The US Court of Appeals for the Second Circuit affirmed a ruling that a defendant’s use of a mark in connection with the sale of used goods did not create consumer confusion, finding that the district court adequately analyzed the relevant Polaroid factors and did not erroneously apply the 1947 Champion Spark Plug case. Hamilton Int’l Ltd. v. Vortic, LLC, Case No. 20-3369 (2d Cir. Sept. 14. 2021) (Cronan, J.)
Vortic is a watchmaker that specializes in the restoration and conversion of antique pocket watches into wristwatches. Hamilton International brought a trademark infringement suit against Vortic based on a watch that Vortic sold called the “The Lancaster.” The Lancaster name pays homage to Lancaster, Pennsylvania, which is where the Hamilton Watch Company was originally located. The watch was made with restored “Railroad-Era” movements (the internal mechanism of the watch with the hands and face attached) that were originally produced by Hamilton. The Hamilton mark could be seen both on the antique face of the watch and through the see-through back on the internal workings. Vortic’s mark, as well as “The Lancaster” and a serial number, were located on a ring on the rear of the watch.
The district court focused on the Polaroid factors in its likelihood of consumer confusion analysis and on the issue of disclosure under Champion. The district court found that Vortic’s labeling and disclosure were compliant with Champion, that there was no evidence of actual confusion or bad faith and that the buyers of these antique watches were sophisticated purchasers. The district court found no likelihood of confusion and entered judgment for Vortic on all claims. Hamilton appealed.
The main issue on appeal was whether the district court erred in finding no likelihood of consumer confusion. To show a likelihood of consumer confusion, “[a] plaintiff must show ‘a probability of confusion, not a mere possibility’ affecting ‘numerous ordinary prudent purchasers.’”
The Second Circuit considered the district court’s application of Champion. In that case, the Supreme Court determined that keeping the “Champion” logo on refurbished spark plugs would not mislead consumers as the plugs were originally Champion plugs and had the terms “Repaired” or “Used” stamped on them, which provided full disclosure. The Court explained that the lesson from Champion is that when a refurbished “genuine product” is resold, “the seller’s disclosures and the extent of a product’s modifications are significant factors to consider” in any infringement analysis.
Hamilton argued that the repair of the Hamilton parts that went into The Lancaster was so extensive that Champion should not have been applied. The Second Circuit disagreed, noting that the only modification to the original movement was a replacement lever, and that it was clear to consumers that The Lancaster was an “antique pocket watch modified into a wristwatch rather than an entirely new product.”
Hamilton also unsuccessfully argued that the district court erred by not first using the Polaroid factors before turning to the Champion analysis. The Second Circuit explained that since the plaintiff bears the burden [...]