strong mark should weigh in favor of a senior user.”). The
conceptual strength of a mark is measured by classifying the
mark in one of four categories ranging from the strongest to the
weakest: “(1) arbitrary or fanciful (such as “KODAK”); (2)
suggestive (such as “COPPERTONE”); (3) descriptive (such as
“SECURITY CENTER”); and (4) generic (such as “DIET
CHOCOLATE FUDGE SODA”).” Id. at 221. Stronger marks
receive greater protection. Id. at 222.

       In examining a mark’s commercial strength, we examine
marketplace recognition. Id. at 221. “[I]n a reverse confusion
claim, a court should analyze the ‘commercial strength’ factor
in terms of (1) the commercial strength of the junior user as


A&H V, 237 F.3d at 236. In addition, absent the presence of
housemarks and disclaimers, the similarity of the marks (factor
(1)) should generally be examined in a similar fashion in both
direct and reverse confusion cases. Id.

                                23
compared to the senior user; and (2) any advertising or
marketing campaign by the junior user that has resulted in a
saturation in the public awareness of the junior user’s mark.”
Id. at 231. Our focus in resolving reverse confusion should be
the commercial impact of the stronger junior user’s mark on the
weaker mark of the senior but less dominant user.

             (ii). Intent in Adopting the Mark.

       In a direct confusion case, the defendant’s intent to
confuse or deceive consumers can be very probative of the
likelihood of confusion. Id. at 232. Nevertheless, a defendant’s
intent to confuse in a reverse confusion case can also be
relevant to the likelihood of confusion. Id. However, the tenor
of the evidence of intent will differ. In a true case of direct
confusion, there is an intent to palm-off or ride on the goodwill
of the senior user’s mark. Id. at 225-26. The offender in a
reverse confusion case will typically exploit confusion to push
the senior user out of the market. Id. at 232.

            (iii). Evidence of Actual Confusion.

        “[O]ne might assume evidence that the public thought
that the senior user was the origin of the junior user’s products
would support a direct confusion claim while evidence that the
public thought that the junior user was the source of the senior
user’s product would support a reverse confusion claim.”
Checkpoint Systems, 269 F.3d at 305 n.34 (citing A&H V, 237
F.3d at 233). However, as noted earlier, because the
“manifestation of consumer confusion as ‘direct’ or ‘reverse’
may merely be a function of the context in which the consumer

                               24
first encountered the mark . . . [i]solated instances of ‘direct’
confusion may occur in a reverse confusion case, and vice-
versa.” A&H V, 237 F.3d at 233. Therefore, there is no strict
prohibition against using “direct” confusion evidence in a
“reverse” confusion case, or vice-versa. Id.

       (iv). Summary of test for reverse confusion.

        In A &H V, we summarized the test for reverse confusion
as follows:

       [I]n the typical case in which there is a claim of
       reverse confusion, a court should examine the
       following factors [in determining] whether or not
       there is a likelihood of confusion:

       (1) the degree of similarity between the owner’s
       mark and the alleged infringing mark;
       (2) the strength of the two marks, weighing both
       a commercially strong junior user’s mark and a
       conceptually strong senior user’s mark in the
       senior user’s favor;
       (3) the price of the goods and other factors
       indicative of the care and attention expected of
       consumers when making a purchase;
       (4) the length of time the defendant has used the
       mark without evidence of actual confusion
       arising;
       (5) the intent of the defendant in adopting the
       mark;
       (6) the evidence of actual confusion;

                               25
       (7) whether the goods, competing or not
       competing, are marketed through the same
       channels of trade and advertised through the same
       media;
       (8) the extent to which the targets of the parties’
       sales efforts are the same;
       (9) the relationship of the goods in the minds of
       consumers, whether because of the near-identity
       of the products, the similarity of function, or
       other factors;
       (10) other facts suggesting that the consuming
       public might expect the larger, more powerful
       company to manufacture both products, or expect
       the larger company to manufacture a product in
       the plaintiff’s market, or expect that the larger
       company is likely to expand into the plaintiff’s
       market.

237 F.3d at 234.

       Here again, “no one factor is dispositive.” The weight
given each factor can vary with the circumstances of a particular
case. Id. (citation and internal quotations omitted).

                      V. DISCUSSION

        UTN’s underlying contention before us is that the district
court did not properly apply the Lapp factors in the context of
its reverse confusion claim. It is true that the district court’s
opinion does not contain the phase “reverse confusion,” and the
district court only cites the Lapp factors as they are applied to

                               26
direct confusion claims. 333 F. Supp. 2d at 245. In UTN’s
view, this means that we must reverse and remand for a correct
analysis of the Lapp factors to UTN’s claim.

     At first blush, there is some support for UTN’s position.
In A&H V, we said:

      Because the District Court failed to undertake the
      Lapp analysis with respect to A & H
      Sportswear’s reverse confusion claim, we must
      vacate the judgment and remand to the District
      Court for a redetermination of those factors that
      receive different treatment under direct and
      reverse confusion theories, and for a reweighing
      of all of the factors once those redeterminations
      have been made.

237 F.3d at 236. However, a closer reading of A&H V
establishes that we did not create a bright-line rule requiring
reversal and remand whenever a district court fails to properly
apply the Lapp factors. Rather, we there explained:

      The District Court interpreted our precedents to
      require a two-step inquiry, engaging in the Lapp
      factors only after an initial assessment that the
      disparity in commercial strength reached a high
      threshold. Because the degree of commercial
      disparity that the court believed was required was
      not met, the court did not even examine whether
      there existed a likelihood of confusion.


                              27
Id. at 208. Indeed, we noted in A&H V that if the record
supported a finding that the plaintiff could not succeed on a
reverse confusion claim as a matter of law, we would “be bound
to explicate our reasoning and affirm the judgment of the
district court.” Id. at 236. Moreover, it is a long-established
principle of appellate review, that “we may affirm a correct
decision of the district court on grounds other than those relied
upon by the district court.” Central Pennsylvania Teamsters
Pension Fund v. McCormick Dray Line, Inc., 85 F.3d 1098,
1107 (3d Cir. 1996). Thus, the district court’s purported failure
to apply the Lapp factors does not necessarily mandate reversal
and remand.

        Moreover, we have serious doubts that UTN’s claim is
really a claim of reverse confusion to begin with. The essence
of reverse confusion is that the more powerful junior user
saturates the market with a similar trademark and overwhelms
the smaller senior user. Fisons, 30 F.3d at 474. The “relatively
large advertising and promotion of the junior user . . . is the
hallmark of a reverse confusion case.” A&H V, 237 F.3d at 231
(quoting 3 J. Thomas McCarthy, MCCARTHY ON TRADEMARKS
AND UNFAIR COMPETITION § 23-10, at 23-37. “The question . .
. is whether consumers doing business with the senior user
might mistakenly believe that they are dealing with the junior
user.” Checkpoint Systems, 269 F.3d, at 303 (internal quotation
marks omitted).

      Here, Chase did not overwhelm UTN’s FREEDOM
CARD at all. It is undisputed that CompuCredit FREEDOM
CARD was not promoted or marketed after December 2001.
Thus, FREEDOM CARD was out of the market for more than

                               28
a year before Chase launched the CHASE FREEDOM card on
January 27, 2003. We are therefore hard-pressed to understand
how CHASE FREEDOM card could have overwhelmed UTN’s
FREEDOM CARD when FREEDOM CARD was not even
participating in the market when CHASE FREEDOM was
launched. Moreover, any claim that Chase heavily promoted
and advertised CHASE FREEDOM card and thereby
overwhelmed UTN’s FREEDOM CARD via marketing and
promotion would be fanciful at best. On the contrary, Chase
published a single advertisement for CHASE FREEDOM in a
single publication on a single day. Chase thereafter stopped its
marketing and advertising efforts once it was contacted by
Buford of UTN. UTN attempts to extend Chase’s marketing
efforts by pointing to the aforementioned news article in
Newsweek magazine that reported about the CHASE
FREEDOM card. However, even if Chase is somehow deemed
responsible for “planting” and/or exploiting that article, it
would still only amount to an additional one-paragraph news
item. Even when combined with the single advertisement in the
Wall Street Journal, that would hardly support a claim that
Chase created confusion in the market by overwhelming
FREEDOM CARD, the senior mark.

        Nevertheless, “if we were to create a rigid division
between direct and reverse confusion evidence, we would run
the risk of denying recovery to meritorious plaintiffs.” A&H V,
237 F.3d at 233 (internal quotation marks omitted).
Accordingly, despite real doubts about whether UTN’s claim
can properly be characterized as a claim of reverse confusion,
we must nevertheless determine whether the district court
properly applied the Lapp factors to it.

                              29
        UTN contends that the district court failed to properly
analyze the similarity of the marks; the strength of the marks;
and any facts indicating that the parties will expand into each
other’s markets. UTN also contends that the district court erred
in analyzing some of the remaining Lapp factors including:
consumer care when making a purchase; actual confusion; and
intent. We will therefore address each of those claims of error.

                   A. Similarity of the marks.

        As we noted above, inquiry into similarity of the marks
is the same in cases of reverse confusion and direct confusion.
Here, Chase’s FREEDOM card also includes the housemark
“CHASE.”19 Chase claims that any possible potential for
confusion with UTN was substantially reduced because
“CHASE” appears together with “FREEDOM” on the face of
the card, and the district court agreed.

         The district court explained:
         Given that Chase is a well-known provider of
         financial services, I agree that the inclusion of the
         CHASE housemark with FREEDOM (or
         FREEDOM card), in connection with credit cards
         and credit card services is enough to lessen any
         likelihood of confusion between the two marks
         and render the CHASE FREEDOM and


    19
    A “housemark” is a company’s corporate name. Eric J.
Lubochinski, Hegel’s Secret: Personality and the Housemark
Cases, 52 Emory L.J. 489, 490 (2003).

                                  30
       FREEDOM CARD marks dissimilar.

333 F. Supp. 2d at 246.

       The district court therefore concluded that the presence
of Chase’s housemark mitigated any potential for market
confusion. However, UTN correctly argues that the junior
user’s housemark can aggravate reverse confusion by
reinforcing the association of the trademark exclusively with the
junior user to the detriment of the smaller senior user. A&H III,
166 F.3d. at 230. UTN believes that the district court ignored
the fact that Chase’s housemark reinforced consumers’
association of “Freedom” exclusively with Chase, and therefore
increased the likelihood of reverse confusion. We disagree.

        The district court’s holding was based partly on UTN’s
own admissions about the widespread commercial use of the
word “freedom.” We have already explained that UTN made
certain representations in connection with its two registrations
for FREEDOM CARD. We have noted that the USPTO
initially rejected UTN’s applications because of the likelihood
of confusion with Parker Oil’s prior registration for its “Fuel
Freedom Card,” and UTN responded by entering into a Consent
Agreement with Parker Oil in which UTN and Parker Oil
agreed that there was no likelihood of confusion between
UTN’s FREEDOM CARD and Parker’s Fuel Freedom Card.

       As we have also noted above, UTN overcame objections
to additional “freedom” marks it applied for by submitting a
one-inch thick exhibit of numerous other “freedom” marks to
the USPTO. UTN argued that those marks, together with third-

                               31
party marks cited by the USPTO, were “all existing together in
the marketplace” and as a result, “no one has the exclusive right
to use the word ‘FREEDOM’ alone.” UTN also represented
that, because of such third-party use, the addition of the term
“fuel” “creates a significantly different commercial impression
than the cited registration [sic] and applications, and thus is not
so similar as to preclude its registration.”

       The district court viewed UTN’s representations to the
USPTO through the lens of judicial estoppel.20 Chase, 333 F.
Supp. 2d at 246. Whether we view the district court’s treatment
of UTN’s prior representations about the commercial
availability of marks containing the word “freedom” as judicial
estoppel, an admission, waiver, or simply hoisting UTN by its
own petard, we agree with the district court’s conclusion about
the commercial impact of “freedom” in the two marks at issue
here. Thus, UTN’s own statements and actions, together with
Chase’s undisputed evidence of the widespread and common
use of “freedom,” undermine UTN’s belated attempt to
establish likelihood of confusion from the juxtaposition of
“FREEDOM” and Chase’s housemark. See SquirtCo v. Tomy
Corp., 697 F.2d 1038, 1043 (Fed. Cir. 1983).

                  B. Strength of the marks.

       In analyzing the strength of UTN’s mark, the district
court wrote:


   20
    See In re Chambers Development Co., 148 F.3d 214, 229
(3d Cir.1998), for a discussion of judicial estoppel.

                                32
       UTN has not come forward with any evidence of
       the commercial strength of the FREEDOM
       CARD mark, i.e., the amount of money that it
       spent on advertising, whether it took any steps to
       increase public recognition of the FREEDOM
       CARD mark, and whether the public does, in
       fact, recognize the FREEDOM CARD mark. In
       fact, the evidence strongly indicates that there is
       no commercial strength to UTN’s mark. At its
       peak, UTN had 28,193 cardholders. That was
       three years ago. UTN only issued cards for one
       year. Given these facts, it is hardly surprising that
       UTN has chosen to offer no evidence at all of
       commercial strength. There is none, and this
       factor weighs against a finding of likelihood of
       confusion.

333 F. Supp. 2d at 248. The district court also found that the
conceptual strength of UTN’s mark was weak, Chase, 333 F.
Supp. 2d at 248, and UTN does not dispute that finding. Rather,
UTN argues that the district court erred in focusing only on the
commercial weakness of UTN’s mark. We agree that the
weakness of the senior user’s mark can, in theory, advance a
claim of reverse confusion rather than undermine it. The “the
lack of commercial strength of the smaller senior user’s mark is
to be given less weight in the analysis because it is the strength
of the larger, junior user’s mark which results in reverse
confusion.” A&H V, 237 F.3d at 231 (citation omitted).
Nonetheless, “analysis of the strength of the senior user’s mark
is relevant” in a reverse confusion case. Checkpoint Systems,
269 F.3d at 303.

                                33
       Here, UTN failed to produce any evidence of the
commercial strength of its mark and tries to explain that failure
by claiming that “it was the strength of the mark of the
corporate giant, Chase, that essentially drove [UTN] from the
marketplace.” Appellants’ Br. at 30. However, that is a
frivolous rejoinder. As we have already discussed, Chase did
not drive UTN out of the marketplace in the first place. Rather,
UTN stopped marketing and issuing FREEDOM CARD more
than a year before CHASE FREEDOM card was launched.

              C. Sophistication of consumers.21

        The district court concluded that consumers “do exercise
considerable care in selecting who will carry their debt [, and
held that ] [t]his factor therefore also weighs against a finding
of likelihood of confusion.” 333 F. Supp. 2d at 249. In doing
so, the court relied in part upon First Nat’l Bank in Sioux Falls
v. First Nat’l Bank South Dakota, 153 F.3d 885, 888-89 (8th
Cir. 1998). There, the court explained that consumers generally
exercise a high degree of care in choosing banking services.
They are therefore more likely to notice what, in other contexts,
may be relatively minor differences in names. This would
undermine UTN’s likelihood of confusion over these marks.



   21
     This issue was discussed in the district court’s analysis of
Lapp factor (3), i.e., the price of the goods and other factors
indicative of the care and attention expected of consumers when
making a purchase. This factor is the same for both direct and
reverse confusion.

                               34
        The district court also relied upon the testimony of
Chase’s expert, Pierce Sioussat.22 He stated that consumers “do
look to a number of factors when considering whether to apply
for and carry a credit card, such as interest rate, rewards offered,
affinity relationship, and introductory offers.” Id. at 248.

       UTN believes this was error because Sioussat’s
testimony “had no application in the sub-prime market targeted
by [UTN].” Appellants’ Br. at 30. Admittedly, we have
explained that “[w]here the buyer class is mixed, the standard
of care to be exercised by the reasonably prudent purchaser will
be equal to that of the least sophisticated consumer in the class.”
Ford Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277,
293 (3d Cir. 1991). However, UTN never made this argument
in the district court. Rather, UTN only argued that Sioussat’s
testimony was “absurd and unsupportable” and asserted,
without offering any substantive evidence, that while consumers
exercise care in choosing their bank, they do not necessarily
exercise the same care in choosing a credit card. Chase, 333 F.
Supp. 2d at 248-49. Accordingly, UTN cannot now argue that
the district court erred in relying upon the expert’s testimony
about the amount of care exercised in the relevant market. See,
e.g., Bailey v. United Airlines, 279 F.3d 194, 204 (3d Cir.
2002).


     22
        Sioussat was offered as an expert in the credit card
industry. UTN filed a Daubert motion to exclude his testimony.
See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
580 (1993). However, the district court denied that motion, 333
F. Supp. 2d at 249 n.17, and UTN is not challenging that ruling.

                                35
                     D. Actual confusion.

       The district court concluded that “UTN [did] not come
forward with any competent evidence of actual confusion.
Thus, this factor also weighs significantly against a finding of
likelihood of confusion.”23 333 F. Supp. 2d at 249-50. UTN
argues that this was error because the district court (1) ignored
the length of time that it had used the mark and (2) ignored
anecdotal evidence of actual confusion.

       UTN faults the district court’s concern over the absence
of evidence of actual confusion, reminding us that it was driven
from the marketplace. However, that is yet another frivolous
rejoinder since UTN stopped marketing the FREEDOM CARD
approximately one year before Chase introduced its CHASE
FREEDOM card. Chase’s short-lived launch of its card, and its
willingness to stop marketing CHASE FREEDOM immediately
after being contacted by UTN, is uncontradicted. Moreover,
even if we credit UTN’s claim that CompuCredit refused to
continue its relationship with UTN because of Chase’s CHASE
FREEDOM card, UTN could still not prevail on this record
because UTN and Chase were in different markets. The district
court found that “the undisputed evidence in this case indicates
that [CHASE FREEDOM] and [FREEDOM CARD] are
targeted at different groups of consumers. . . . Mr. Buford,
UTN’s CEO, made the distinction saying, ‘Chase is targeting
the high-income level and FreedomCard is targeting the middle-


    23
      The district court considered the fourth and sixth Lapp
factors together in its actual confusion inquiry.

                               36
to-low income level.’” Chase Manhattan Bank, 333 F. Supp. 2d
at 250. Absent more than appears here, this seriously
undermines UTN’s claim of likelihood of confusion.

        Nevertheless, UTN attempts to argue the significance of
anecdotal evidence of actual confusion that it introduced. UTN
claims that the district court ignored evidence that UTN’s
accountant, Richard Moon, believed that CHASE FREEDOM
was a joint venture between UTN and Chase. However, the
district court did not credit that evidence because it was based
on Buford’s deposition testimony rather than anything Moon
testified to. UTN had every opportunity to explore that issue
during Moon’s own deposition but refrained from doing so.
UTN now invites us to ignore Moon’s silence and focus on
Buford’s uncorroborated and self serving proclamations. That
is an invitation we must decline.

       Moreover, the district court correctly concluded that
Moon’s purported belief was not sufficient to establish actual
confusion even if credited. 333 F. Supp. 2d at 249 n.18.
(“Even accepting as true that Mr. Moon was confused, such de
minimis evidence of actual confusion does not establish a
genuine issue of material fact on the likelihood of confusion
issue and is insufficient to prevent dismissal on summary
judgment.”) (citing Universal Money Ctrs., Inc. v. Am. Tel. &
Tel. Co., 22 F.3d 1527, 1535 (10th Cir. 1994)).

      UTN correctly reminds us that anecdotal evidence can be
both relevant and probative, and argues the district court
improperly dismissed the anecdotal evidence of Moon’s
confusion. Appellants’ Br. at 34 (“in addressing the actual

                              37
confusion factor, courts must often consider anecdotal
evidence.”). That argument ignores the fact that, unlike the
cases UTN relies upon, the anecdotal evidence here was de
minimis just as the district court concluded. Accordingly, we do
not think the district court erred in analyzing the evidence of
actual confusion on this record.

 E. Chase’s Intent in Adopting the CHASE FREEDOM
                        Mark.

        The district stated that “UTN has not set forth any
competent evidence to prove that Chase adopted the CHASE
FREEDOM mark with the intent to confuse consumers.” Chase
Manhattan Bank, 333 F. Supp. 2d at 350. The court concluded
that the evidence here establishes that:

       Chase created the CHASE FREEDOM mark by
       hiring outside consultants, conducting qualitative
       research that included focus groups, and forming
       a team from its internal staff to facilitate the
       development of a new credit card product. On the
       basis of that research, Chase adopted the CHASE
       FREEDOM credit card to replace the CHASE
       Shell Mastercard.

Id. The court reasoned that this factor weighs against a finding
of likelihood of confusion. Id. UTN argues that this is error
because the district court “failed to address a significant volume
of evidence establishing [Chase] had full knowledge of the
“FREEDOM CARD” mark.” Appellants’ Br. at 36.


                               38
       UTN attempts to advance that contention by correctly
noting that the intent inquiry in a reverse confusion case differs
from an intent inquiry in a direct confusion case. However,
UTN’s argument is misleading. As noted earlier, intent to
confuse is relevant to both reverse confusion and direct
confusion. A&H V, 237 F.3d at 232. The difference is that the
tenor of the intent to confuse evidence changes from the
deliberate intent to palm off or exploit the goodwill of the senior
user’s mark (deliberate confusion), id. at 225-26, to the
deliberate intent to push the senior user out of the market
(reverse confusion). Id. at 232.

       There is no evidence here from which a reasonable fact
finder could conclude that Chase intended to push UTN out of
the market, and this is true even if we assume arguendo that
Chase was in UTN’s market. To reiterate, Chase was in the
prime market, and UTN was in the sub-prime market (or the
sub-sub-prime market as Chase suggests).              UTN never
attempted to promote its card in the credit market for Chase’s
card, and vice-versa.24 Moreover, as we have repeatedly noted,
UTN was not issuing or marketing its FREEDOM CARD in any
market when Chase started its CHASE FREEDOM card, and
Chase stopped marketing its card when UTN objected. Thus,
even if we credit UTN’s claim that Chase was considering
entering UTN’s market and improperly relied on UTN’s mark
in order to enter it (a true case of reverse confusion), the record


  24
    Indeed, given the 140% annual charges in interest and fees,
UTN’s card would have been a “hard sell” to credit-worthy
consumers.

                                39
would still not allow a reasonable fact finder to conclude that
Chase’s mark created a likelihood of confusion.

      In responding to the district court’s analysis of intent,
UTN first argues that the district court ignored the fact that
Chase conducted a trademark search, learned of UTN’s
FREEDOM CARD mark and nevertheless adopted the CHASE
FREEDOM mark. UTN claims that this demonstrates that
Chase used the word “freedom” with the intention of confusing
consumers.25

        We disagree, and again note UTN’s own USPTO filings
about the prevalence of “freedom” in the marketplace. Given
UTN’s own submissions to the USPTO we agree that the
district court correctly concluded that Chase’s use of the word
does not constitute evidence of an intent to deceive.26


  25
     Chase claimed attorney-client privilege with respect to the
trademark search. UTN suggests that Chase’s assertion of the
privilege constitutes evidence of Chase’s bad faith. However,
we agree that it is improper to draw an inference of bad faith
from the assertion of the attorney-client privilege. See Chase’s
Br. at 44 (citing Astra Pharm. Prods., Inc. v. Beckman
Instruments, Inc., 220 U.S.P.Q. 609, 612 (D. Mass.), aff’d 718
F.2d 1201 (1st Cir. 1983).
   26
      We do not rule out the possibility that, in an appropriate
case, a party could establish that a competitor’s use of a
common word could constitute evidence of an intent to deceive.
However, this record does not support any such inference with

                              40
       We are similarly unimpressed by evidence that Chase
conducted a trademark search and presumably learned of UTN’s
registration of FREEDOM CARD. Absent UTN’s own filings
with the USPTO, it might be possible to claim that Chase’s
search and subsequent use of “FREEDOM” constituted
carelessness at best. However, we have not yet adopted that
standard for such an analysis, and we are certainly not willing
to adopt it on this record. See A&H V, 237 F.3d at 232-33
(“Although we recognize that our opinion in Fisons perhaps
implied that mere carelessness, as opposed to deliberate intent
to confuse, would weigh in a plaintiff’s favor in a reverse
confusion case, we are reluctant to adopt such an interpretation,
as it would be manifestly out of step with our prior holdings
regarding the relevance of ‘intent’ in trademark infringement
claims.”). However, given the undisputed evidence of how
common the use of “freedom” has become in the relevant
marketplace, even that requires an analytical stretch beyond the
reach of a reasonable fact finder.

       UTN next argues that Chase intentionally adopted the
word “freedom” to confuse consumers because Chase knew in
1999 that UTN had FREEDOM CARD. That argument is
rooted in the discussions that occurred after UTN approached
Chase to explore possible affiliation with UTN’s FREEDOM
CARD. UTN alleges that at a meeting, it gave Chase graphic
copies of a credit card that is virtually identical to the CHASE
FREEDOM card. Although UTN makes this allegation, at his
deposition, Buford could not say when the presentation was


regard to Chase’s use of “freedom.”

                               41
made. Moreover, it is undisputed that no such card exists in
Chase’s files. Finally, as we noted above, even if UTN could
establish when this happened, it would still not establish the
likelihood of confusion that UTN had to establish to prevail on
its counterclaim.

       UTN suggests that intent to confuse can be inferred
because certain Chase employees were involved in both the
1999 discussions between UTN and Chase and a subsequent
project that Chase undertook in 2002-2003 called “Project
Poet” that led to the development of the CHASE FREEDOM
card. According to UTN, an employee named “Dzierzynksi”
told other Chase employees in 1999 that they needed to
followup on a Chase-FREEDOM CARD joint venture and that
she was a member of the Project Poet team. UTN cites to e-
mails to support that connection. However, Dzierzynski was
not the author of those e-mails; she was only a recipient.
Moreover, Dzierzynski was not a member of Project Poet and
had no involvement in the development of CHASE
FREEDOM.

        UTN further alleges that a person named “Dias,” a Chase
executive who was present at the 1999 meetings, briefed her
supervisor, “Johri,” on all of her projects and that Johri was
later a member of Project Poet. However, Dias left Chase long
before Chase began Project Poet and Johri did not work for
Chase until September 1, 1999, after all discussions with UTN
ended. Chase concedes that Johri met with Dias for 15-20
minutes when he first joined Chase; however, UTN produced
no evidence that Dias told Johri about the UTN-Chase
discussions. The district court realized that UTN needed more

                              42
than these largely unsupported conclusions to survive Chase’s
motion for summary judgment.

       Moreover, these meetings and discussions still cannot
overcome the other problems with UTN’s proof detailed above.
We therefore find UTN’s argument regarding the 1999
discussions between UTN and Chase unpersuasive.

                               F. Other factors.27

       WehavenotedthatLappfactor(10)isnecessarilytransformedinthereverseconfusioncontexttoan
examination of other facts suggesting that the consuming public
might expect the larger, more powerful company to
manufacture both products, or expect the larger company to
manufacture a product in the plaintiff’s market, or expect that
the larger company is likely to expand into the plaintiff’s
market.

 A&H V, 237 F.3d at 234 (citation omitted). UTN argues that
the district court erred in applying this factor because it “gave
no consideration to whether the consuming public might expect
[Chase] to (a) offer both the FREEDOM CARD and the
CHASE FREEDOM CARD, (b) offer a card for the subprime
market, or (c) enter the subprime market.” Appellants’ Br. at
22-23. However, that is the sum of UTN’s argument on this
point. UTN does not attempt to demonstrate how such an
inquiry would have resulted in finding a likelihood of
confusion, nor does UTN discuss how the district court’s failure


    27
         This argument centers on Lapp factor (10).

                                            43
to conduct the inquiry prejudiced it.

       UTN does claim that

       the consuming public clearly might expect
       [Chase] to produce a credit card product,
       including a credit card product for the subprime
       market served by FREEDOM CARD. In that
       regard, it is undisputed that [Chase was]
       investigating the subprime market following its
       meetings with FREEDOM CARD in 1999.

UTN’s Br. at 25. However, this statement is not correct. There
was undisputed deposition testimony that Chase was preparing,
but had not yet started, some targeted testmarketing in the sub-
prime market. However, that activity took place in 2004, not
when Chase and UTN met in 1999. Moreover, the record does
not establish that any such entry would have involved the
CHASE FREEDOM mark; a mark that Chase discontinued in
2003. In addition, Chase and UTN defined the sub-prime
market very differently. CHASE defined the sub-prime market
as consumers with a credit score lower than 660 with no
bankruptcies. UTN defined that market as consumers having
credit scores below 580 with recent bankruptcies. See n.6,
supra.

       G. Failure to address all of the Lapp factors.

      Finally, UTN argues that the district court failed to
address Lapp factor (9) – the relationship of the goods in the
minds of consumers because of the similarity of function.

                              44
According to UTN, this failure, in and of itself, warrants
reversal and remand. In support of that contention, UTN relies
on Kos Pharmaceuticals, 369 F.3d at 711-12. There, we said
that if a district court finds that certain of the Lapp factors do
not apply or do not further the inquiry, the court should explain
why it did not use those factors in arriving at its decision. In
Kos, the district court only considered two of the Lapp factors
and simply said that the “remaining Lapp factors do not [weigh
in the Petitioner’s favor].” Id. at 712. We held that this
statement “does not explain the basis for [the district court’s]
holding as to each factor, whether it viewed each as neutral,
irrelevant, or favorable to Andrx, or how it weighed and
balanced the combined factors.” Id.

       However, this does not help UTN now because UTN and
Chase agreed in the district court that Lapp factors (1) through
(6) and (8) were the most relevant factors for the district court
to analyze. Chase, 333 F. Supp. 2d at 245 n.14. (“the parties
agree that, because their goods compete in the same field, the
most relevant Lapp factors are (1) through (6) and (8).”). UTN
cannot fault the district court for not analyzing its claim under
factor (9) when it agreed that that factor was of dubious
relevance. The district court explained it was not discussing
Lapp factors 7, 9, and 10 because they “are not apposite for
directly competing goods. . . ”. Id. Moreover, UTN does not
even now discuss how the district court’s failure to address any
factor, including factor (9), resulted in prejudice or altered the
outcome in this case.

                      V. CONCLUSION


                               45
         For all of the above reasons, we will affirm the district
court.




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