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Precedential or Non-Precedential: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 97-1541




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Filed January 21, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 97-1541

A&H SPORTSWEAR INC.; MAINSTREAM SWIMSUITS, INC.

v.

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

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

Submitted en banc December 14, 1998

Before: BECKER, Chief Judge, SLOVITER, STAPLETON,
MANSMANN, GREENBERG, SCIRICA, NYGAARD, ALITO,
ROTH, LEWIS, MCKEE, and RENDELL 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.
       H. Robert Fiebach
       Cozen & O'Connor
       Philadelphia, PA 19103

       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., Appellants in No.
        97-1541

       Michael F. Snyder
       Seidel, Gonda, Goldhammer &
       Abbott
       Philadelphia, PA 19102

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

       Arthur H. Seidel
       Stephen J. Meyers (Argued)
       Seidel, Gonda, Lavorgna & Monaco
       Philadelphia, PA 19102

        Attorneys for A & H Sportswear
        Inc. and Mainstream Swimsuits,
        Inc., Appellees in No. 97-1541

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Presently pending before the en banc court in this
trademark infringement action is the appeal (No. 97-1541)
of Victoria's Secret Stores, Inc. ("VS Stores") and Victoria's
Secret Catalogue, Inc. ("VS Catalogue") (together "VS"), a
well-known manufacturer of lingerie and now swimwear,
from the order of the District Court that found VS had
violated the Lanham Act. This trademark infringement

                                2
action had been filed by appellee A&H Sportswear ("A&H")
and its affiliate, Mainstream Swimsuit, Inc., (together
"A&H") challenging VS's use of the trademark THE
MIRACLE BRA on lingerie and swimwear. The District
Court found that VS did not infringe A&H's trademark by
its use of THE MIRACLE BRA on lingerie. However, the
District Court did find infringement by VS on the ground
that its use of THE MIRACLE BRA on swimwear created a
"possibility of confusion" with A&H's MIRACLESUIT
swimsuit. It thus ordered VS to publish a disclaimer when
marketing THE MIRACLE BRA swimwear and to pay past
and future royalty fees to A&H.

VS contends in No. 97-1541 that the District Court's use
of a "possibility of confusion" standard rather than the
prevalent "likelihood of confusion" standard was error and
that the royalty award was an abuse of discretion. For its
part, A&H contends that because the District Court found
a possibility of confusion between the MIRACLE BRA
swimwear and the MIRACLESUIT, it was entitled to an
accounting of the profits VS made. A&H filed a cross-appeal
(No. 97-1570) in which it contends that the District Court
clearly erred in failing to find a likelihood of confusion
between THE MIRACLE BRA mark as applied to lingerie
and A&H's prior MIRACLESUIT mark.

A panel of this court heard argument on the appeal and
cross-appeal on May 19, 1998. Thereafter, the panel
recommended a court originated rehearing en banc, see
Third Circuit Internal Operating Procedure 9.4, so that the
en banc court could decide whether to approve the
possibility of confusion standard for trademark
infringement applied by the District Court.

After the court solicited the views of counsel for the
parties regarding en banc consideration, the court voted to
take this case en banc, and the Chief Judge so ordered on
August 26, 1998. The parties were given the opportunity to
file supplementary briefs. Based on the court's review of the
original and supplementary briefs, the court en banc voted
to consider VS's appeal (No. 97-1541) on the basis of the
briefs submitted by the parties, which forcefully and
comprehensively set forth their positions and the relevant
law.

                               3
The court further determined that the cross-appeal (No.
97-1570) does not present any issue that requires en banc
consideration, and resubmitted that appeal to the original
panel. We recognize that this treatment will entail some
duplication between the panel and en banc opinions.

I.

FACTS AND PROCEDURAL HISTORY

The underlying facts are set forth in the District Court's
two lengthy published opinions, A&H Sportswear Co. v.
Victoria's Secret Stores, Inc., 

(E.D. Pa.
1996) (addressing liability), and A&H Sportswear Co. v.
Victoria's Secret Stores, Inc., 

(E.D. Pa.
1997) (as amended) (addressing remedies). 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 afford the wearer greater "hold-in" control of the
hips and waist, making 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 $54 to over $100. FF 14. The first 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 arrangement was discontinued

                                4
because VS failed to identify the MIRACLESUIT by its
trademark in several instances. FF 29, 30.

VS Stores is the nation's top retailer of lingerie. It 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
selling a much wider array of merchandise (including
swimwear) through over 300 million catalogues it circulates
each year. FF 6. VS Stores and VS Catalogue are
independent subsidiaries 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"
and chose THE MIRACLE BRA name in December 1992,
allegedly after a model, who tried the new bra, 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 its first 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 did not initially object to VS's trademark
use of THE MIRACLE BRA on lingerie.

The following year, 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. Sales expanded to 160 stores in
the Spring of 1995, and, at that time, THE MIRACLE BRA
design and trademark was incorporated into a one-piece
swimsuit, using the push-up features of THE MIRACLE
BRA. VS retailed the swimsuit for approximately $69, about
the same price as many MIRACLESUITs. FF 31-34, 15, 8,

                               5
44. Previously, VS Stores had offered swimsuits only three
or four times over eight years, but VS Catalogue had begun
to build its swimsuit business by launching a swimwear
specialty catalogue in March 1994, which contained
swimsuits of other manufacturers. FF 5, 32.

In August 1994, even before its first sale of THE
MIRACLE BRA swimsuit, VS Stores applied for a
registration of THE MIRACLE BRA trademark for swimwear.
FF 34. 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 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.

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 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. That judgment is the
subject of A&H's cross-appeal, addressed in the opinion of
the panel referred to above.

With respect to the marks as applied to swimwear, the
District Court's opinion on liability has no explicit finding
that there was no likelihood of confusion between THE
MIRACLE BRA and the MIRACLESUIT marks. There are
statements in the subsequent opinion on damages which
could suggest such a finding, but that opinion contains no
explicit analysis of the likelihood of confusion between the
two trademarks as applied to swimwear.

The District Court did find, in its opinion on liability, that
there was a possibility of confusion between the two marks
as applied to swimwear. The District Court believed that
under the applicable law "where a party moved into the
territory of an established concern, the likelihood of

                                6
confusion standard' should be lowered to a `possibility of
confusion.' 

(citation omitted).
Because the court treated VS as a "newcomer" which used
a mark similar to that of an "established concern," it
concluded that VS's use of the MIRACLE BRA on swimwear
had infringed the MIRACLESUIT mark. After the District
Court issued its liability ruling, it certified its order under
28 U.S.C. S 1292(b) as raising the issue of the proper legal
standard to be applied to trademark infringement, and VS
sought permission to appeal to this court. We declined to
accept the interlocutory appeal.

The District Court then conducted a two-day trial on
damages. Because no court had ever found a party in
violation of the lower possibility of confusion standard (a
standard unique to this Circuit), the District Court was
without any precedent as to a remedy and decided to
borrow an equitable remedy from patent law. It awarded
A&H royalties on past and future net sales of THE
MIRACLE BRA swimwear, quantified past damages
($63,480 against VS Stores and $1,086,640 against VS
Catalogue) and ordered VS to continue to use the following
disclaimer: "The Miracle Bra(R) swimwear collection is
exclusive to Victoria's Secret and not associated with
MIRACLESUIT(R) by SWIM SHAPER(R)". This disclaimer
continues to appear wherever VS markets its THE
MIRACLE BRA swimwear. VS had begun voluntarily using
the disclaimer following the liability verdict.

The District Court denied all of A&H's other claims and
requested relief, including relief under the theories of
reverse confusion and unjust enrichment, and denied
A&H's request for an accounting, punitive damages and
attorneys' fees. VS moved for an initial en banc review,
focusing on the District Court's adoption of the possibility
of confusion standard, but the motion was denied and the
appeal was originally heard by the panel. The District Court
entered an order staying its order of relief pending appeal.
As set forth above, VS's appeal (No. 97-1541) is now before
this court en banc. We have jurisdiction under 28 U.S.C.
S 1291.

                               7
II.

DISCUSSION

MIRACLESUIT v. THE MIRACLE BRA for Swimwear

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., 

, 200 (3d Cir. 1995). However, the legal standard
to be applied is a matter of law and, like all conclusions of
law, is subject to plenary review. See Duraco Prods., Inc. v.
Joy Plastic Enters., Ltd., 

, 1438 (3d Cir. 1994).

To succeed in a claim for trademark infringement under
section 32 of the Lanham Act, the owner of a valid and
legally protectable mark, such as A&H, must show that the
defendant 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
       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).

The same standard is embodied in section 43(a) of the
Lanham Act, which governs unfair competition claims. That
section 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

                               8
       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).

More than a century ago, and even before the enactment
of the Lanham Act, the Supreme Court emphasized the
need to avoid consumer confusion as the central concern
motivating trademark law when it stated, "All that courts of
justice can do . . . is to say that no trader can adopt a
trademark, so resembling that of another trader, as that
ordinary purchasers, buying with ordinary caution, are
likely to be misled." McLean v. Fleming, 

, 251
(1878); see also Dranoff-Perlstein Assocs. v. Sklar, 

, 862-63 (3d Cir. 1992); Ford Motor Co. v. Summit Motor
Prods., Inc., 

, 293 (3d Cir. 1991); 3 J. Thomas
McCarthy, McCarthy on Trademarks and Unfair Competition
S 23:1, at 23-6 to -8 (4th ed. 1996). The confusion that
trademark law seeks to prevent is confusion as to the
source of the goods. Scott Paper Co. v. Scott's Liquid Gold,
Inc., 

, 1229 (3d Cir. 1978); McCarthy, supra
S 23:5, at 23-14.

As the law has developed, the standard to be applied
when goods that are the subject of a trademark
infringement claim are directly competing, as is the
situation with THE MIRACLE BRA for swimwear and
MIRACLESUIT, a swimwear product, is different than that
applied when the goods are not competing. The ten-factor
test for likelihood of confusion between marks that are not
competing, derived from Scott Paper 

,
is not required when the goods directly compete. In fact, we
have said that "[w]here the trademark owner and the
alleged infringer deal in competing goods or services, the
court need rarely look beyond the mark itself." Interpace
Corp. v. Lapp, Inc., 

, 462 (3d Cir. 1983).

In this case, the District Court did not make an explicit
finding as to whether there was a likelihood of confusion
between THE MIRACLE BRA when applied to swimwear and
MIRACLESUIT, a swimwear product.1 Instead, because the
_________________________________________________________________

1. In its opinion on damages, the District Court stated that it had
concluded in the liability opinion that "Plaintiffs had not met their

                               9
court concluded that VS was a newcomer to the swimwear
industry, it determined that a lower standard governed
infringement and, based on its interpretation of our
caselaw, it applied only a possibility of confusion rather
than a likelihood of confusion test.2 The District Court
concluded that there was a possibility of confusion between
the two marks and hence found infringement.

Our decision to take this appeal en banc presents us
with the opportunity to clarify whether we previously
adopted the possibility of confusion test and, if so, whether
we should continue to adhere to it. With this in mind, we
examine our prior decisions dealing with this issue on
which the District Court relied.

In Country Floors, Inc. v. Partnership of Gepner and Ford,

(3d Cir. 1991), we considered the claim of
Country Floors, a manufacturer and seller of upscale
ceramic tiles and accessories, that a competitor's use and
advertising of "Country Tiles" constituted infringement and
unfair competition. The District Court had granted
summary judgment in favor of the alleged infringer, but we
reversed because the District Court erred in making
credibility findings on summary judgment and because "a
number of key factual questions remained, not least among
them the likelihood of confusion" between the newcomer's
"Country Tiles" logo and the "Country Floors" trademark.

1064.

In discussing our holding, we adhered to the prevalent
"likelihood of confusion" standard. For example, in the
_________________________________________________________________

burden of establishing a likelihood of confusion under the applicable
legal doctrines summarized in Scott Paper . . . and its progeny." 967 F.
Supp. at 1461. The reference in the liability opinion is to a conclusion
of law that followed a lengthy and detailed analysis of the facts and law.
To the extent that the earlier analysis applied the likelihood of
confusion
standard, it did so only in the lingerie vs. swimwear context, not in
comparing swimwear to swimwear.

2. The court noted that in a telephone conversation six months after the
conclusion of the trial, the parties agreed the court should consider this
doctrine, and A&H's complaint was deemed amended to include this as
an alternate theory for relief. 

.

                               10
context of finding that there was evidence from which a
factfinder could find actual confusion, we noted that
"[a]lthough only likelihood of confusion, and not actual
confusion, is required by the Lanham Act, actual confusion
usually implies a likelihood of confusion." 

We
then stated that because the case contained other issues
involving "law peculiar to trademark, tradename and unfair
competition cases," we would "comment on them for the
guidance of the District Court." 

It was in this
latter context that the discussion of the possibility of
confusion standard arose. We stated:

       [Plaintiff Country Floors] says the Partnership moved
       into the territory of an established concern and that
       the "likelihood of confusion standard" should be
       lowered to a "possibility of confusion," the standard
       applied when a newcomer enters an area already
       occupied by an established business. See Telechron,
       Inc. v. Telicon Corp., 

, 908-09 (3d Cir.
       1952). We agree. This legal conclusion requires the
       district court to determine what market is relevant to
       the Corporation's claim that use of the name "Country
       Tiles" violates S 43(a) of the [Lanham] Act. Thus, if the
       possibility exists that the names "Country Floors" and
       "Country Tiles" will be confused, determination of the
       relevant market becomes especially important on the
       Corporation's claim that the Partnership has
       appropriated the Corporation's tradename in violation
       of S 43(a) of the Lanham Act by adopting a confusingly
       similar tradename.

(citations and footnote omitted).

The 1952 Telechron decision, cited in the above passage,
appears to have been the genesis of the "possibility of
confusion" test in this circuit. In that case, we, upheld an
injunction that was granted to the holder of the Telechron
mark, used for clocks and small radio sets, against use of
"Telicon" in the television and large radiofield. Telechron,

. We first noted and emphasized the
similarity of the coined words. We also approved the
approach of Judge Learned Hand that "as between two
arbitrary trade names `any possible doubt of the likelihood
of damage should be resolved in favor of the (first user).' "

                               11


(quoting Lambert Pharmacal Co. v. Bolton Chem.
Corp., 

, 326 (S.D.N.Y. 1915)). The Telechron case
did not, however, deviate from the statutory likelihood of
confusion standard, and thus is questionable precedent for
the reference to a new possibility of confusion standard in
Country Floors.

Country Floors was cited the following year in Merchant &
Evans, Inc. v. Roosevelt Building Products Co., 

(3d Cir. 1992), overruled on other grounds by Two Pesos,
Inc. v. Taco Cabana, Inc., 

(1992), a case in
which the District Court had granted a preliminary
injunction providing relief for infringement of the trade
dress of Zip-Rib, a concealed fastener metal roofing system,
by a copied product. We held the trade dress feature
functional, but discussed the test for confusion in the
context of the claim of infringement of the logo. We
remanded so that the district court could apply the
appropriate factors in determining whether there was a
likelihood of confusion. We then stated, in reference to
Country Floors,

       we do not preclude the district court from finding on
       remand that Merchant has satisfied its burden of
       showing that it is entitled to a preliminary injunction
       on its trademark infringement claim. As this court held
       in Country Floors, when a newcomer moves into a
       territory of an established concern and uses a name or
       mark similar in some respect to that used by the
       established concern, "the `likelihood of confusion
       standard' should be lowered to a `possibility of
       confusion' " standard. We believe the appropriate
       course in light of the district court's failure to give
       sufficient consideration to a number of relevant factors
       in its analysis is to remand so that the court can
       consider those factors in its determination of whether
       Merchant has shown a possibility of confusion between
       the marks.

(citation omitted).

One respected commentator has characterized our
discussion of possibility of confusion in Country Floors as
dictum. See McCarthy, supra S 23:3, at 23-12. Indeed, that

                               12
discussion was neither used in nor essential to the holding.
It is more difficult to characterize as dictum the language
from Merchant & Evans quoted above, as that was part of
the direction to be followed by the District Court on
remand. Moreover, we did not treat the references to
possibility of confusion as dictum in our subsequent
decision in Versa Prods. 

.

The issue in Versa was alleged infringement of a trade
dress used in control panels of offshore oil-drilling rigs.
Both trade dress and trademark infringement are governed
by the same statutory provision, section 43(a) of the
Lanham Act, which requires a plaintiff to prove there was
a likelihood of confusion. See Two Pesos, 

. In his opinion, Judge, now Chief Judge, Becker
recognized that the usual formulation requires a showing of
a likelihood or probability of confusion but stated that,
"[w]here an alleged infringer was new to an area and the
plaintiff was well-established, this court has at times
replaced the `likelihood of confusion' requirement with a
lower `possibility of confusion' standard." Versa Prods. 

(citing Telechron, 

-09;
Country Floors, 

; and Merchant &
Evans, 

). In Versa, we commented
that "a Johnny-come-lately copier arguably creates a
greater risk" that consumers will be misled as to source,
but we nonetheless rejected the "possibility of confusion"
standard in trade dress cases, except, at most, as "a factor
properly taken into account in assessing the likelihood of
confusion." 

.

After distinguishing trade dress from trademark we said,
as to the latter:

       The trademark "possibility of confusion" standard must
       therefore be supported by other considerations. We
       believe that the primary reasons for lowering the
       measure of confusion when a newcomer copies an
       established trademark are the general lack of legitimate
       reasons for copying a competitor's mark, and the high
       degree of reliance by consumers on trademarks as
       indicators of the source of products. Whether or not
       these considerations translate to the realm of product
       packaging, we think that with respect to product

                               13
       configurations the significance of each of the factors is
       greatly diminished. . . . Indeed, if any modification of
       the likelihood of confusion standard is justified in the
       product configuration context, the standard might well
       be heightened, perhaps to a "high probability of
       confusion." Nevertheless, we see no need to adopt such
       a standard today, preferring for now merely to reject
       the "possibility of confusion" standard for product
       configuration infringement cases, and adhering to the
       conventional "likelihood of confusion" standard.

Two Pesos, 

("There is no
persuasive reason to apply different analysis as to
[trademarks and trade dress]").

In light of the language in our opinions, the District
Court was not unreasonable to interpret our line of cases
as establishing that the lower possibility of confusion
standard is to be applied when a newcomer enters the
swimwear business. Although the District Court expressly
rejected characterizing its theory as a "newcomer" doctrine,
at least as that theory was applied by the Second Circuit in
Thompson Med. Co. v. Pfizer, Inc., 

, 214 (2d
Cir. 1985),3 it is apparent that the court's analysis in fact
is premised upon a "newcomer" theory. Because the court
characterized VS as a "newcomer" to the swimwear
business, it held that VS infringed A&H's MIRACLESUIT
based on the possibility of confusion standard.4

VS contends that there is no possibility of confusion
standard under the Lanham Act, and that if this court in
fact has created such a lower standard, we should reverse
course. A&H has consistently argued that the District Court
should have begun its analysis with (and found) a
likelihood of confusion between THE MIRACLE BRA
_________________________________________________________________

3. The District Court noted that the Second Circuit doctrine requires that
a senior user's mark be highly distinctive and that the junior user be
guilty of bad faith, elements that the Third Circuit has not 

n.11.

4. VS argues it was erroneously characterized as a newcomer, and that
its entry into the swimwear market preceded its use of THE MIRACLE
BRA in swimsuits. As we will remand, we will not preclude the District
Court from considering that argument.

                                14
swimwear and the MIRACLESUIT, which would have made
resort to the possibility of confusion standard unnecessary.
In its reply brief, A&H nevertheless took the position that
the possibility of confusion standard also is a proper basis
for a finding of liability and for granting the relief it seeks.
In its supplemental brief to the en banc court, however,
A&H recognizes that such a test would "requir[e] nothing
more than airy speculation." A&H Suppl. Br. at 1.

We are concerned that our inexactitude of language may
have engendered confusion as to the appropriate standard.
For example, this court used the likelihood of confusion
standard in Fisons Horticulture, Inc. v. Vigoro Indus., 

, 472 (3d Cir. 1994), an opinion decided after
Country Floors and Merchant & Evans and authored by the
same judge who authored Merchant & Evans. Moreover, the
district courts in this circuit have not been uniform in their
application of our precedent. See, e.g., Guardian Life Ins.
Co. of Am. v. American Guardian Life Assurance Co., 943 F.
Supp. 509, 521 n.8 (E.D. Pa. 1996) (acknowledging but not
applying possibility of confusion standard); Genovese Drug
Stores, Inc. v. TGC Stores, Inc., 

, 344-45
(D.N.J. 1996) (same); Barre-Nat'l, Inc. v. Barr Labs., Inc.,

, 740-41 (D.N.J. 1991) (same); Blumenfeld
Dev. Corp. v. Carnival Cruise Lines Inc., 

,
1319-20 (E.D. Pa. 1987) (noting possibility of confusion
standard but finding likelihood of confusion).

We take this opportunity to hold that the appropriate
standard for determining trademark infringement under the
Lanham Act is the likelihood of confusion.

In the first place, "likelihood of confusion" is the language
used in the Lanham Act. In the second place, the
impressive survey set forth in VS's original brief, and
supplemented in its supplemental brief, demonstrates that
the other circuits are unanimous in requiring the use of the
likelihood of confusion standard in Lanham Act
infringement cases. See, e.g., Elvis Presley Enters. v.
Capece, 

, 193 (5th Cir. 1998) ("Likelihood of
confusion . . . is more than a mere possibility of
confusion."); International Ass'n of Machinists and
Aerospace Workers v. Winship Green Nursing Ctr., 

, 200 (1st Cir. 1996) (markholder "must show more

                               15
than the theoretical possibility of confusion"); August Storck
K.G. v. Nabisco, Inc., 

, 618 (7th Cir. 1995)
(possibility of confusion not sufficient; if it were, "all
comparative references would be forbidden, and consumers
as a whole would be worse off"); Vitek Sys., Inc. v. Abbott
Labs., 

, 192 (8th Cir. 1982) ("[A] mere
possibility is not enough; there must be a substantial
likelihood that the public will be confused.' "); see also
cases collected in the Appendix.

The cases originally cited by A&H as reflecting
acceptance by some courts of the possibility of confusion
standard merely use the word "possible" or "possibility" in
discussion but do not establish a lower standard for finding
liability in trademark infringement. For example, in G.D.
Searle & Co. v. Chas. Pfizer & Co., 

(7th Cir.
1959), the court, after quoting its earlier statement that
"[o]ne entering a field of endeavor already occupied by
another should, in the selection of a trade-name or trade-
mark, keep far enough away to avoid all possible
confusion," 

(citation omitted) nevertheless plainly
stated that "the test under the statute . . . is likelihood of
confusion" and applied that test in reversing the District
Court's finding for the defendant, 

Harold F. Ritchie, Inc. v. Chesebrough-Pond's,
Inc., 

(2d Cir. 1960), although the court
stated, "Important in determining whether the second
comer's entrance into the market creates possible
confusion, is any evidence of conscious imitation of the first
comer's product," 

both the trial court and the
Court of Appeals applied the likelihood of confusion
standard, see 

Nor does this court's recent decision in Pappan Enters.,
Inc. v. Hardee's Food Sys., 

(3d Cir. 1998),
also cited by A&H, employ a possibility of confusion
standard. That was an appeal from the denial of a
preliminary injunction. It is true that in the discussion of
the irreparable injury factor, a requisite for a preliminary
injunction, we stated that irreparable injury could be based
on a possibility of confusion, 

but there we were
not addressing the standard for trademark infringement.
Pappan neither applied nor endorsed a possibility of

                               16
confusion standard, as is clear in the next sentence in the
opinion which states, in discussing injunctive relief, "This
court has held that once the likelihood of confusion caused
by trademark infringement has been established, the
inescapable conclusion is that there was also irreparable
injury." 

treatise on trademark law is instructive:

       Likelihood of confusion has been said to be
       synonymous with "probable" confusion - it is not
       sufficient if confusion is merely possible. . . . Dicta in a
       few cases hint at a "possibility of confusion" test. . . .
       The Third Circuit . . . would apply the theory[of a
       possibility of confusion standard] to a newcomer
       entering a territory already occupied by an established
       business. The Third Circuit has said that the primary
       reasons for its lower measure of confusion are "the
       general lack of legitimate reasons for copying a
       competitor's mark . . . and the high degree of reliance
       by consumers on trademarks as indicators of the
       source of their products." [Versa Prods. 

.] Author's Comment: The Third Circuit's
       explanation for its possibility theory does not
       satisfactorily explain the need for a different standard.
       Such a rule tilts the competitive playing field in favor
       of the established company and against the competitive
       newcomer.

McCarthy, supra S 23:3, at 23-11 to -12 (emphasis in
original) (footnotes omitted); see also David Perry,
"Possibility of Confusion" in Third Circuit Trademark
Infringement: A Standard Without a Test, 71 Temple L. Rev.
101 (1998).

We hold that the District Court erred in holding VS liable
under a possibility of confusion standard. Therefore, we will
remand this case to the District Court so that it can
conduct the appropriate analysis of the likelihood of
confusion under the standards set by the Lanham Act and
in the relevant precedent. As one commentator explains:
"Whether confusion is likely is proved by inference drawn
from the totality of relevant facts identified and analyzed by
established rules . . . . `There are no hard and fast rules as

                                17
to how much evidence of confusion is enough. Rather,
when looking at the evidence the reviewing court must take
into consideration the circumstances surrounding each
particular case.' " Richard L. Kirkpatrick, Likelihood of
Confusion in Trademark Law, S 1.8 (PLI, 1997) (quoting
Dieter v. B&H Indus., Inc., 

, 326 (11th Cir.
1989)).

Because the District Court did not proceed to that step in
its analysis, it did not address whether the interaction
between THE MIRACLE BRA and the MIRACLESUIT
implicates the doctrine of reverse confusion, expressly
adopted by this court in 

. There we
explained, "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." 

of reverse confusion, which is similar to dilution,
"is that the 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." 

(quoting Ameritech, Inc. v. American
Information Technologies Corp., 

, 964 (6th Cir.
1987)).

In support of its claim of reverse confusion, A&H
produced evidence that VS's expenditures for advertising
and promotion far surpassed its own, although the parties
joust over the actual figures. VS argues that the reverse
confusion doctrine is inapplicable because A&H also
conducted significant advertising. It points to the $1.2
million A&H spent on direct advertising of MIRACLESUIT
and to the extensive free publicity the MIRACLESUIT
received. VS concedes that it spent more money on
advertising, but insists that A&H was not overwhelmed.

The District Court discussed the advertising campaigns,

, but did not make an explicit
finding regarding reverse confusion. The only purpose of
the reverse confusion analysis is to ascertain if consumers
are confused as to the source because of the massive influx
of advertising and promotional material. Although the
District Court's finding that there was no likelihood of
confusion as between MIRACLESUIT and THE MIRACLE

                                18
BRA lingerie necessarily means that it found no reverse
confusion in that market, we can draw no conclusion as to
what the court found as to reverse confusion in the
swimwear to swimwear market. On remand, that will be
among the issues to be considered by the court in
determining whether A&H has shown a likelihood of
confusion.

III.

REMEDY

Inasmuch as we will vacate the judgment for A&H
because it was based on the finding of possibility of
confusion, it necessarily follows that the remedy ordered
will be vacated as well. We nonetheless offer some guidance
on the issue of remedies, should the court find
infringement under the likelihood of confusion standard.

The Lanham Act provides for two remedies following a
finding of liability for infringement. The most generally
applied remedy is injunctive relief pursuant to section 34,
which provides that "courts vested with jurisdiction of civil
actions arising under this chapter shall have power to grant
injunctions, according to the principles of equity and upon
such terms as the court may deem reasonable, to prevent
the violation of any right of the registrant of a mark
registered in the Patent and Trademark Office." 15 U.S.C.
S 1116(a).

The other statutory remedy, monetary damages
(including costs), is provided by section 35, which states in
pertinent part:

         (a) When a violation of any right of the registrant of a
         mark . . . shall have been established . . . the plaintiff
         shall be entitled . . . subject to the principles of equity,
         to recover (1) defendant's profits, (2) any damages
         sustained by the plaintiff, and (3) the costs of the
         action. The court shall assess such profits and
         damages or cause the same to be assessed under its
         direction. In assessing profits the plaintiff shall be
         required to prove defendant's sales only; defendant

                                 19
       must prove all elements of cost or deduction claimed.
       In assessing damages the court may enter judgment,
       according to the circumstances of the case, for any
       sum above the amount found as actual damages, not
       exceeding three times such amount. If the court shall
       find that the amount of the recovery based on profits is
       either inadequate or excessive the court may in its
       discretion enter judgment for such sum as the court
       shall find to be just . . . . Such sum in either of the
       above circumstances shall constitute compensation
       and not a penalty. The court in exceptional cases may
       award reasonable attorney fees to the prevailing party.

15 U.S.C. S 1117(a).

The District Court declined to enter the broad injunction
sought by A&H prohibiting VS from use of THE MIRACLE
BRA mark with swimwear. Instead, the court issued an
injunction requiring that VS use the disclaimer it was
already using ("The Miracle Bra) swimwear collection is
exclusive to Victoria's Secret and not associated with
MIRACLESUIT(R) by SWIM SHAPER(R) ") when it uses THE
MIRACLE BRA trademark with respect to swimwear.

The court explained that A&H had not proven any direct
diversion of sales but only a possibility of harm to
reputation and 

, that there
was no persuasive evidence that THE MIRACLE BRA bikini
is of inferior quality to the MIRACLESUIT, and that an
injunction prohibiting VS from using a "miracle" mark for
swimwear would "do little to alleviate any existing confusion
and resulting damage to reputation and goodwill which may
have already occurred. However, relief in the form of a
disclaimer is the more likely candidate for correcting any
consumer misperceptions as to the source of the parties'
products and repairing damage to Plaintiffs' reputation and
goodwill." 

In the present posture of the case, we do not comment on
the propriety of injunctive relief, as that will depend on
what finding of harm, if any, the District Court makes on
remand. We understand VS to have committed itself to
continue using the disclaimer, whatever the eventual result
in this case. We recognize the difficulty of evaluating the

                               20
effectiveness of a disclaimer, but note that this remedy has
been applied in other cases, see Springs Mills, Inc. v.
Ultracashmere House, Ltd., 

(2nd Cir. 1983)
(no error in District Court's limited injunction mandating a
disclaimer); see also AMF Inc. v. Sleekcraft Boats, 

(9th Cir. 1979) (use of contested mark must be
accompanied by distinctive house mark or logo), and that
the District Court fully articulated why it was an
appropriate remedy in this case.

We do comment on the portion of the District Court's
order directing VS to pay royalties to A&H. The court
directed that VS pay a 4% royalty on all net sales of THE
MIRACLE BRA swimwear made prior to the date VS first
used the disclaimer, a 2% royalty on sales made after the
disclaimer, and a 2% royalty on all net future sales. 

. It thus entered judgment against
VS Stores in the amount of $63,480 and against VS
Catalogue in the amount of $1,086,640.5 VS contends that
a royalty award is generally reserved for patent cases, see
35 U.S.C. S 284 (providing royalty in patent law), and that
the award here was particularly inappropriate in light of the
District Court's finding that VS did not act in bad faith.

The objections to the royalty award are well taken. A
royalty is a measure of damages for past infringement,
often used in patent cases and in the context of trade
secrets, but its use in trademark has been atypical. Neither
party has proffered, nor have we found, any case in which
a court both ordered a royalty award and continued to
permit the infringer to use a disputed trademark, which is
the effect of the District Court's order here. The court's
award of a royalty for future sales put the court in the
position of imposing a license neither party had requested
or negotiated.

Even when the courts have awarded a royalty for past
trademark infringement, it was most often for continued
use of a product beyond authorization, and damages were
_________________________________________________________________

5. These figures were based on application of the 4% royalty to the net
sales of the MIRACLE BRA swimwear up to the trial on damages. 

, 1477, 1481. Shortly thereafter, VS began to use
the disclaimer. Neither party challenges the calculations.)

                               21
measured by the license the parties had or contemplated.
See, e.g., Howard Johnson Co. v. Khimani, 

,
1519-20 (11th Cir. 1990); Ramada Inns, Inc. v. Gadsden
Motel Co., 

, 1563-65 (11th Cir. 1986); Boston
Prof'l Hockey Ass'n v. Dallas Cap & Emblem Mfg., Inc., 

, 75-76 (5th Cir. 1979) (royalty awarded based on
license fee that defendant offered to pay but which plaintiff
rejected). But see Sands, Taylor & Wood Co. v. Quaker Oats
Co. (Sands I), 

(7th Cir. 1992); Sands, Taylor
& Wood v. Quaker Oats Co. (Sands II), 

(7th
Cir. 1994). There is no basis for inferring such an
agreement here. Because A&H has suggested no other
justification for the royalty on past sales, we need not
speculate whether circumstances other than bad faith or a
prior licensing agreement would authorize such an award.

We would have similar concern about an award of
damages based on any other theory. The cases awarding
damages after a finding of likelihood of confusion have
measured damages based on proof of lost sales. See, e.g.,
Brunswick Corp. v. Spinit Reel Co., 

, 525-26
(10th Cir. 1987); see also Restatement (Third) of Unfair
Competition, S 36, cmt. c (absent proof of "actual harm"
injunction adequate remedy). In fact, therefore, damages in
those cases were measured based on actual confusion even
though liability may have been sustained under a lesser
burden. In light of the District Court's reiteration in the
opinion on damages that "Plaintiffs failed to offer any
evidence of lost profits or other pecuniary harm proximately
caused by Defendants' use of THE MIRACLE BRA on

, and its earlier finding
that sales of the MIRACLESUIT have steadily increased
since the introduction of the MIRACLE BRA swimwear, 

no basis to award damages or impose a royalty on
past or future sales.

Should A&H be successful on remand, it will
undoubtedly argue that it is entitled to an accounting of
profits. As we cannot anticipate what the District Court will
find, we note only that "an accounting for profits is a form
of equitable relief, and it does not follow as a matter of
course upon the mere showing of an infringement. It will be
denied where an injunction satisfies the equities of a case,

                               22
as for example, where there is a clear showing that no
profit was made." Williamson-Dickie Mfg. v. Davis Mfg., 

, 927 (3d Cir. 1958) (footnote omitted).

Finally, we recognize that, depending on its ultimate
finding, the District Court may be asked again to order
corrective advertising. It previously denied that request in
light of its order of a disclaimer, its finding that VS did not
act in bad faith,6 and its finding that A&H did not prove
any sizeable damage. 

79; see also
Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 

, 1233 (D. Colo. 1976) (awarding corrective
advertising where defendant's conduct was "wanton and
reckless"), aff'd as modified, 

(10th Cir.
1977). However, we believe that any further comment on
remedies, other than our rejection of a royalty under these
facts, would be premature.

IV.

CONCLUSION

To summarize, we have held that a plaintiff seeking to
show trademark infringement under the Lanham Act must
prove that there is a likelihood of confusion between the
marks at issue. We have not attempted to define "likelihood
of confusion," leaving that to case-by-case development.
Because the District Court did not use that standard in
holding VS liable for trademark infringement, we must
remand. In doing so, we do not require that the court hold
a new evidentiary hearing. The court previously held a two-
week non-jury trial to determine issues of liability, and a
subsequent hearing on damages. We assume that the
extensive record, including the transcripts and the exhibits
from those trials, is still available to the court and the
parties. The court has shown full comprehension of the
facts, and it may be that the court can make the relevant
findings from the material already available. For example,
_________________________________________________________________

6. Based on its finding that VS did not act in bad faith, the District
Court rejected A&H's claim under the Pennsylvania Antidilution law, 54
Pa. Cons. Stat. Ann. S 

.

                               23
we have remanded on the assumption that the court did
not make a finding on likelihood of confusion between THE
MIRACLE BRA used on swimwear and MIRACLESUIT. If the
District Court believes that such a finding can be made
based on the record before it, it is free to do so. The District
Court is free, however, to supplement the record as it
deems appropriate.

For the reasons set forth, we will remand for further
proceedings consistent with this opinion. Each party to pay
its own costs.

                               24
APPENDIX

First Circuit:

       IAM v. Winship Green Nursing Ctr., 

, 200
       (lst Cir. 1996) ("To demonstrate likelihood of confusion
       a markholder . . . must show more than the theoretical
       possibility of confusion.") (citing American Steel
       Foundries v. Robertson, 

, 382 (1926)); Star
       Fin. Serv., Inc. v. AASTAR Mortgage Corp., 

,
       10 (lst Cir. 1996) ("We require evidence of a
       `substantial,' likelihood of confusion -not a mere
       possibility"); Fisher Stoves, Inc. v. All Nighter Stove
       Works, 

, 194 (lst Cir.1980) ("A mere
       possibility, however, is not enough, there must be a
       substantial likelihood that the public will be confused
       as to the source of the goods.")(citing HMH Publ'g Co.
       v. Brincat, 

, 717 (9th Cir. 1974)); Valmor
       Prods. Co. v. Standard Prod. Corp., 

, 202,
       203 (lst Cir. 1972); T & T Mfg. Co. v. A.T. Cross Co.,
       

, 819 (D.R.I.), aff'd, 

(lst
       Cir. 1978).

Second Circuit:

       Estee Lauder Inc. v. The Gap, Inc., 

,
       1511 (2d Cir. 1997) ("The test, however, is not whether
       confusion is possible; nor is it whether confusion is
       probable among customers who are not knowledgeable.
       Rather, the test . . . is whether confusion is probable
       among numerous customers who are ordinarily
       prudent."); Totalplan Corp. of America v. Colborne, 

, 829 (2d Cir. 1994) ("For a finding of
       infringement a probability of confusion, not a mere
       possibility, must be found to exist.") (quoting Gruner +
       Jahr USA Publ'g v. Meredith Corp., 

,
       1077 (2d Cir. 1993)); Reebok Int'l Ltd. v. K-Mart Corp.,
       849 F. Supp. 252,272 (S.D.N.Y.) ("However, a court can
       only find a Lanham Act violation if there is a likelihood
       of confusion, not merely the possibility of confusion."),
       vacated by consent, 33 U.S.P.Q.2d 1863 (S.D.N.Y.
       1994).

Fourth Circuit:

                               25
       AMP Inc. v. Foy, 

, 1185-86 (4th Cir.1976)
       ("[T]he test is `likelihood to confuse.' Mere possibility of
       confusion is not sufficient."); Shakespeare Co. v. Silstar
       Corp. of America, Inc., 

, 1007 (D.S.C.
       1995) ("As the term likelihood of confusion, suggests,
       while it is not necessary for a trademark owner to
       prove that the defendant's use of a colorable imitation
       of its trademark has or will create actual confusion, it
       is not sufficient for the trademark owner to show a
       mere `possibility of confusion', or mere resemblance of
       the marks."), aff'd, 

(4th Cir. 1997);
       Dominion Fed. Sav. and Loan Ass'n v. Ridge Dev. Corp.,
       231 U.S.P.Q. 976 (E.D. Va.1986); N. Hess & Sons, Inc.
       v. Hess Apparel, Inc., 216 U.S.P.Q. 721, 734 (D. Md.
       1982), aff'd, 

(4th Cir. 1984) ("Although
       the plaintiff is not required to produce proof of actual
       confusion, a mere possibility of confusion is not
       sufficient."); accord Selchow & Righter Co. v. Decilpher,
       Inc., 

, 1496- 97 (E.D. Va. 1984);
       Lacoste Alligator, S.A. v. Bluestein's Men's Wear, 569 F.
       Supp. 491, 497 (D.S.C. 1983); Pizzeria Uno Corp. v.
       Temple, 

, 394 (D.S.C. 1983), aff'd,
       

(4th Cir. 1984).

Fifth and Eleventh Circuits:

       Pebble Beach Co. v. Tour 18 I Ltd., 

, 543
       (5th Cir. 1998) ("The touchstone of infringement is
       whether the use creates a likelihood of confusion . . .
       [which] is synonymous with a probability of confusion,
       which is more than a mere possibility of confusion.");
       Elvis Presley Enters. v. Capece, 

, 193 (5th
       Cir. 1998) ("Liability for trademark infringement hinges
       upon whether a likelihood of confusion exists between
       the marks at issue. Likelihood of confusion is
       synonymous with a probability of confusion, which is
       more than a mere possibility of confusion.") (citation
       omitted); Armstrong Cork Co. v. World Carpets, Inc.,
       

, 501 n.6 (5th Cir. 1979) ("[Plaintiff] would
       concede that when the alleged infringer is a newcomer,
       the test for trademark infringement is not whether
       there is a likelihood of confusion, but whether there is
       any possibility of confusion. This Circuit has not

                               26
       adopted that position, and we see no reason to add
       such a gloss to the language of 15 U.S.C.A. S 1114.");
       Fram Corp. v. W.E. Boyd, 

, 934 (5th Cir.
       1956) ("[T]he existence of a mere possibility of
       deception does not in and of itself constitute a basis on
       which to sustain a charge of unfair competition.").

Seventh Circuit:

       August Storck K.G. v. Nabisco, Inc., 

, 619
       (7th Cir. 1995) ("Once again, the district judge
       apparently believed that a `possibility' of confusion
       justifies a restriction on competition, which it does
       not."); S Indus., Inc. v. Stone Age Equip., Inc., 12 F.
       Supp. 2d 796, 813 (N.D. Ill. 1998) ("[T]he plaintiff must
       demonstrate a likelihood, not the mere possibility, of
       confusion."); MJ & Partners Restaurant, L.P. v. Zadikoff,
       

, 926-27 (N.D. Ill. 1998) ("[P]laintiff
       must prove a `likelihood' of confusion, not a mere
       `possibility' of confusion."); Knaack Mfg. Co. v. Rally
       Accessories, Inc., 

, 999 (N.D. Ill. 1997)
       (same); Hooker v. Columbia Pictures Indus., Inc. , 551 F.
       Supp. 1060, 1064-65 (N.D. Ill.1982) ("There must be a
       likelihood, and not a mere possibility, of confusion.")
       (quoting Instrumentalist Co. v. Marine Corps League,
       

, 331 (N.D. Ill. 1981)).

Eighth Circuit:

       Children's Factory, Inc. v. Benee's Toys, Inc. , 

, 494 (8th Cir. 1998) ("In order to find a likelihood
       of confusion, this court has stated that `there must be
       a substantial likelihood that the public will be
       confused.' Actual confusion is not essential to afinding
       of infringement. The mere possibility of confusion,
       however, is not enough.") (citations omitted); Vitek Sys.,
       Inc. v. Abbott Labs., 

, 192 (8th Cir. 1982)
       ("However, a mere possibility is not enough; there must
       be a substantial likelihood that the public will be
       confused.") (quoting Fisher Stoves, Inc. v. All Nighter
       Stove Works, Inc., 

,194 (lst Cir. 1980));
       U.S. Jaycees v. Commodities Magazine, Inc., 661 F.
       Supp. 1360, 1363 (N.D. Iowa 1987); Omaha Nat'l Bank
       v. Citibank, N.A., 

, 234 (D. Neb.
       1986).

                               27
Ninth Circuit:

       Rodeo Collection, Ltd. v. West Seventh, 812 F.2d
       1215,1217 (9th Cir. 1987) ("Likelihood of confusion
       requires that confusion be probable, not simply a
       possibility."); First Brands Corp. v. Fred Meyer, Inc.,
       

, 1384 (9th Cir. 1987) ("While the
       possibility of confusion almost always exists, the test is
       likelihood of confusion."); HMH Publ'g Co. v. Brincat,
       

, 717 (9th Cir. 1974) ("We commence by
       emphasizing that the mere possibility that the public
       will be confused with respect to HMH's sponsorship of
       appellant's products is not enough. There must exist a
       likelihood that such confusion will result."); HMH
       Publ'g Co. v. Lambert, 

, 598 (9th Cir.
       1973) ("The test is not that there might be a`possibility
       of confusion as to the source of plaintiffs' and
       defendants' business, but rather whether there is a
       likelihood of confusion."); Carter-Wallace, Inc. v. Procter
       & Gamble Co., 

, 804 (9th Cir. 1970) ("The
       most this court could say is that there might be a
       possibility of confusion ... there is certainly no
       likelihood of such confusion.").

Tenth Circuit:

       Buca, Inc. v. Gambucci's, Inc., 

,
       1211 (D. Kan. 1998) ("Establishing `a potential' for
       confusion is insufficient; plaintiff must demonstrate `a
       likelihood' of confusion."); United States Surgical Corp.
       v. Orris, Inc., 

, 1209 (D. Kan 1998)
       (plaintiff "must show a probability, not just a
       possibility, of confusion"). Federal Circuit: Bongrain
       Int'l (American) Corp. v. Delice de France, Inc., 

, 1486 (Fed. Cir. 1987) ("The statute refers to
       likelihood, not the mere possibility, of confusion.").

A True Copy:
Teste:

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

                               28