Contempt order against US Polo Association vacated in 'double horsemen' logo case

A contempt order against the United States Polo Association and USPA Properties Inc (USPA) for violating a permanent injunction by selling sunglasses with a 'double horsemen' logo that is confusingly similar to the 'polo player' logo owned by PRL USA Holdings Inc and L’Oreal USA Inc (PRL) has been vacated by the US Court of Appeals for the Second Circuit because the injunction did not bar all uses of the mark (United States Polo Association Inc v PRL USA Holdings Inc (May 13 2015, Winter R)).

This ruling stems from a 30-year litigation over marks inspired by the polo sport. PRL owns the trademark rights and exclusive licences for the Polo Ralph Lauren brand. PRL sells products with its mark, the 'polo player' logo, an image consisting of one horse-mounted polo player holding one singular raised mallet and the POLO word mark. USPA is not-for-profit organisation that governs the sport of Polo and sells products with the 'double horsemen' mark, an image consisting of two polo players mounted on a horse, one player with a mallet raised and the other with the mallet lowered towards the ground in such a manner that the mallets significantly overlap.  

In 1984 an injunction issued against USPA prohibiting the use of any PRL marks or symbol “which is confusingly similar” in connection with the sale of any goods or services. Although it was clear that the injunction applies to all markets, the litigations that followed for the subsequent three decades illustrates the difficulty of determining the meaning of “confusingly similar” in the context of an injunction. 

In 1996 USPA began using four variations of the 'double horsemen' mark on apparel and a variety of other products. In 2003, despite resolving many of their issues in a settlement agreement, the parties on went to trial, where a jury concluded that three out of the four 'double horsemen' marks were not confusingly similar to PRL’s marks as related to apparel, leather goods and watches.

In 2009 USPA began producing fragrance products with the 'double horsemen' logo and PRL protested against this use. USPA sought a declaratory judgment that this use did not infringe PRL’s rights and PRL countered with a claim of trademark infringement. Following a bench trial in 2012, Judge Sweet rejected USPA’s claims and held in favour of PRL. A permanent injunction was entered against USPA prohibiting use of the marks on beauty products, cosmetics and fragrances. Additionally, the injunction prohibited use of the image of one or more mounted polo players which constitutes a colourable imitation of, or is confusingly similar to, PRL’s 'polo player' logo in connection with the sale or offering for sale of any goods or rendering of any services, language that this court claimed tracks the 1984 injunction.

Shortly after the fragrance decision, PRL sought a contempt order against USPA, claiming that USPA violated the 1984 injunction through the sale of sunglasses with the 'double horsemen' mark during the years of 2009-2012. The district court found USPA in contempt and USPA appealed.

The Second Circuit explains that, for the district court to hold USPA in contempt, there must be a finding that:

1. USPA’s knowledge of the apparel and fragrance litigations would put a reasonable person on notice that selling eyewear would be a violation of the injunction; and
2. the finding of confusing similarity at the time of the contempt proceeding was supported by clear and convincing evidence.

In vacating the contempt order, the Second Circuit pointed to the verdict in the apparel litigation, calling it a critical fact that the district court overlooked because it showed the necessity of a market analysis in the present contempt proceeding. The apparel litigation’s verdict showed that the 'double horsemen' logo can be non-infringing in at least some markets since the jury found it was non-infringing when used on apparel, leather goods and watches, yet still infringing in other markets as shown by the subsequent fragrance litigation. In the fragrance litigation, the apparel’s verdict was non-binding because the court took into consideration the differences in the apparel and fragrance markets. In the eyewear contempt proceeding, the district court relied upon the fragrance injunction to bar the use of the 'double horsemen' in all markets except for apparel.

This reasoning inadvertently equated eyewear market to the fragrance market without any evidence or proof to point to such a conclusion. The court suggested that, without evidence to the contrary, the market for sunglasses appears much more similar to the market for apparel and, therefore, relying on the fragrance injunction to bar sunglasses makes even less sense.

The Second Circuit’s decision comes with a warning that market-specific standards should not be applied as a blanket rule to contempt proceedings because the results of multi-factor tests are unpredictable. Moreover, a finding of confusing similarity in an infringement proceeding may not be sufficient to find confusing similarity in a contempt proceeding. 

Howard Shire and Jessica Cohen-Nowak, Kenyon & Kenyon LLP, New York