Filed: May 24, 2004
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 5-24-2004 Kos Pharm Inc v. Andrx Corp Precedential or Non-Precedential: Precedential Docket No. 03-3977 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Kos Pharm Inc v. Andrx Corp" (2004). 2004 Decisions. Paper 649. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/649 This decision is brought to you for free and open access by the Opini
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 5-24-2004 Kos Pharm Inc v. Andrx Corp Precedential or Non-Precedential: Precedential Docket No. 03-3977 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Kos Pharm Inc v. Andrx Corp" (2004). 2004 Decisions. Paper 649. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/649 This decision is brought to you for free and open access by the Opinio..
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Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
5-24-2004
Kos Pharm Inc v. Andrx Corp
Precedential or Non-Precedential: Precedential
Docket No. 03-3977
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
Recommended Citation
"Kos Pharm Inc v. Andrx Corp" (2004). 2004 Decisions. Paper 649.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/649
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PRECEDENTIAL Richard W. Young (Argued)
Liisa M. Thomas
UNITED STATES COURT OF Nicole M. Murray
APPEALS Gardner Carton & Douglas LLP
FOR THE THIRD CIRCUIT 191 N. Wacker Drive, Suite 3700
Chicago, Illinois 60606
No. 03-3977 Mark S. Olinsky
James M . Hirschhorn
Sills Cummis Radin Tischman Epstein &
KOS PHARM ACEUTICALS, INC., Gross, P.A.
One Riverfront Plaza
Appellant Newark, New Jersey 07102-5400
v. Attorneys for Appellant
ANDRX CORPORATION; ANDRX Allyn Z. Lite (Argued)
LABORATORIES, INC. Joseph J. DePalma
Michael E. Patunas
Lite DePalma Greenberg & Rivas, LLC
Two Gateway Center, 12th Floor
On Appeal from the United States Newark, New Jersey 07102
District Court for the
District of New Jersey James V. Costigan
(District Court No. 03-cv-03714) Martin P. Endres
District Court Judge: Honorable Dennis Kathleen A. Costigan
M. Cavanaugh Hedman & Costigan, P.C.
1185 Avenue of the Americas
New York, New York 10036
Argued: March 9, 2004
Attorneys for the Appellees
Before: SLOVITER, NYGAARD,
Circuit Judges, and OBERDORFER,*
District Judge. OPINION OF THE COURT
(Opinion Filed: May 24, 2004)
OBERDORFER, Senior District Judge.
This is an appeal from the denial of
*
The Honorable Louis F. Oberdorfer, preliminary relief in a trademark
Senior District Judge for the District of infringement action. Plaintiff-appellant
Columbia, sitting by designation. Kos Pharmaceuticals, Inc. (“Kos”) owns
the mark ADVICOR, which it uses in drug, Advicor. 1
connection with cholesterol-altering drugs
Shortly after Kos began marketing
available by prescription. Kos sought a
Advicor, it learned that Andrx planned to
preliminary injunction preventin g
use the mark ALTOCOR for its own new
defendants-appellees Andrx Corporation
anticholesterol medication, which would
and Andrx Laboratories, Inc. (collectively,
contain only a single active ingredient, an
“Andrx”) from using the mark ALTOCOR
extended-release form of lovastatin, in
in connection with sales of Andrx’s own
varying strengths (10, 20, 40 or 60
cholesterol-altering prescription drugs.
milligrams). Andrx announced on January
The district court denied the requested
31, 2002 that it had received preliminary
relief, and this appeal followed. Because
marketing approval for Altocor from the
the denial of the preliminary injunction
United States Food and Dru g
was premised on legal errors, we reverse.
Administration (the “FDA”). On February
We remand the case to the district court
5, 2002, the PTO published for opposition
with directions to enter a preliminary
the ALTOCOR mark, which Andrx had
injunction on an expedited basis.
applied to register in December 2000.
I. BACKGROUND
Kos tried to dissuade or otherwise
Unless otherwise noted, the prevent Andrx from using the ALTOCOR
following facts are undisputed. On mark several times, both before and after
October 3, 2000, Kos filed an application Andrx began selling its new drug. On
with the United States Patent and April 1, 2002, Kos wrote to Andrx that, in
Trademark Office (the “PTO”) to register its view, the proposed use of the mark
ADVICOR as the mark for a new ALTOCOR “would constitute trademark
m e d i c a t ion designed to improve infringement and unfair competition.” JA
cholesterol levels. This new drug at 273. It advised Andrx to “refrain from
combines 20 milligrams of lovastatin using ALTOCOR or any other mark which
(which lowers LDL, or “bad” cholesterol) is likely to cause confusion with
with varying strengths (500, 750, or 1000 A D V I CO R f o r p h ar m aceutic al
milligrams) of an extended-release preparations.” Id. Kos described its prior
formulation of niacin (which increases use of ADVICOR for its own cholesterol-
HDL, or “good” cholesterol). Kos has altering medication and stated further that:
been selling its proprietary extended-
If Andrx were to use the
release form of niacin under the trade
name Niaspan since 1997. In July 2001
Kos began advertising, and in December 1
To distinguish the marks from the
2001 began selling, its new combination
drugs they identify, we use all capital
letters to refer to the marks, but capitalize
only the first letter when referring to the
drugs.
2
mark ALTOCOR for Kos also expressed its concerns
[the described] about potential confusion to the FDA
pha r m a c e utical division responsible for reviewing
preparations, proposed new drug names from a public
consumers and health perspective, the Office of Drug
m e d i c a l Safety’s Division of Medication Errors and
professionals would Technical Support (the “Division of
inevitably believe Medication Errors”). The Division of
that Andrx’s product Medication Errors had preliminarily
originates with or is approved the name Altocor in November
authorized by, 2001.3 At that time, the Division stated
sponsored by, or in that the “name Advicor looks and sounds
some way connected similar [to] Altocor,” but concluded that
with Kos and its the “difference in the written strengths” of
A D V I C O R the drugs reduced the risk of “error . . .
p h a r m a ceutical between the two products.” Id. at 269.
products. . . . The After Kos learned of the preliminary
similarity betw een approval, it sent a letter to the FDA, dated
the marks and the March 6, 2002, stating that it was
goods may create “concerned that the similarity in the
confusion among proprietary names of these two products
health care may create confusion among health care
practitioners in terms practitioners in terms of both prescribing
of both prescribing and dispensing these medications.” Id. at
a n d dispen s i n g, 250.
resulting in
In April 2002, the Division of
d a n g e r o u s
Medication Errors reiterated its opinion
medication errors.
that “the difference in the strengths
Id. at 272-73. A similar letter followed on (combination vs. single) will help ensure
April 15, 2002.
Id. at 362. Andrx that medication errors do not occur
responded to neither letter. 2 between the two products.”
Id. at 261. At
the same time, however, it concluded that
“the name, Altocor, [is] no longer
2
At oral argument, counsel for
Andrx -- apparently and inexplicably
3
unaware of these letters -- incorrectly The Division of Medication
stated that Kos did not inform Andrx Errors was then known as the Office of
directly of its view that Andrx’s Post-Marketing Drug Risk Assessment.
proposed mark was confusingly similar For ease of reference, we use the current
to its own before Altocor went to market. name.
3
acceptable due to the potential for opposition is susp ende d pen din g
confusion with” a third, unrelated drug. disposition of this civil litigation.
Id. at 258. When Andrx objected to
In July 2002, Andrx began
changing the name of its product, the
marketing Altocor. Thereafter, Kos
Division of Medication Errors, while “not
“advised Andrx of the growing number of
recommend[ing] the use of the proposed
instances of actual confusion” on multiple
name, Altocor,” gave conditional approval
occasions. Id. at 75. For example, on
to using the name so long as Andrx
January 10, 2003, Kos sent Andrx’s
“commit[ed] to submitting all potential
counsel a chart “setting forth . . .
and actual errors involving Altocor . . .
occurrences of actual consumer confusion”
[and] to changing the proprietary name,
reported to it. Id. at 368. On February 20,
Altocor, if two or more reports of actual
2003, Kos sent an updated chart, entitled
errors occur.” Id. at 256.4
“Summary of Confusion Involving
Kos next raised its concerns with Advicor and Altocor,” that listed 39
the PTO. In May 2002, Kos filed an discrete instances of purported confusion.
opposition to Andrx’s application to Id. at 304-08 (listing incidents between
register the mark ALTOCOR. Some September 2, 2002 and February 12,
discovery has been conducted in that 2003).
proceeding, but no decision has been
In the meantime, on December 5,
issued. According to the PTO docket, the
2002, Andrx filed with the FDA a
“supplemental new drug application
4
propos[ing] three alternate proprietary
The precise terms of the
names” for Altocor. Id. at 380. On April
conditional FDA approval are in some
11, 2003, Andrx filed an application with
dispute, but are only tangentially relevant
the PTO to register the mark ALTOPREV.
to issues raised here. Andrx claims it
And Andrx’s 2002 Annual Report, issued
needed to change its mark only if there
in the spring of 2003, stated:
were four actual errors the first year
Altocor was sold, and then only if the Andrx’s application for a
errors were between Altocor and the registered trademark for
unrelated drug about which the FDA Altocor has been opposed
expressed concern. JA at 345 (citing a by Kos Pharmaceuticals,
letter Andrx sent the FDA shortly before who alleges that there is a
the April 2002 Division of Medication likelihood of confusion
Errors document was issued). In that between Kos’ trademark,
letter, however, Andrx agreed to “submit Advicor, and Altocor.
all reports” of medication errors “related Andrx has requested FDA
to Altocor” that it receives, not just those guidance on other names,
involving Altocor and one particular and may seek to change the
drug. Id. at 348. name of Altocor.
4
Id. at 374. The FDA approved Andrx’s issue here. Neither party requested an
supplemental application on August 20, opportunity to adduce oral testimony on
2003, stating that “the proprietary name, the application.
Altoprev, is acceptable.”
Id. at 380.5
The documentary evidence before
By August 2003, Kos had spent the district court included the following:
more than $ 40 million on promotion and
Evidence Regarding Actual
advertising, and Advicor had been
Confusion
prescribed more than 350,000 times,
grossing approximately $ 70 million in Kos submitted the Certification of
sales. Andrx had spent more than $ 21 its Vice President of Marketing, Aaron
million on promotion and advertising, and Berg, dated August 5, 2003 (“Berg
Altocor had been prescribed more than Certification”), 6 which stated, inter alia,
300,000 times, grossing more than $ 27 that Andrx’s use of the mark ALTOCOR
million. has caused confusion. Berg further stated
that “over 60 instances of actual confusion
On August 6, 2003, Kos filed a
between the two drugs have been
verified complaint, claiming that Andrx’s
documented and reported to [him] by [his]
use of the mark ALTOCOR on its
staff,” including “six patients [who]
anticholesterol drugs constituted trademark
received the wrong medication, either
infringement and unfair competition under
because they had been given a sample of
the federal Lanham Act, and under state
one drug instead of the other, or because a
and common law equivalents. Kos
pharmacist filled a prescription with the
accompanied the complaint with the
wrong drug.” Id. at 69. Based on his
application for a preliminary injunction at
“personal knowledge or [his] review of the
business records of Kos,” Berg described
5
Andrx claims that it no longer has “representative . . . instances” of the
FDA approval to use this name, but incidents reported to him. Id. at 68, 71.
submitted no evidence to support that These included, for example, doctors
claim. complaining to Kos representatives about
the pricing or insurance coverage of
According to records available on Advicor, when their complaints were in
the PTO website, a Notice of Allowance fact about Altocor, as well as medical
for the ALTOPREV mark was issued on professionals identifying Altocor samples
February 24, 2004. We may take judicial
notice of such public records. See, e.g.,
6
Hoganas AB v. Dresser Indus., Inc., 9 Andrx challenged the
F.3d 948, 954 n.27 (Fed. Cir. 1993); admissibility and probative value of the
Standard Havens Prods., Inc. v. Gencor Berg Certification. JA at 41-44. The
Indus., Inc., 897 F.2d 511, 514 n.3 (Fed. district court never ruled on Andrx’s
Cir. 1990). objection.
5
as Adv i co r s am p le s, Altocor doing well on the Advicor .
representatives as Advicor representatives, . . no reason to change!
A l t o c o r c o nfere nces as A dvic o r
Id. at 340. Andrx also countered the Berg
conferences, and vice versa.
Certification with the declaration of its
Andrx submitted excerpts from Vice President for Regulatory Affairs,
Berg’s deposition testimony, taken on June Nicholas Farina, whose job requires him to
12, 2003 in the PTO opposition report to the FDA “every incidence of
proceeding. There, Berg said he had not actual confusion” involving Andrx in
had “direct contact” with the medical which “a product other than the one
professionals involved in any of the prescribed by a physician is dispensed by
reported incidents of confusion, but had a pharmacist and the patient leaves the
learned of those incidents primarily pharmacy.” Id. at 345. Farina said no
through voice-mail or e-mail.
Id. at 291. such incidents relating to Altocor had been
Andrx contrasted Berg’s characterization reported to Andrx as of the date of his
of one incident -- where, Berg said, a declaration, August 26, 2003.
Id. at 346.
patient whose “condition was improving .
Medical Evidence
. . asked his cardiologist for more of the”
Advicor his doctor had prescribed, but the The parties submitted competing
“cardiologist refilled the prescription with medical affidavits to support their
Altocor,” id. at 71 -- with the following respective views as to the nature and
more detailed description of the same severity of potential consequences of mis-
incident, sent to Berg by e-mail: filled prescriptions.7 Per Kos, niacin --
and thus Advicor, but not Altocor -- may
[A doctor] said that he had a
cause serious injury, or even death, to
patient that he had put on
patients with various conditions or
Advicor and when he went
sensitivities to the drug. Other, less
to his cardiologist, . . . he
serious, side effects of niacin may worry
was due for a refill on
patients who have not been warned of
Advicor. The patient
those effects, and who may thus
returned . . . and [the doctor]
discontinue needed treatment. Patients
notice[d] that the medicine
who mistakenly receive Altocor rather
listed was not Advicor, but
Altocor! . . . [T]he patient
told him that [th e 7
Kos initially relied on the Berg
cardiologist] renewed his
Certification for these medical issues, but
Rx. [The doctor] did not
supplemented this -- at the hearing --
question [the cardiologist]
with a physician’s certification. The
directly . . . ‘not my place to
district court’s order, issued the day after
? a cardiologist’. Up to that
the hearing, mentions only the initial
point, the patient had been
certification.
6
than Advicor are also at risk, says Kos, ALTOCOR was one of many . . .
since the conditions the niacin is meant to generated by” an outside firm. Id. at 342.
address will remain untreated. Andrx, on
the other hand, claims that the “safety
profile of both products is similar” and that
there need not be “any unusual concern”
about “harm to the public if the Andrx
product is substituted for the KOS
product.”
Id. at 226.
Evidence Regarding Adoption of
Marks
The Berg Certification also
addressed selection of the ADVICOR and
ALTOCOR marks. Berg stated that Kos
chose ADVICOR as “a fanciful, made-up
name” that would be “an unusual,
distinctive name to make the drug stand
out to doctors as unique.” Id. at 73. He
asserted that a former Kos product
manager, Charles Schneider, “who was
actively participating in [Kos’s] naming
initiative” left Kos for Andrx during the
“naming process.”
Id. at 73-74. Kos
submitted an e-mail, sent to Schneider
before his departure, that listed 42 possible
names that it was considering, of which 12
-- including ADVICOR and AVICOR --
were “already picked” by it as possible
names, and asked Schneider and one other
Kos employee to select ten “back up
names.”
Id. at 356-57. Berg said Andrx
then applied to register “two closely
similar trademarks: AVICOR and
ALTOCOR” “[a]lmost immediately after”
Schneider arrived there.
Id. at 74. Andrx
submitted a declaration from Schneider
stating that he “was never involved with
nor aware of the selection of the name
AD VICO R,” and that the “name
7
Evidence R egarding Other court held that Kos had not shown that it
Proceedings was likely to succeed on the merits, and
found, based in large part on its negative
Andrx submitted letters Kos sent
assessment of Kos’s likelihood of success,
the European Community Trademark
that Kos did not satisfy the other
Office in support of its application to
prerequisites for extraordinary relief. Kos
register ADVICOR over the mark
filed this interlocutory appeal, and we
ACTIVOR, which was being used, not on
granted Kos’s request for an expedited
prescription anticholesterol drugs, but
appeal schedule.
rather on over-the-counter “stimulants and
preparations used to build up vitality.” Id. II. LEGAL STANDARDS AND
at 329, 333. Kos argued there, inter alia, JURISDICTION
that (1) the “opening syllable[s]” of the
The test for preliminary relief is a
marks (AD v. AC) are “not identical,”
familiar one. A party seeking a
which is important “since attention to a
preliminary injunction must show: (1) a
polysyllabic word is normally focused on
likelihood of success on the merits; (2) that
the beginning,” id. at 328; (2) neither the
it will suffer irreparable harm if the
middle (VI v. TI) nor final (COR v. VOR)
injunction is denied; (3) that granting
syllables are identical; (3) the “suffix COR
preliminary relief will not result in even
. . . is very common in the pharmaceutical
greater harm to the nonmoving party; and
Class 5 category,” id. at 329; (4) the
(4) that the public interest favors such
“functions [of the products] do not
relief. Allegheny Energy, Inc. v. DQE,
overlap,” id.; (5) “there is little chance that
Inc., 171 F.3d 153, 158 (3d Cir. 1999).
any doctor would confuse a prescription
Preliminary injunctive relief is “an
cholesterol altering medication with an
extraordinary remedy” and “should be
over the counter product,” or that a
granted only in limited circumstances.”
“qualified pharmacist” would do so, id. at
American Tel. & Tel. Co. v. Winback &
333; and (6) “the channels of distribution,
Conserve Program, Inc., 42 F.3d 1421,
method of purchase and the targeted
1427 (3d Cir. 1994) (quotation omitted).
customer is different in relation to the two
“[O]ne of the goals of the preliminary
products,” id.
injunction analysis is to maintain the status
On September 17, 2003, after quo, defined as the last, peaceable,
hearing argument, the district court denied noncontested status of the parties.”
Kos’s application for a preliminary Opticians Ass’n of Am. v. Indep.
injunction from the bench. The court Opticians of Am., 920 F.2d 187, 197 (3d
issued a supplemental memorandum the Cir. 1990) (citation and quotation
following day that incorporated the omitted); see also 5 J. Thomas McCarthy,
“reasons . . . stated on the record during McCarthy on Trademarks and Unfair
oral argument” and provided additional Competition § 30:50 (4th ed. 2003) (“The
reasons for its decision.
Id. at 13. The status quo to be preserved is not the
8
situation of contested rights . . . . In a appeal pursuant to 15 U.S.C. § 1121(a)
trademark case, [it] is the situation prior to and 28 U.S.C. § 1292(a).
the time the junior user began use of its
III. LIKELIHOOD OF SUCCESS ON
contested mark: the last peaceable, non-
THE MERITS
contested status.”).
To prevail on a claim for trademark
We review the denial of a
infringement or unfair competition under
preliminary injunction for “an abuse of
the Lanham Act, the owner of a valid and
discretion, an error of law, or a clear
legally protectable mark, such as Kos,
mistake in the consideration of proof.”
must show that a defendant’s use of a
Winback, 42 F.3d at 1427 (quotation
similar mark for its goods “causes a
omitted). “[A]ny determination that is a
likelihood of confusion.” A & H
prerequisite to the issuance of an
Sportswear, Inc. v. Victoria’s Secret
injunction . . . is reviewed according to the
Stores, Inc., 237 F.3d 198, 210 (3d Cir.
standard applicable to that particular
2000). 8 This Court has adopted a non-
determination.” Id. (second alteration in
exhaustive list of factors to consider in
original, quotation omitted). “Thus, we
evaluating likelihood of confusion,
exercise plenary review over the district
commonly referred to as the “Lapp
court’s conclusions of law and its
factors.” See Interpace Corp. v. Lapp,
application of law to the facts, but review
Inc., 721 F.2d 460, 463 (3d Cir. 1983).
its findings of fact for clear error, which
These factors were developed for cases
occurs when we are left with a definite and
involving non-competing products. Id. at
firm conviction that a mistake has been
committed.” Duraco Prods., Inc. v. Joy
8
Plastic Enters., Ltd., 40 F.3d 1431, 1438 See 15 U.S.C. § 1114(1)(a)
(3d Cir. 1994) (citations and quotation (defining infringement as the
omitted). “Despite oft repeated statements unauthorized use of a “colorable
that the issuance of a preliminary imitation of a registered mark in
injunction rests in the discretion of the trial connection with the sale, offering for
judge[,] whose decisions will be reversed sale, distribution or advertising of any
only for ‘abuse,’ a court of appeals must goods or services on or in connection
reverse if the district court has proceeded with which such use is likely to cause
on the basis of an erroneous view of the confusion, or to cause mistake, or to
applicable law.” Apple Computer, Inc. v. deceive”); 15 U.S.C. § 1125(a)(1)
Franklin Computer Corp.,
714 F.2d 1240, (creating cause of action for use “in
1242 (3d Cir. 1983) (quotation omitted). connection with any goods . . . [of] any
word, term [or] name . . . likely to cause
The district court had original
confusion, or to cause mistake, or to
jurisdiction pursuant to 15 U.S.C. §
deceive as to . . . the origin, sponsorship,
1121(a) and 28 U.S.C. § 1338, and we
or approval of [those] goods . . . by
have jurisdiction over this interlocutory
another person”).
9
462. Although we have held that courts same channels of trade and
“‘need rarely look beyond the mark itself’” advertised through the same
in cases involving competing goods, we media;
recently recognized that “consideration of
(8) the extent to which the
the Lapp factors . . . can be quite useful for
targets of the parties’ sales
determining likelihood of confusion even
efforts are the same;
when the goods compete directly.” A &
H, 237 F.3d at 212 (quoting Lapp, 721 (9) the relationship of the
F.2d at 462). Because some of the initial goods in the minds of
Lapp factors were “not apposite for consumers, whether because
directly competing goods,” we “adapted of the near-identity of the
[them] to make them applicable whether products, the similarity of
the products directly compete or not.”
Id. function, or other factors;
at 212-13. As adapted, the factors are:
(10) other facts suggesting
(1) the degree of similarity that the consuming public
between the owner’s mark might expect the prior
and the alleged infringing owner to manufacture both
mark; products, or expect the prior
owner to manufacture a
(2) the strength of the
product in the defendant’s
owner’s mark;
market, or expect that the
(3) the price of the goods prior owner is likely to
and other factors indicative expand into the defendant’s
of the care and attention market.
expected of consumers
Id. at 215. “None of these factors is
when making a purchase;
determinative in the likelihood of
(4) the length of time the confusion analysis and each factor must be
defendant has used the mark weighed and balanced one against the
without evidence of actual other.” Checkpoint Sys., Inc. v. Check
confusion arising; Point Software Techs., Inc., 269 F.3d 270,
280 (3d Cir. 2001). Each factor is
(5) the intent of the
“weighed . . . separately,” which “is not to
defendant in adopting the
say that all factors must be given equal
mark;
weight.” Fisons Horticulture, Inc. v.
(6) the evidence of actual Vigoro Indus., Inc., 30 F.3d 466, 476 &
confusion; n.11 (3d Cir. 1994). “[T]he different
factors may properly be accorded different
(7) whether the goods,
weights depending on the particular factual
competing or not competing,
setting. A district court should utilize the
are marketed through the
10
factors that seem appropriate to a given
situation.” A & H, 237 F.3d at 215. The
Lapp factors are best understood as “tools
to guide a qualitative decision.”
Id. at 216.
Here, the district court held that two
of the factors -- strength of the owner’s
mark, and the extent to which the parties’
sales efforts are the same -- favored Kos,
but that “the remaining Lapp factors do
not.” JA at 10-11. The court found
“[s]uccess on these two Lapp factors . . .
insufficient to persuade [it] that confusion
is likely to occur.”
Id. at 9. It further
found that Kos “failed to convince [it] that
the selective consumers in this case,
physicians and pharmacists, will suffer
from a likelihood of confusion.”
Id. at 9.
The opinion analyzed only the two factors
the court found weighed in Kos’s favor.
As to the remaining factors, the court said
only that, “[a]fter carefully evaluating the
Lapp test in its entirety, [it] concludes that
there is no likelihood of confusion.”
Id. at
11.
We recognize that district courts
must exercise their discretion on an
expedited basis in deciding whether to
grant preliminary relief. Although we
ordinarily defer to that discretion, we
cannot do so if it was exercised under a
mistaken view of the law. Here, two
fundamental errors of law taint the district
court opinion: (1) the court used an overly
narrow definition of confusion, in effect
evaluating the likelihood of misdispensing
rather than confusion; (2) the court did not
properly analyze or weigh the Lapp
factors.
11
First, the hearing transcript betrays pharmacist cannot fill the
a focus on whether prescriptions are likely wrong prescription. It’s
to be mis-filled, to the apparent exclusion impossible to fill the wrong
of all other types of confusion with which prescription.
the Lanham Act is concerned. For
THE COURT: That’s my
example:
point: . . . that because of
MR. YOUNG [Counsel for the types of dosages, if they
Kos]: . . . The Lanham Act have the wrong name, if
doesn’t require they have a name with the
misdispensing. What we wrong dos age , they
have seen is, a lot of doctors wouldn’t . . . be able to fill
are saying -- that prescription.
THE COURT: Yes, but MR. LITE: T h a t ’ s
misdispensing is the basis absolutely correct, Your
for confusion. Honor.
MR. YOUNG: That’s THE COURT: So there
p o w erf ul evidence of can’t be confusion, you’re
confusion. But what’s also saying.
happening in the
MR. LITE: Well, I don’t
marketplace is, doctors are
t h i n k t h e r e ca n b e
saying, Look, I’m not going
confusion. There can’t,
to prescribe either drug
certainly, be confusion in
because I can’t keep them
the prescribing or
straight. . . .
dispensing of these drugs. .
... ..
THE COURT: Well, if that Id. at 39-40. Much of the balance of the
were the case, then I guess colloquy focused on the possibility, and
there’s no concern about potential danger, of misdispensing.9 As
adverse health effects to the
patient, because they’re not
9
getting the wrong drug; The court’s extensive focus on
they’re getting another drug misdispensing may reflect consideration
that the doctor wants them of Kos’s “public interest” argument (that
to have. the chance of serious injury made
preliminary relief essential) as well as a
JA at 52 (emphasis added). Similarly:
narrow view of the element of confusion.
MR. LITE [Counsel for See, e.g., JA at 20:20; id. at 21:3-22; id.
Andrx]: . . . A prudent at 25:4-14,
id. at 31:4-33:20; id. at 34:5-
12
noted above, the district court opinion The Act is now broad enough to
incorporates the reasons articulated by the cover “the use of trademarks which are
court at oral argument. These statements likely to cause confusion, mistake, or
are thus a powerful indicator that the deception of any kind, not merely of
court’s “likelihood of confusion” analysis purchasers nor simply as to source of
rested substantially, if not entirely, on origin.” Syntex Labs., Inc. v. Norwich
misdispensing as the confusion at issue. Pharmacal Co., 437 F.2d 566, 568 (2d Cir.
This is not the law. It is clear error to treat 1971) (emphasis added); see, e.g.,
misdispensing as the only relevant Lanham
Checkpoint, 269 F.3d at 295 (overly
Act confusion. narrow view of confusion “would
undervalue the importance of a company’s
The Lanham Act defines trademark
g o o d w i l l w i th it s c u st om e r s ” );
infringement as use of a mark so similar to
Morningside Group Ltd. v. Morningside
that of a prior user as to be “likely to cause
Capital Group, L.L.C., 182 F.3d 133, 141
confusion, or to cause mistake, or to
(2d Cir. 1999) (reversing due to lower
deceive.” 15 U.S.C. § 1114(1).
court’s use of “inordinately narrow
Likelihood of confusion under the Lanham
definition of actual confusion” that
Act is not limited to confusion of products,
ignored “actual confusion regarding
as in misdispensing. Confusion as to
affiliation or sponsorship”); Meridian
source is also actionable. See, e.g., Fisons,
Mutual Ins. Co. v. Meridian Insurance
30 F.3d at 472 (“[L]ikelihood of confusion
Group, Inc., 128 F.3d 1111, 1118 (7th Cir.
. . . exists when the consumers viewing the
1997) (context of confusion “immaterial”
mark would probably assume that the
because any injury to goodwill or loss of
product . . . it represents is associated with
control over reputation is actionable);
the source of a different product . . .
Champions Golf Club, Inc. v. Champions
identified by a similar mark.”) (quotation
Golf Club, Inc., 78 F.3d 1111, 1119-20
omitted). We recently described how the
(6th Cir. 1996) (relevant evidence of
1962 amendments to the Lanham Act
confusion goes beyond purchaser
broadened the scope of trademark
confusion and includes “confusion among
protection beyond the traditional source-
nonpurchasers” in order to “protect the
of-origin confusion. Checkpoint, 269 F.3d
manufacturer’s reputation”); Fuji Photo
at 295 (citing deletion of the phrase
Film Co. v. Shinohara Shoji Kabushiki
“purchasers as to the source of origin of
Kaisha, 754 F.2d 591, 596 (5th Cir. 1985)
such goods or services” from the end of
(actionable confusion includes any use
the former definition, which now reads
“likely to confuse purchasers with respect
“likely to cause confusion, or to cause
to . . . [a product’s] endorsement by . . ., or
mistake, or to deceive”).
its connection with[,] the plaintiff”).
Second, the district court failed to
13; id. at 35:4-36:20; id. at 37:19-40:15; “employ all the relevant Lapp factors and
id. at 42:10-18; id. at 48:16-52:25. weigh each factor to determine whether in
13
the totality of the circumstances When reviewing an order that does
marketplace confu sio n is like ly.” not adequately support the resolution of a
Checkpoint, 269 F.3d at 296 (emphasis motion for preliminary injunction, we may
added). Despite recognizing that “‘each vacate and remand for additional findings
factor must be weighed and balanced,’” or may “first look[] to see whether the
the court did not perform the requisite record provides a sufficient basis to
weighing and balancing on the record. JA ascertain the legal and factual grounds for
at 8 (quoting Checkpoint, 269 F.3d at the grant or denial of the injunction.”
280). The Lapp test is not a mechanistic Bradley v. Pittsburgh Bd. of Educ., 910
one. It need not be “followed precisely so F.2d 1172, 1178 (3d Cir. 1990). Although
long as the relevant comparisons suggested a district court’s application of an incorrect
by the test are made.” A & H, 237 F.3d at legal standard “would normally result in a
207. But if a district court finds “certain remand, we need not remand” if
of the Lapp factors are inapplicable or application of the correct standard could
unhelpful in a particular case,” that court
should “explain its choice not to employ
runs afoul of Rule 52(a), which requires
those factors.” Id. at 214 n.8. Here, the
courts to “set forth the findings of fact
court analyzed only two of the ten Lapp
and conclusions of law which constitute
factors -- both of which it found favored
the grounds” for “granting or refusing
Kos. The court’s conclusory statement
interlocutory injunctions.” Fed. R. Civ.
that “the remaining Lapp factors do not
P. 52(a). “[F]air compliance with Rule
[weigh in Petitioner’s favor],” JA at 10-11,
52(a)” is “of the highest importance to a
does not explain the basis for its holding as
proper review of the action of a court in
to each factor, whether it viewed each as
granting or refusing a preliminary
neutral, irrelevant, or favorable to Andrx,
injunction.” Mayo v. Lakeland
or how it weighed and balanced the
Highlands Canning Co., 309 U.S. 310,
combined factors. The opinion thus does
316 (1940). A district court’s factual
not make the “relevant comparisons”
findings and legal conclusions must
which the Lapp test identifies. Compare
“explain the basis for” and “permit
Fisons, 30 F.3d at 481 (reversing because
meaningful review of its ruling.” Elliott
“district court misapplied some [Lapp
v. Kiesewetter, 98 F.3d 47, 55 (3d Cir.
factors] and did not consider others”) with
1996) (quotation omitted). “[T]he
A& H, 237 F.3d at 215-16 (affirming since
conclusions of law must carefully
“ostensibly missing Lapp factors appear to
enunciate and explain the trial court’s
be incorporated into the District Court’s
resolution of questions of law, so that the
test,” which was “functionally similar to
appellate court is able to conduct a just
the Lapp test”).10
and orderly review of the rights of the
parties.” 9 James Wm. M oore et al.,
10
The court’s failure to explain its Moore’s Federal Practice § 52.15[3] (3d
conclusions as to each Lapp factor also ed. 2000).
14
support only one conclusion. Duraco mark similarity.” A & H, 237 F.3d at 216;
Prods., Inc. v. Joy Plastic Enters., Ltd., 40 see also
id. at 214 (“[W]hen goods are
F.3d 1431, 1451 (3d Cir. 1994) (affirming directly competing, both precedent and
denial of preliminary injunction where common sense counsel that the similarity
plaintiff could not demonstrate likelihood of the marks takes on great prominence.”).
of success even “with the evidence viewed Marks “are confusingly similar if ordinary
in the light most favorable to it”); see also consumers would likely conclude that [the
Opticians, 920 F.2d at 198; Lapp, 721 F.2d two products] share a common source,
at 460 (reversing and directing entry of affiliation, connection or sponsorship.”
judgment). Our holding in Opticians is
Fisons, 30 F.3d at 477. The proper test is
instructive. There, we reversed due to “not side-by-side comparison” but
legal error and went on to assess the “whether the labels create the same overall
likelihood of confusion, which the district impression when viewed separately.”
Id.
court had not addressed.
Id. at 194-95 (quotation and citation omitted). Courts
(“Likelihood of confusion is a fact should “compare the appearance, sound
normally reviewable under the clearly and meaning of the marks” in assessing
erroneous standard. Our review, however, their similarity. Checkpoint, 269 F.3d at
is plenary since there is no dispute as to 281 (quotation omitted). There is no
the facts relevant to this issue.”). Rather simple rule as to when marks are too
than remanding for the district court to similar. “The degree of similarity . . .
exercise its discretion in the first instance, needed to prove likely confusion will vary
we determined that plaintiff had made all with the difference in the goods . . . of the
necessary showings on the undisputed parties. Where the goods . . . are directly
facts of record and directed entry of a competitive, the degree of similarity
preliminary injunction.
Id. at 196-98. required to prove a likelihood of confusion
is less than in the case of dissimilar
Here, we will review the findings
products.” 3 McCarthy, supra, § 23:20.1.
and conclusions of the district court and
the factual assertions and contentions of The district court made no findings
the parties in light of the controlling legal as to the degree of similarity of the
principles to see whether the facts and law ADVICOR and ALTOCOR marks; it
compel a particular result. If so, it would merely concluded that this factor does not
be a waste of judicial resources to remand favor Kos.
for reweighing.
The facts predicate to this analysis
A. The Individual Lapp Factors are manifest and undisputed. The facial
similarity of the marks is apparent “on
1. Degree of Similarity of the
their face.” Both are seven-letter, three-
Marks
syllable words that begin and end with the
“The single most important factor same letters and the same sounds. The
in determining likelihood of confusion is marks are also similar in that both are
15
“coined word[s], not found even in the marks; the overarching question is
approximation in the English or any other whether the marks, “viewed in their
familiar language.” Telechron, Inc. v. entirety,” are confusingly similar. A & H,
Telicon Corp., 198 F.2d 903, 905 (3d
Cir. 237 F.3d at 216 (emphasis added). Cf.
1952). “Fanciful marks are . . . given an
Fisons, 30 F.3d at 478 (“[T]he district
expansive scope of judicial protection . . . court misapprehended the legal standard
as to more variations of format.” 2 when it undertook a detailed analysis of
McCarthy, supra, § 11:6. Two names that the differences in the marks rather than
look and sound similar will naturally seem focusing on the overall impression created
even more similar where there are no by them.”).
differences in meaning to distinguish
Andrx attempts to, but cannot,
them. Nor can the similarity of coined
justify its approach by characterizing
marks be explained by, or ameliorated by
statements Kos made in European
virtue of, any relationship between the
trademark proceedings as “admissions that
marks and the products identified. See,
directly contradict its position before this
e.g., Telechron, 198 F.2d at 909
Court and the district court.” Appellees’
(Defendant “cannot claim that he is
Br. at 10. The European proceeding
exercising the normal privilege of using
involved different marks (ADVICOR v.
ordinary language . . . [in] a case of a first
ACTIVOR), different goods, and different
coined word and a second coined word
legal standards than those at issue here.
resembling it.”); Lambert Pharmacal Co. v.
Kos’s statements in those proceedings
Bolton Chem. Corp., 219 F. 325, 326
show that the material facts are not
(S.D.N.Y. 1915) (Hand, J.) (One who has
equiv alent. For e x a m p l e , K os
“adopt[ed a] . . . trade name, arbitrary in
distinguished Advicor from the over-the-
character, . . . has the right to insist that
counter “stimulants and preparations to
others in making up their arbitrary names
build up vitality” at issue there by arguing,
should so certainly keep away from his
inter alia, that “their functions do not
customers as to raise no question.”).
overlap,” and that they have different
Andrx would differentiate the “channels of distribution, method[s] of
marks by distinguishing what it deems purchase and . . . targeted customer[s].”
unimportant features (namely, “the first JA at 329, 333. More importantly, Kos’s
letter ‘A’ and the suffix ‘COR’”) from claims in those proceedings are all
those that are “salient” (the “first premised on European Community law.
syllables”). Appellees’ Br. at 19-20. Trademark standards do not traverse
Andrx argues that the “first syllables (AD international borders. “The concept of
compared to AL) . . . create a completely territoriality is basic to trademark law;
different sight, sound and impression.” Id. trademark rights exist in each country
at 20 (emphasis added). But the proper solely according to that country’s statutory
legal test is not whether there is some scheme.” Fuji
Photo, 754 F.2d at 599
confusing similarity between sub-parts of (finding it “error to admit evidence of the
16
parties’ foreign trademark practices”); see Second, the PTO has not allowed
also E. Remy Martin & Co. v. Shaw-Ross Andrx to register the ALTOCOR mark.
Int’l Imports, Inc., 756 F.2d 1525, 1531 As stated above, Kos’s opposition remains
(11th Cir. 1985) (district court erred in pending. Andrx’s claim about a favorable
considering status of parties’ marks in PTO determination presumably rests on
France; “Our concern must be the business the examining attorney’s decision
and goodwill attached to United States approving publication of the ALTOCOR
trademarks, not French trademark rights mark for opposition.11 The record contains
under French law.”) (quotation omitted); no information about the basis for the
Vanity Fair Mills v. T. Eaton Co., 234 publication decision or about what
F.2d 633, 639 (2d Cir. 1956) (“[W]hen information was before the examining
trade-mark rights within the United States attorney at that time. Thus, the record
are being litigated in an American court, does not show that the PTO actually
the decisions of foreign courts concerning considered the registrability of ALTOCOR
the respective trade-mark rights of the over ADVICOR, much less that it found
parties are irrelevant and inadmissible.”). the marks not to be confusingly similar.
Cf. Marketing Displays, Inc. v. TrafFix
Andrx also claims that “[t]he FDA
Devices, Inc., 200 F.3d 929, 934 (6th Cir.
and the USPTO have determined that the
1999) (rejecting claim that registration of
marks are not confusingly similar.”
allegedly infringing mark creates inference
Appellees’ Br. at 19. But neither of those
that “the trademark examining attorney at
proceedings can supplant the required
the PTO actually examined the [earlier]
Lanham Act analysis. First, the FDA
mark and found that the [registered] mark
applies a standard different from the
Lanham Act “likelihood of confusion” test
11
at issue here. The FDA reviews proposed We caution that Andrx’s apparent
drug names “to predict potential confusion shorthand characterization of this low-
that may arise in the actual prescription level decision as a PTO determination
process.” 3 McCarthy, supra, § 19:149 seems somewhat misleading, as do such
(emphasis added); see also id. at § 19:150 statements as, for example, “the USPTO
(FDA “likelihood of confusion test [is] approved the mark.” Appellees’ Br. at
wholly distinct from the test employed by 35. Publication of a mark is not
the PTO”). As discussed above, equivalent to its allowance or
misdispensing is not the only type of registration; the PTO issues a Certificate
confusion actionable under the Lanham of Registration only if “all oppositions
Act. Indeed, to the extent that the FDA’s filed” after publication are dismissed. 37
proprietary name review is relevant here, C.F.R. § 2.81. Reference to PTO action
the reviewing division’s statement that the is more naturally understood as
“name Advicor looks and sounds similar allowance (or denial) of an application
[to] Altocor” actually supports Kos’s rather than publication of a mark,
claim. See JA at 269. especially where an opposition is filed.
17
did not infringe it”), rev’d on other receive less protection from strong
grounds, 532 U.S. 23 (2001). Indeed, even infringing marks than weak ones. Indeed,
where the record shows that an examining it might be argued that a stronger junior
attorney has explicitly considered a prior mark is more likely to cause confusion, at
mark, we have held that an “initial PTO least where, as here, both marks are being
determination . . . may be considered [but] used in the same market.
need not be given weight when the PTO
3. Factors Indicative of the
attorney did not review all the evidence
Care and A ttentio n
available to the District Court.” A & H,
Expected of Consumers
237 F.3d at 221 (affirming decision that
gave “no weight” to “low-level The third Lapp factor weighs
preliminary decision” even though against finding a likelihood of confusion
examiner assessed likelihood of confusion “[w]hen consumers exercise heightened
with prior mark). care in evaluating the relevant products
before making purchasing decisions.”
We hold that the district court
Checkpoint, 269 F.3d at 284. The district
clearly erred in failing to recognize that
court held that Kos did not “convince [it]
this factor weighs in Kos’s favor. It does.
that the selective consumers in this case,
2. Strength of the Owner’s physicians and pharmacists, will suffer
Mark from a likelihood of confusion.” JA at 9.
The opinion provided no basis for this
The record supports the district
conclusion, but did incorporate the
court’s finding that this factor weighs in
“reasons . . . stated on the record during
favor of Kos. The court properly analyzed
oral argument.” Id. at 13. There, the
both the conceptual and commercial
judge stated that he thought the differences
strength of the ADVICOR mark. Andrx
in the dosage of each drug made errors in
argues that this factor does not favor Kos
filling prescriptions unlikely. E.g., id. at
because ALTOCOR and ADVICOR are
49 (“[I]t seems to me because of the
similarly distinctive and have similar
dosage that has to be made part of the
strength in the marketplace. But the
prescription that the pharmacist would
relative strength of the Andrx’s mark is not
have to ignore some aspect of such a
relevant here. The second Lapp factor
prescription to make a mistake.”). The
looks to “the strength of the owner’s
court did not analyze the likelihood of any
mark.” Lapp, 721 F.2d at 463 (emphasis
t yp e o f c o n f u s i o n o t h e r t h a n
added). “Under the Lanham Act, stronger
misdispensing.
marks receive greater protection” because
they “carry greater recognition, [so that] a The district court and the parties
similar mark is more likely to cause treated medical professionals, such as
confusion.” A & H, 237 F.3d at 222. It doctors, nurses and pharmacists, as the
would not serve the purposes of the
Lanham Act for trademark owners to
18
relevant consumers. 12 These trained Morgenstern Chem. Co. v. G.D. Searle &
professionals may be expected to be Co., 253 F.2d 390, 393 (3d Cir. 1958)
knowledgeable about, and to exercise care (quotation omitted). “[P]hysicians are not
in distinguishing between, medicines. We immune from confusion or mistake.”
Id.
have emphasized a countervailing concern (quotation omitted); see also Syntex Labs.,
that weighs against allowing the expertise Inc. v. Norwich Pharmacal Co., 437 F.2d
of physicians and pharmacists to trump 566, 569 (2d Cir. 1971) (since confusion
other factors in assessing the likelihood of of prescription drugs “could result in
confusion in drug cases. “Prevention of physical harm to the consuming public,” a
confusion and mistakes in medicines is too “stricter standard in order to prevent
vital to be trifled with” since “[c]onfusion likelihood of confusion seems desirable”).
in such products can have serious Other jurisdictions and a uthorities
consequences for the pa tient.” similarly recognize that “greater care
should be taken to avoid confusion in
12
connection with medications which affect
We note that neither the parties
the health of the patient.” 3A Louis
nor the court below addressed the
Altman, Callman on Unfair Competition,
possible confusion of ultimate
Trademarks & Monopolies § 21:10 & nn.
consumers. While doctors and
121-132 (4th ed. 2003) (collecting cases
pharmacists play a gate-keeping role
and authorities).
between patients and prescription drugs,
they are not the ultimate consumers. In assessing how customer
Patients are. Courts have noted that sophistication should be weighed “[w]ith
drugs are increasingly marketed directly respect to pharmaceuticals,” the “expertise
to potential patients through, for of the physicians and pharmacists may be
example, “ask-your-doctor-about-Brand- outweighed by” this need for heightened
X” style advertising. See, e.g., Puritan- care. Id. at § 21:12 & n.24 (emphasis
Bennett Corp. v. Penox Techs. Inc., No. added). Where both professionals and the
IP 02-0762-C,
2004 WL 866618, at * 4 general public are relevant consumers,
(S.D. Ind. Mar. 2, 2004) (admitting “the standard of care to be exercised . . .
evidence of patient confusion as to will be equal to that of the least
medical devices available only by sophisticated consumer in the class.”
prescription but advertised directly to
Checkpoint, 269 F.3d at 285. In
patients because patients “are a part of, Morgenstern, we criticized the district
although not the entire, relevant court for weighing the “high standards of
market”); Upjohn Co. v. American Home care” expected of “physicians and
Prods. Corp., No. 1:95CV237, 1996 WL pharmacists” more heavily than the
33322175, at *4 (W.D. Mich. Apr. 5, “obvious similarity in derivation,
1996) (patients are among relevant suggestiveness, spelling, and sound in
consumers for prescription drugs whose careless pronunciation between [the
marketing targets them). marks] as applied to pills to be taken by
19
mouth for therapeutic purposes.” 253 F.2d supra, § 23:32 (“[I]t is proper to require a
at 392. Recognizing that doctors and lesser quantum of proof of confusing
pharmacists “are carefully trained to detect similarity for drugs and m edicinal
differences in the characteristics of preparations. . . . [For] prescription drugs,
pharmaceutical products,” we held that [this] rule . . . should control over the
this “does not open the door to the supposed ‘sophistication’ of physicians
adoption by manufacturers of medicines of and pharmacists.”) (emphasis added).
trade-marks or names which would be
Andrx argues that confusion is even
confusingly similar to anyone not
less likely here than in other cases
exercising such great care.” Id. at 393
involving medical professionals since
(emphasis added).13 See also 3 McCarthy,
prescriptions must reflect the different
chemical composition of the drugs, with
13
At oral argument, the question Advicor prescriptions specifying strengths
was raised whether Morgenstern creates of two active ingredients, and Altocor only
a different standard for drug cases -- one. Of course, this difference in
“possibility of confusion” rather than prescribing is not relevant to the common
“likelihood of confusion” -- and, if so, practice of providing samples or to any
whether it is good law. Compare typ e of confusion other than
Morgenstern, 253 F.2d at 394 (“If there misdispensing. There is no reason to
is any possibility of . . . confusion in the believe that medical expertise as to
case of medicines public policy requires products will obviate confusion as to
that the use of the confusingly similar source or affiliation or other factors
name be enjoined.”) with A & H affecting goodwill. “It is well settled that
Sportswear, Inc. v. Victoria’s Secret expertise in the field of trademarks cannot
Stores, Inc.,
166 F.3d 197, 205 (3d Cir.
1999) (en banc) (“[T]he appropriate
standard for determining trademark relying on Morgenstern for the
infringement under the Lanham Act is proposition that “the potential harm from
the likelihood of confusion.”). But cf. a mistake warrants closer scrutiny” in
Morgenstern, 253 F.2d at 392 (test for such cases. Audio Tape of Oral
infringement is whether marks are so Argument before Court of Appeals for
similar “that ordinary purchasers, buying the Third Circuit (Mar. 9, 2004) (on file
with ordinary caution, are likely to be with Court). Morgenstern’s holding --
misled”) (quotation omitted, emphasis that drug manufacturers cannot use
added). marks that would be confusingly similar
We need not consider the to non-experts -- may be best understood
applicability of the discredited as a warning that medical expertise is not
“possibility of confusion” standard. Kos enough, in and of itself, to lessen the
conceded at oral argument that the proper likelihood of confusion in prescription
standard is “likelihood of confusion,” drug cases.
20
be inferred from expertise in another area.” confused either.” Fisons, 30 F.3d at 476.
Fuji
Photo, 754 F.2d at 595 (collecting The sixth Lapp factor looks at evidence of
cases); see also Altman, supra, § 21:10 & actual confusion.
n.139 (“[I]t has been held that the care
The district court recited Kos’s
with which consumers select a product
claim that, in the thirteen months since
does not impact the association they may
ALTOCOR was first sold,14 “at least six
make regarding sponsorship of another
patients have received the wrong
product or service; therefore even a high
medication due to confusion between the
degree of care would have little effect on
drugs’ names” and “over sixty instances of
confusion of sponsorship.”); cf. Sterling
actual confusion [have been] reported to
Drug Inc. v. Lincoln Labs., Inc., 322 F.2d
[Kos].” JA at 6. Yet the court
968, 971 (7th Cir. 1963) (that defendant’s
conspicuously failed to analyze either
product requires prescription does not
Lapp factor concerned with actual
“eliminat[e] the likelihood of confusion as
confusion or to explain why these factors
to source of origin” for medical products
did not favor Kos in light of the incidents
“designed to remedy the same condition in
Kos identified.
. . . [and] purchased and used by the same
classes of persons”); Champions, 78 F.3d a. Admissibility of Berg
at 1121 (6th Cir. 1996) (sophistication of Certification
consumers, who exercise great care in
Before we reach the substantive
joining golf club, does not preclude
issue of actual confusion, we must
confusion “about affiliation between the
consider the evidentiary status of the Berg
two clubs”).
Certification on which Kos’s claims about
The district court did not err in such confusion rest. Andrx challenges the
holding that this factor does not favor Kos. admissibility and reliability of the Berg
We conclude, however, that no reasonable Certification, which it deems “self-serving,
factfinder could weigh it heavily for unreliable and uncorroborated hearsay”
Andrx. that “is an insufficient basis for the
issuance of preliminary relief in a
4/6. Length of Time Defendant’s
Mark Has Been Used
Without Confusion /
Evidence of Actual
Confusion
14
Per the fourth Lapp factor, two Compare Scott Paper Co. v.
parties’ concurrent use of “similar marks Scott’s Liquid Gold, Inc., 589 F.2d 1225,
for a sufficient period of time without 1230 (3d Cir. 1978) (citing “over forty
evidence of consumer confusion about the years” of concurrent use “without any
source of the products” allows “an evidence of actual confusion” in finding
inference that future consumers will not be no likelihood of confusion).
21
trademark matter.” Appellees’ Br. at 25.15 trial on the merits.” University of Texas v.
Camenisch, 451 U.S. 390, 395 (1981). In
We have considered the possibility
keeping with this principle, many of our
that the district court’s conclusory finding
sister Circuits have recognized that
as to these Lapp factors was based on its
“[a]ffidavits and other hearsay materials
acceptance of the objections Andrx raised
are often received in preliminary
below to the Berg Certification. While it
injunction proceedings.” Asseo v. Pan
is implicit in the district court’s holding
Am. Grain Co., 805 F.2d 23, 26 (1st Cir.
that it found the Berg Certification
1986); see also Ty, Inc. v. GMA
insufficient to show actual confusion,
Accessories, Inc., 132 F.3d 1167, 1171
nothing in the record suggests that it
(7th Cir. 1997) (citing Asseo); Levi
sustained Andrx’s objections to the
Strauss & Co. v. Sunrise Int’l Trading,
admissibility or credibility of the document
Inc., 51 F.3d 982, 985 (11th Cir. 1995)
itself. See, e.g., JA at 41. Indeed, in its
(“At the preliminary injunction stage, a
opinion, the court twice took cognizance
district court may rely on affidavits and
of the Certification with no indication that
hearsay materials which would not be
it viewed the document as inadmissible,
admissible evidence for a permanent
inherently unreliable, or otherwise
injunction . . . .”); Sierra Club, Lone Star
unworthy of consideration. Id. at 6, 12.
Chapter v. FDIC, 992 F.2d 545, 551 (5th
Nor do we agree with Andrx that Cir. 1993) (courts at preliminary injunction
the Berg Certification is an inadequate stage “may rely on otherwise inadmissible
basis for preliminary relief because it evidence, including hearsay”); Flynt
contains multiple levels of hearsay and is Distrib. Co. v. Harvey, 734 F.2d 1389,
not based solely on personal knowledge. 1394 (9th Cir. 1984) (“The urgency of
It is well established that “a preliminary obtaining a preliminary injunction . . .
injunction is customarily granted on the makes it difficult to obtain affidavits from
basis of procedures that are less formal and persons who would be competent to testify
evidence that is less complete than in a at trial. The trial court may even give
inadmissible evidence some weight . . . .”);
15
cf. Heideman v. South Salt Lake City, 348
Our holding in Versa Products.
F.3d 1182, 1188 (10th Cir. 2003) (“The
Co. v. Biford Co., 50 F.3d 189 (3d Cir.
Federal Rules of Evidence do not apply to
1995) does not support Andrx’s
preliminary injunction hearings.”).
argument that “[such] double hearsay is
an insufficient basis for . . . preliminary These cases are consistent with the
relief in a trademark matter.” See lack of any rule in the preliminary
Appellees’ Br. at 25 (citing Versa Prods., injunction context akin to the strict rules
50 F.3d at 212). Versa Products was an governing the form of affidavits that may
appeal from a final judgment after a be considered in summary judgment
bench trial; its holding is not relevant in proceedings. Compare Fed. R. Civ. P.
the preliminary injunction context. 56(e) (affidavits on summary judgment
22
“shall be made on personal knowledge, Under the circumstances here, we find that
shall set forth such facts as would be the district court’s implicit admission of
admissible in evidence, and shall show the Berg Certification for use at this
affirmatively that the affiant is competent preliminary stage was not clearly
to testify to the matters stated therein”) erroneous.
with Fed. R. Civ. P. 65 (no similar
Moreover, we note that some of the
provision in rule governing preliminary
evidence of actual confusion in the Berg
injunctions). See also 11A Charles Alan
Certification would be admissible even if
Wright et al., Federal Practice &
compliance with the Federal Rules of
Procedure § 2949 (2d ed. 1995) (“[A]
Evidence or the strictures governing Rule
consideration of the different policies that
56(e) affidavits were required. The first
underlie Rules 56 and 65 indicates [that
level of hearsay analysis concerns the
the Rule 56(e) standard] should not be
underlying statements said to show
imposed on applications under the latter
confusion. Such statements fall into two
rule.”).
categories -- those exhibiting confusion
District courts must exercise their and those proclaiming it. Statements of
discretion in “weighing all the attendant the first type (Dr. A 17 says “We have
factors, including the need for expedition,” plenty of Advicor” but points to Altocor
to assess whether, and to what extent, samples) are not hearsay because they are
affidavits or other hearsay materials are
“appropriate given the character and
objectives of the injunctive proceeding.” hearing; indeed, neither party asked for a
Asseo, 805 F.2d at 26. The weight to hearing.
which such materials are entitled may of
17
course vary greatly depending on the facts We note that one of Andrx’s
and circumstances of a given case.16 complaints is that the Berg Certification
does not identify the doctors involved in
each incident. This does not affect its
16
We note that such assessments admissibility. See Callahan v. A.E.V.,
must be made in light of the rule that it Inc., 182 F.3d 237, 252 n.11 (3d Cir.
may be improper to resolve a preliminary 1999) (“In a practical sense, the[]
injunction motion on a paper record identities [of the customers who made
alone; where the motion turns on a the statements at issue] are not important.
disputed factual issue, an evidentiary The relevance of their statements
hearing is ordinarily required. See, e.g., depends only on the fact that they were
Sims v. Greene,
161 F.2d 87, 88 (3d Cir. the plaintiffs’ customers . . . .
1947) (evidentiary hearing needed in Furthermore, we do not think that the
light of conflicting claims in pleadings admissibility of their statements under
and affidavits). Neither party claims the the Rule 803(3) hearsay exception
district court erred here by not holding a depends on their being identified.”).
23
not submitted for their truth; indeed, it is marketplace.” JA at 68-69. He certified
their falsity that shows the speaker’s that his staff has reported more than 60
confusion. Statements of the second type incidents of actual confusion to him. He
(Dr. B says “I find these names describes a range of “representative . . .
c o n f u s i n g . ” ) a r e a d m i s si b l e as i n s ta n c es,” i n c l u d i n g : m e d i c al
“statement[s] of the declarant’s then professionals providing patients the wrong
existing state of mind.” Fed. R. Civ. P. drug samples and, on one occasion,
803(3). To the extent such statements improperly filling a prescription; doctors
address the speaker’s plans (Dr. C says complaining to Kos representatives about
“Because these names are confusing, I will “Advicor,” when their complaints really
not prescribe either drug.”), they create an c on c e r ne d Altoc or ; a nd me dic al
inference “that the declarant acted in professionals confusing Altocor samples
accord with that plan.” See, e.g., United w i t h A d v i c o r s a m p l e s, A l t o co r
States v. Donley, 878 F.2d 735, 738 (3d r e p r e se n t a tives with Ad vico r
Cir. 1989). The second level is the report representatives, or Altocor-sponsored
of the marketing representative to Berg events with Advicor-sponsored events.
Id.
(Employee D: “Dr. A told me . . . .”). at 69-71.
There is a factual dispute as to whether
It may be that the Berg Certification
some, all, or none of these reports satisfy
is not competent proof or reliable evidence
the “business records” exception to the
of any particular incident that it describes.
hearsay rule. Even if the reports are not
However, as noted above, Berg is
garden variety business records, however,
competent to attest that he received over
Berg could attest to having received more
60 reports of alleged confusion, and his
than 60 reports of confusion in his official
credibility as to this assertion has been
capacity. Berg’s direct testimony that he
tested by deposition in the PTO opposition
received numerous and varied reports of
proceedings. Moreover, the very number
alleged confusion is not hearsay but a
of reports Berg says he received, and the
factual claim that, as discussed below, has
variety of sources and types of confusion
independent evidentiary significance
reported, bolster the reliability of the
tending to show actual confusion.
reports as a whole. Courts are entitled to
b. Probative Value of Berg view such diverse reports of confusion as
Certification as to Actual mutually reinforcing, particularly where,
Confusion as here, the names and products are so
similar as to make the reported confusion
As Vice President of Marketing,
plausible. Indeed, the reverse may be true
Berg is responsible for Kos’s “overall
as well: here, for example, the 60 reported
marketing strategy” and receives reports
instances of confusion tend to confirm our
from “district managers who oversee the
determination that the names are
distribution of [Kos’s] drugs . . . about
confusingly similar.
significant issues occurring in the
24
Andrx argues that Kos cannot show confusion”) (emphasis added); cf. Sara
trademark confusion because the 60 Lee Corp. v. Kayser-Roth Corp., 81 F.3d
alleged incidents of confusion comprise 455, 466 (4th Cir. 1996) (“[W]e can but
too small a perc entag e of th e wonder how often the experiences related
appr oxim ately 350,000 Adv icor by the trial witnesses have been repeated --
prescriptions, or the approximately but not reported -- in stores across the
650,000 combined prescriptions.18 We country.”).
have recognized, however, that evidence
The Berg Certification provides
of actual confusion “is difficult to find . .
more than enough evidence of actual
. because many instances are unreported.”
confusion to support weighing the fourth
Checkpoint, 269 F.3d at 291. W ithout
and sixth Lapp factors in Kos’s favor.
knowing how many, or what percent of,
Nonetheless, because there is room for
incidents go unreported, anecdotal
differing views as to the weight to which
evidence of confusion cannot usefully be
the document is entitled, and because some
compared to the universe of potential
of the underlying facts are disputed,19 we
incidents of confusion. The rarity of such
decline to hold that the record evidence
evidence makes even a few incidents
compels weighing these factors in Kos’s
“highly probative of the likelihood of
favor as a matter of law. On the other
confusion.” Id. (Because “reliable
hand, it would be clear error to weigh
evidence of actual confusion is difficult to
either factor against Kos on the present
obtain in trademark and unfair competition
record.
cases, any such evidence is substantial
evidence of likelihood of confusion.”) 5. Defendant’s Intent in
(quotation omitted, emphasis added); see Adopting the Mark
also Country Floors, Inc. v. Partnership of
“[E]vidence of intentional, willful
Gepner & Ford, 930 F.2d 1056, 1064 (3d
and admitted adoption of a mark closely
Cir. 1991) (quoting cases holding that
similar to the existing mark[] weighs
“very little proof of actual confusion
strongly in favor of finding [a] likelihood
would be necessary to prove likelihood of
of confusion.” Checkpoint, 269 F.3d at
286 (quotation omitted). This inquiry
18
The district judge commented on
19
these figures, but did not analyze them or For example, Andrx claims that
otherwise indicate whether he saw them Berg’s characterization of one incident as
as legally or factually significant. See, evincing confusion is belied by the e-
e.g., JA at 19 (“So we’re talking about mail describing that incident, which,
something in the vicinity for both Andrx claims, shows only that a
prescriptions of 650,000 drugs, of which cardiologist overrode the prescription
you’re aware of approximately 60 choice made by a patient’s non-specialist
instances of confusion.”). physician. See supra p. 6.
25
extends beyond asking whether a allegedly infringing mark “was specifically
defendant purposely chose its mark to considered by the USPTO, the FDA and a
“promot[e] confusion and appropriat[e] the district court and found not to be
prior user’s good will.” Fisons, 30 F.3d at confusingly similar.” Appellees’ Br. at 24.
479 (quotation omitted). The adequacy
As stated previously, Andrx is not
and care with which a defendant
entitled to rely on the PTO or FDA actions
investigates and evaluates its proposed
to justify its own. See supra pp. 16-17.
mark, and its knowledge of similar marks
Andrx’s attempt to justify its conduct by
or allegations of potential confusion, are
reference to the district court decision is
highly relevant. See, e.g., id. at 480
puzzling; that decision was obviously not
(directing district court to consider
issued when Andrx adopted th e
defend ant’s trademark search and
ALTOCOR mark. Andrx chose to use this
investigation of similar marks to determine
mark with clear notice of Kos’s objections
if it was “careless in its evaluation of the
and its successful prior use of the
likelihood of confusion”); Lapp, 721 F.2d
ADVICOR mark for similar goods. There
at 463 (relying on district court’s finding
was, in the words of Judge Learned Hand,
that while defendant “may have acted
“no reason whatever why [defendant]
innocently, [it] was careless in not
should have selected [an arbitrary, made-
conducting a thorough name search for
up trade-name] which bore so much
A m e r i c a n us e s o f th e n a m e ” );
resemblance to the plaintiff’s.” See
Morgenstern, 253 F.2d at 394 (citing
Lambert Pharmacal Co. v. Bolton Chem.
finding that defendant “trod a very narrow
Corp., 219 F. 325, 326 (S.D.N.Y. 1915).
course when it adopted the name Mictine
Andrx’s use of ALTOCOR for its anti-
with full knowledge of the prior use of the
cholesterol drug was at least reckless, at
name Micturin by the plaintiff”). A
worst a deliberate appropriation of the
defendant that “persisted in its plan” to
goodwill Kos had generated for its anti-
adopt a mark “after being warned of too
cholesterol product, Advicor.
close resemblance between” its proposed
mark and plaintiff’s mark is not We therefore conclude that the
“blameless[].” Telechron, Inc. v. Telicon district court clearly erred in failing to
Corp., 198 F.2d 903, 908 (3d Cir. 1952). weigh this factor for Kos.20
The district court did not analyze
20
this factor on the record or make relevant In view of this conclusion, it is
factual findings. Kos argues that Andrx’s unnecessary to address the factual
intent to trade on Kos’s goodwill may be dispute between the parties as to whether
inferred from Andrx’s insistence on using Andrx deliberately chose the ALTOCOR
this particular made-up (and meaningless) mark knowing Kos would be using
mark despite being warned of the ADVICOR for its own similar product in
likelihood of confusion before beginning order to trade on the goodwill it expected
to sell Altocor. Andrx responds that its Kos’s new product to generate.
26
7. Whether Goods A re the same channels and advertised through
Marketed Through the Same the same media.” Lapp, 721 F.2d at 463.
Channels of Trade and Advertised There are other Lapp factors that take
in the Same Media those issues into account. “[W]e [do] not
discount the strength of plaintiff’s case in
“[T]he greater the similarity in
one area because of weakness in another;
advertising and marketing campaigns, the
we weigh[] each factor separately.”
greater the likelihood of confusion.”
Fisons, 30 F.3d at 476 (holding district
Checkpoint, 269 F.3d at 288-89 (quotation
court erred in “fail[ing] to count the
omitted). This is a “fact intensive inquiry”
similarities in channels of trade and target
that requires a court to examine the “media
audience” for plaintiff due to district
the parties use in marketing their products
court’s view that other Lapp factors
as well as the manner in which the parties
weighed against plaintiff).
use their sales forces to sell their products
to consumers.” Id. at 289. The district We find that the district court
court did not address this factor directly, clearly erred in failing to recognize that
but implicitly found that it did not favor this factor favors Kos. It does.
Kos. Nonetheless, the court’s statement,
8. Extent to Which Targets of
when analyzing the eighth Lapp factor,
the Parties’ Sales Efforts Are
that both parties’ “sales representatives
the Same
visit physicians with drug samples and
related information” is relevant here, and The record supports the district
supports weighing this factor in Kos’s court’s finding that this factor supports
favor. JA at 10. Kos because the “‘parties target their sales
efforts to the same consumers,’” namely,
Andrx concedes that the “goods are
“physicians and pharmacists.” JA at 10
marketed through the same channels,” but
(quoting Checkpoint, 269 F.3d at 289).
argues that confusion is not likely since the
Andrx again argues that “any potential
“channels of trade and marketing efforts
confusion” is “obviate[d]” because the
are directed to a very educated and highly
target audience is “a highly educated and
sophisticated group.” Appellees’ Br. at 30.
sophisticated group.” Appellees’ Br. at 30.
Andrx also claims that this factor favors it
The district court properly rejected this
“because the products are not in direct
argu men t, recogn izing th at it
competition” since each should be
impermissibly conflated different Lapp
prescribed under somewhat different
factors. Cf. Fisons, 30 F.3d at 476.
circumstances.
Id.
9. Relationship of the Goods
The problem with Andrx’s
approach is that neither customer “The closer the relationship
sophistication nor the relationship between between the products, . . . the greater the
the goods is relevant to determining likelihood of confusion.” Lapp, 721 F.2d
whether the goods are “marketed through at 462. The question is how similar, or
27
closely related, the products are. Fisons, factor to support finding a likelihood of
30 F.3d at 481 (describing cases where confusion. See, e.g., A & H, 237 F.3d at
“the relationship of the products was close 224 (affirming holding that “product
enough to lead to the likelihood of similarity factor favored [plaintiff]” where
confusion” and “the goods were similar p r o d u c t s w e r e o n l y “ s o m e w ha t
enough that a consumer could assume they interchangeable” due to “slightly different
were offered by the same source”). This functions”). The question is not whether it
factor focuses on the nature of the is possible to distinguish between the
products themselves, asking whether it products but whether, and to what extent,
would be reasonable for consumers to the products seem related, “whether
associate them or see them as related. We because of [their] near-identity, . . . or
have recognized that “the near-identity of similarity of function, or other factors.”
the products” or their “similarity of
Id. at 215; see also
Fisons, 30 F.3d at 481
function” are key to assessing whether (equating factor with Sixth Circuit test for
consumers may see them as related. A & “Relatedness of the Goods”). Courts may
H, 237 F.3d at 215. consider here “whether buyers and users of
each parties’ goods are likely to encounter
The district court did not analyze
the goods of the other, creating an
this factor. It did, however, make
assumption of com mon sourc e[,]
potentially relevant findings about
affiliation or sponsorship.” Checkpoint,
similarities and differences in the usage
269 F.3d at 286.
and composition of the drugs. JA at 6
(“While both drugs are used to treat Advicor and Altocor are both
elevated cholesterol levels, their chemical prescription drugs used to improve
compositions differ in such a way that cholesterol levels. The products are of the
there are different active ingredients, same type and serve the same function in
dosages, and side effects.”). Andrx slightly different (but overlapping) ways
maintains that doctors will necessarily that may be appropriate for slightly
“distinguish the two products in their different (but overlapping) sets of patients.
minds” because they will need to decide That doctors will need to decide which
which to prescribe since Advicor, but not drug to prescribe does not mean they
Altocor, contains niacin. Appellees’ Br. at won’t see the drugs as related or otherwise
30-31. Kos argues that the “differences in associate them. Indeed, it could be argued
active ingredients,” which make the drugs that the opposite is true, that is, that they
appropriate “for treatment of different will associate the products because they
types of patients with the same ailment[,] must consider both to decide which to
. . . do not negate a likelihood of prescribe. See, e.g., Syntex Labs., Inc. v.
confusion.” Appellant’s Br. at 25-26. Norwich Pharmacal Co.,
437 F.2d 566,
568-69 & n.1 (2d Cir. 1971) (affirming
finding that drugs for “treatment of closely
Goods need not be identical for this
parallel and medically related conditions”
28
-- which had different compositions such expertise” to enter defendant’s field due to
that each was contraindicated for some “highly specialized and technical nature”
patients who could take the other drug -- of defendant’s products); Fisons, 30 F.3d
“are likely to be closely associated in the at 480 (evidence that products “are closely
minds of those who prescribe and dispense related and are used together” and that
them”); Sterling Drug Inc. v. Lincoln “other companies market both products”
Labs., Inc., 322 F.2d 968, 971 (7th Cir. supports finding that public might expect
1963) (confusion likely as to medicines senior user to offer products of junior
“designed to remedy the same condition in user);
Lapp, 721 F.2d at 464 (close
[and] purchased and used by the same relationship between products that may be
class of persons,” even though products used together supports finding that “even
had different active ingredients, and were sophisticated customers . . . would find it
used and sold in different ways) (reversing natural or likely” that plaintiff might offer
and directing entry of permanent product similar to defendant’s); McNeil
injunction); Ortho Pharm. Corp. v. Labs., Inc. v. American Home Prods.
American Cyanamid Co., 361 F. Supp. Corp.,
416 F. Supp. 804, 806-07 (D.N.J.
1032, 1040 (D.N.J. 1973) (medical 1976) (consumer might reasonably think
personnel likely to “mentally . . . TYLENOL manufacturer used
associate” products even though unlikely EXTRANOL mark for extra-strength
to dispense one thinking it is the other). version of its drug); Ortho Pharm., 361 F.
Supp. at 1040 (while purchasing agents are
Accordingly, we hold that the
“likely to know that [drugs] are the
district court clearly erred in holding that
products of two separate companies” since
this factor does not weigh in Kos’s favor.
they typically order “face-to-face” with a
It does.
sales representative, medical professionals
10. Other Facts Suggesting the will likely “associate with [defendant] the
Public Might Expect the goodwill and the high reputation which
Prior Owner To Manufacture [plaintiff] has acquired”).
Both Products
The district court did not discuss
In assessing this factor, courts may this factor, but held that it did not favor
look at the nature of the products or the Kos.
relevant market, the practices of other
In light of the close relationship
companies in the relevant fields, or any
between the drugs, customers could easily
other circumstances that bear on whether
expect the maker of one to make the other.
consumers might reasonably expect both
Cf. Checkpoint, 269 F.3d at 290
products to have the same source. This
(“Evaluating this factor, courts look to
issue is highly context-dependent. See,
evidence that . . . the products at issue are
e.g., Checkpoint, 269 F.3d at 291
so closely related that the consuming
(affirming finding that consumers were
public might find it natural for one
unlikely to expect plaintiff to “have the
29
company to” sell both.). In addition, Kos appearance, and neither has any meaning
argues that medical professionals might that could distinguish between them or
expect it to make a drug akin to Altocor in lead customers to associate them with
light of how well such a drug would fit distinct products. The ADVICOR mark is
into Kos’s product line. Kos sells “two entitled to broad protection because it is a
prescription drugs for the treatment of coined term and because it is a strong
chronic . . . cholesterol disorders” -- mark, both conceptually and commercially.
Niaspan, which contains only niacin, and The products in question are closely
Advicor, which contains both lovastatin related and are marketed and sold to
and niacin. JA at 69. A lovastatin-only practically identical audiences in
anticholesterol drug could easily be a seen practically identical ways. These are
as a natural brand extension. products customers could easily expect to
be manufactured by a single source. Also
Andrx responds that doctors choose
in Kos’s favor is Andrx’s deliberate
which drug to prescribe “based upon a
decision to use a name dangerously close
patient’s particular needs, not based upon
to that of a competing drug, with no
who manufactures the drug.” Appellees’
apparent reason for choosing an arbitrary
Br. at 31. This response is wholly
mark so similar to its competitor’s and
irrelevant to the question whether
despite being warned of the confusing
customers might expect Kos to offer a
similarity. Accordingly, the first, second,
product like Altocor. Andrx’s argument
fifth, seventh, eighth, ninth, and tenth
seems premised on the idea that goodwill
Lapp factors unquestionably weigh in
is virtually irrelevant for prescription
favor of Kos as a matter of law.
drugs. Andrx does not point to any
evidence in support of such a novel There is a factual dispute as to how
position, which is counter to the purposes Kos’s evidence of actual confusion affects
and assumptions of the Lanham Act. the analysis of the fourth and sixth Lapp
factors. We conclude that while the
Because Andrx has done nothing to
evidence Kos submitted is undoubtedly
rebut Kos’s showing that customers could
sufficient to support weighing these
easily and naturally assume that Kos
factors in its favor, it is not so great as to
manufactures both products, we find that
compel that result. But the best Andrx
this factor favors Kos as a matter of law on
could hope for on the present record is that
the present record. The district court
these factors be found in equipoise; no
clearly erred in not weighing this factor for
reasonable factfinder could find that they
Kos.
weigh against finding a likelihood of
B. Weighing the Lapp Factors confusion here. Only the third Lapp factor
arguably weighs against finding a
The most important factor -- mark
likelihood of confusion. It would,
similarity -- favors Kos. ADVICOR and
however, be clear error to allow this one
ALTOCOR are similar in sound and
factor to outweigh Kos’s strong showing
30
on the key factor of mark similarity and on IV. IRREPARABLE HARM
the remaining factors, particularly in light
The district court held that Kos had
of our earlier discussion of the dangers of
not shown it would suffer irreparable harm
relying too heavily on m edical
absent an injunction because Kos’s
sophistication in prescription drug cases.
product had been on the market “less than
We have carefully considered two years.” JA at 11. The court
whether to direct the district court on apparently deemed this an insufficient time
remand to weigh the Lapp factors anew in in which to establish the goodwill needed
light of the proper legal standards. On to show such harm, as compared with the
reflection, however, we conclude that “over sixteen years” during which the
doing so would serve no useful purpose. goods were marketed in the case on which
The undisputed facts weigh heavily in Kos relied. Id. (comparing Merrell-
favor of Kos as a matter of law. National Labs., Inc. v. Zenith Labs., Inc.,
Regardless of how the factual disputes 194 U.S.P.Q. 157, 161 (D.N.J. 1977)).
might be resolved, any reasonable
“Grounds for irreparable injury
factfinder weighing the Lapp factors in
include loss of control of reputation, loss
accordance with the correct legal standards
of trade, and loss of good will.” Pappan
would hold that Kos is likely to succeed on
Enters., Inc. v. Hardee’s Food Sys., Inc.,
the merits. Because the record could not
143 F.3d 800, 805 (3d Cir. 1998). Lack of
support a contrary holding, a remand for
control over one’s mark “creates the
reweighing would waste judicial resources
potential for damage to . . . reputation[,
and unnecessarily delay the proceedings
which] constitutes irreparable injury for
further. Cf. Fisons, 30 F.3d at 482 (Garth,
the purpose of granting a preliminary
J., concurring in part and dissenting in
injunction in a trademark case.” Opticians
part) (“I can see no purpose in remanding
Ass’n of Am. v. Indep. Opticians of Am.,
for retrial of Fisons’ Lanham Act claims
920 F.2d 187, 196 (3d Cir. 1990). Thus,
when it is so evident that the marks at
“trademark infringement amounts to
issue here are confusingly similar.”).
irreparable injury as a matter of law.” S &
Compare A & H, 237 F.3d at 238
R Corp. v. Jiffy Lube Int’l, Inc., 968 F.2d
(remanding where court could “not say as
371, 378 (3d Cir. 1992); see also Times
a matter of law that a different weighing of
Mirror Magazines, Inc. v. Las Vegas
the factors could not have influenced the
Sports News, L.L.C., 212 F.3d 157, 169
District Court to make a different finding
(3d Cir. 2000) (“potential damage to . . .
of ultimate fact”) with Tanimura & Antle,
reputation or goodwill or likely confusion
Inc. v. Packed Fresh Produce, Inc., 222
between parties’ marks” is irreparable
F.3d 132, 140 (3d Cir. 2000) (reversing
injury). “[O]nce the likelihood of
and directing entry of preliminary
c o n f u s i o n c a u s e d b y tr a d e m a rk
injunction after finding “the four factors
infringement has been established, the
required to grant a preliminary injunction
inescapable conclusion is that there was
are apparent on the record before us”).
31
also irreparable injury.” Pappan, 143 F.3d not depend on the length of time it has
at 805. been using that mark.
The district court’s erroneous Nor can we accept Andrx’s
holding that Kos had not proven that it was argument that Kos’s delay -- filing suit
likely to succeed on its trademark claims after Altocor had been on the market for
deprived Kos of the benefit of this rule. 13 months -- shows that Kos is not being
As we have already found that Kos has irreparably harmed.21 The claim that this
shown a likelihood of success, we hold it delay bars preliminary relief is not
is entitled to a presumption that it will consistent with the law of this Circuit or
suffer irreparable harm absent an the facts of this case. The Third Circuit
injunction. case Andrx cites for the proposition that
“delay alone defeats Kos’ assertions of
We see nothing in the record that
irreparable harm” -- indeed, the only Third
could overcome this presumption.
Circuit case Andrx relies on for this
Although we need not defer to the district
argument -- does not support its claim.
court’s holding since it was premised on
Appellees’ Br. at 32 (citing Times Mirror,
an error of law, we have considered
212 F.3d at 161). In that case, we
whether the length of time Advicor was
considered -- and rejected -- the argument
marketed weakens Kos’s showing of
that a 15-month filing delay showed
irreparable harm. We conclude that it does
plaintiff’s injury was “not immediate and
not. First, the district court’s view that the
irreparable,” finding the argument
relatively short time Advicor was on the
unpersuasive since the “delay was
market shows that Kos had not generated
sufficient goodwill to suffer irreparable
harm seems inconsistent with its holding 21
Andrx’s other argument -- that
that -- over the same time period -- Kos
Kos will suffer no irreparable harm
developed a “high level of commercial
because prescriptions will not be mis-
strength” based on sales grossing more
filled, and, even if they are, there will be
than $ 70 million on more than 350,000
no “dire” medical consequences -- is
prescriptions. JA at 9. Second, we do not
clearly disposed of by our earlier holding
agree that a company’s goodwill is less
that the Lanham Act covers likelihood of
likely to be irreparably harmed if it has
confusion of all types, and not just the
used its mark for only a short time.
likelihood that one product will be
Indeed, it could be argued that irreparable
mistakenly substituted for another.
harm is more likely where a “young” mark,
Kos’s loss of control over its mark is
rather than an old and well-established
irreparable harm regardless of whether
mark, is infringed. Most importantly,
resulting confusion might lead to further
however, a company’s right to control its
injuries. Cf. Jiffy Lube, 968 F.2d at 378
own mark so it can avoid potential damage
(irrelevant whether “infringer is putting
to its goodwill or possible confusion does
the mark to better use”).
32
attributable to negotiations between the be understood as a suggestion by Andrx
parties.” Times Mirror, 212 F.3d at 169. that the matter might be resolved absent a
lawsuit. Under these circumstances, no
While Times Mirror may imply that
reasonable factfinder could find that Kos
inexcusable delay could defeat the
had waived its rights or conceded that it
presumption of irreparable harm in an
was not irreparably harmed by filing when
appropriate case, it makes clear that the
it did.
present case is not an appropriate one.
Kos sought relief directly and through Accordingly, we find that, given the
administrative proceedings from the time undisputed facts of record, this factor
it learned of the proposed use of the weighs in favor of injunctive relief as a
ALTOCOR mark through the time it filed matter of law.
this suit. Andrx’s conduct -- submitting
V. BALANCE OF HARDSHIPS
alternate names to the FDA and the PTO,
and stating in its 2002 Annual Report that The district court held that
Kos had opposed its application to register “granting relief will result in greater harm
ALTOCOR and, in the next sentence, that to” Andrx than Kos would suffer absent an
it might “seek to change the name of injunction. JA at 12. The court found that
Altocor,” JA at 37422 -- could reasonably an injunction would “significantly affect”
the “considerable time and expense”
Andrx had spent “developing the market
22
At argument, Andrx’s counsel for [its] drug.” Id. The court rejected
represented that Andrx applied for Kos’s argument that the harm to Andrx
alternate names “to be used only if” at would be minimal since Andrx could
least four incidents of actual confusion continue to market its successful product,
between Altocor and a third, unrelated albeit under a different, non-infringing
drug were reported the first year Altocor name. This claim failed, according to the
was sold. Audio Tape of Oral Argument district court, because “there is no
before Court of Appeals for the Third trademark infringement.”
Id. We cannot
Circuit (Mar. 9, 2004) (on file with base our analysis on, or defer to, the
Court) (emphasis added). Andrx points district court’s balancing of the equities
to no record evidence that shows that because that analysis is premised on
possible confusion with a drug other than holdings we have already found clearly
Advicor was its only concern in erroneous, namely, that Kos has shown
considering a name change, and this neither trademark infringement nor
representation seems inconsistent with irreparable harm.
the juxtaposition of the Kos Opposition
The question is whether, and to
and the possible name change in the
what “extent[,] . . . the defendants will
same paragraph of the 2002 Annual
suffer irreparable harm if the preliminary
Report, with no mention of any other
injunction is issued.” Opticians, 920 F.2d
basis for the name change.
33
at 192. If temporary relief would Jobbers Ass’n v. FPC, 259 F.2d 921, 925
irreparably harm an alleged infringer (D.C. Cir. 1958)). The costs in time and
pending final disposition of the case, the money associated with adopting a new
court should “balanc[e] the hardships” to mark are not “injuries . . . that could not be
“ensure that the issuance of an injunction remedied by money damages.” Pappan,
would not harm the infringer more than
a 143 F.3d at 805-6 (“significant financial
denial would harm the mark’s owner.”
Id. injuries,” including costs of replacing
at 197. “Irreparable harm must be of a “several months worth of logoed product,”
peculiar nature, so that compensation in do not constitute irreparable harm).
money alone cannot atone for it.” Pappan,
Andrx also argues that an injunction
143 F.3d at 805 (quotation omitted).
would “destroy the market” it has
District courts should consider financial
developed and would cause it to lose the
damages when establishing and setting the
goodwill associated with the ALTOCOR
bond for an injunction, not when deciding
mark. Appellees’ Br. at 34. Kos responds
whether to grant it. See Fed. R. Civ. P.
that this harm would be minimal since
65(c) (“No . . . preliminary injunction shall
Andrx already has an alternate mark
issue except upon the giving of security by
already in place. Appellant’s Br. at 34.
the applicant, in such sum as the court
Although Andrx denies that it has an
deems proper, for the payment of such
approved alternate name available,23 its
costs and damages as may be incurred . . .
vague, unsubstantiated representation that
by any party who is found to have been
the FDA approval is no longer valid
wrongfully enjoined.”).
cannot create a factual dispute in the face
Andrx states that “if required to of record evidence that the FDA approved
rename the product, [it will] incur its use of the ALTOPREV mark and the
significant time and expense in obtaining judicially noticeable fact that the PTO has
trademark clearance services, changing the
labeling and product inserts, product re-
23
l a u n c h a d v e rtising and the r e - Nor is it clear that the alleged
establishment of goodwill,” and perhaps in expiration of FDA approval would weigh
“destroying inventory or recalling the in Andrx’s favor. Even on Andrx’s
products already distributed.” Appellees’ account, the lapse of approval is the
Br. at 35. Such costs, however, are consequence of Andrx’s own actions in
compensable by money damages and thus that approval supposedly expired “when
do not constitute irreparable harm as a we didn’t use the name.” See Audio
matter of law. “Mere injuries, however Tape of Oral Argument before Court of
substantial, in terms of money, time and Appeals for the Third Circuit (Mar. 9,
energy necessarily expended in the 2004) (on file with Court). Moreover,
absence of a stay, are not enough.” Andrx has never alleged that there would
Sampson v. Murray, 415 U.S. 61, 90 be any barrier to its seeking reapproval
(1974) (quoting Virginia Petroleum of the mark if it has indeed elapsed.
34
issued a Notice of Allowance for this Andrx took a deliberate risk by proceeding
mark.24 despite being warned that its mark was
dangerously close to that of a competing
Injury to goodwill does constitute
product, and is thus “not in position to
irreparable harm. See, e.g., Opticians, 920
urge its original blamelessness as a
F.2d at 195. But, when the potential harm
consideration which should be persuasive
to each party is weighed, a party “can
to a court of equity.” Telechron, 198 F.2d
hardly claim to be harmed [where] it
at 908; see also Novartis, 290 F.3d at 596.
brought any and all difficulties occasioned
by the issuance of an injunction upon One other factor we have held
itself.”
Id. at 197 (directing entry of weighs in the balance of hardships analysis
preliminary injunction). We have often is the “goal[] of the preliminary injunction
recognized that “the injury a defendant analysis [of] maintain[ing] the status quo,
might suffer if an injunction were imposed defined as the last peaceable, noncontested
may be discounted by the fact that the status of the parties.” Opticians, 920 F.2d
defendant brought that injury upon itself.” at 197 (directing entry of injunction where
Novartis Consumer Health, Inc. v. Johnson such relief would restore status quo since
& Johnson-Merck Consumer Pharm. Co., defendant could not use mark “[b]efore
290 F.3d 578, 596 (3d Cir. 2002). Indeed, this controversy began”) (citation and
a different rule would allow “a knowing quotation omitted). This factor favors Kos
infringer [that] construct[s] its business since it objected to Andrx’s adoption of
around its infringement” to avoid an the ALTOCOR mark before Andrx had
injunction by claiming it would have a begun to use it in commerce.
“devastating effect” on that business, “a
We recently rejected an argument --
result we cannot condone.” Apple
similar to one Andrx makes here -- that the
Computer, Inc. v. Franklin Computer
harm a defendant would suffer if enjoined
Corp., 714 F.2d 1240, 1255 (3d Cir. 1983).
from selling its product under its current
Andrx knew before its drug was first sold
name “outweigh[ed] the potential harm to
that Kos viewed ALTOCO R and
[its competitor] from losing market share
ADVICOR as confusingly similar when
if the injunction were not issued.”
used to identify competing prescription
Novartis, 290 F.3d at 596 (affirming
drugs for patients with high cholesterol.
preliminary injunction in false advertising
case). We emphasized that the injunction
24
did “not require [defendant] to abandon its
Our review of the record and the
product name forever[, but] only [to] cease
parties’ arguments convinces us that the
shipping the [] product under that name
facts relevant to balancing the hardships
until the end of the litigation on the
are undisputed. Cf. Opticians, 920 F.2d
merits.” Id. at 597. The same is true here.
at 197 (conducting own assessment of
We also stated that the defendant could
the balance of hardships where facts
still “ship[] the product currently in
were not in dispute).
35
inventory under a different name [and] Kos would continue to suffer absent an
label” or ship that product without any injunction. Cf. Tenafly Eruv Ass’n, Inc.
such change if it were to prevail on the v. Borough of Tenafly, 309 F.3d 144, 178
merits.
Id. Again, the same is true here.25 (3d Cir. 2002) (assessing balance of
We note that Kos may be in an even hardships based on own “review of the
stronger position than was the plaintiff in record”) (reversing and directing entry of
Novartis. The false advertising claim in injunction); Meridian Mutual Ins. Co. v.
Novartis was not based on any confusing Meridian Insurance Group, Inc., 128 F.3d
similarity between the plaintiff’s and 1111, 1121 (7th Cir. 1997) (“Our
defendant’s marks; thus, the plaintiff there examination of the record shows that . . .
-- unlike Kos -- was not threatened with a the harm to the plaintiff if no injunction is
likelihood of confusion or with loss of issued therefore outweighs any harm to the
control over its own mark, which can lead defendants if one is entered.”) (reversing
to loss of reputation, loss of trade, and loss and directing entry of injunction); Jiffy
of goodwill. See Opticians, 920 F.2d at
Lube, 968 F.2d at 379 (balancing harms in
195. first instance and holding that “self-
inflicted harm” to alleged infringer “is far
We have recognized that “[t]he
outweighed by the immeasurable damage
more likely the plaintiff is to win, the less
done [plaintiff] by the infringement of its
heavily need the balance of harms weigh
trademark,” despite “sympathetic position”
in his favor.” Novartis, 290 F.3d at 597.
of defendant who would have to change
In light of Kos’s strong showing of its
name under which it was operating its
likelihood of success, and the fact that
business) (reversing and directing entry of
Andrx accepted the risk of injury to its
injunction); Opticians, 920 F.2d at 197
goodwill when it ignored Kos’s claim of
(finding on undisputed facts that “grant of
infringement, we hold that no reasonable
an injunction would impose no greater
factfinder could conclude that the
harm on [defendant] than would be
irreparable harm Andrx might suffer
imposed upon the [plaintiff] by the denial
pending resolution of this matter on the
of an injunction”) (reversing and directing
merits outweighs the irreparable harm that
entry of injunction).
Accordingly, we find that this
25
We note that the graphic Andrx factor weighs in favor of injunctive relief
submitted of its product does not show as a matter of law.
the ALTOCOR mark on the pills
VI. PUBLIC INTEREST
themselves. See Appellees’ Br. at 28.
Cf. Opticians, 920 F.2d at 197 (noting The district court held that the
that defendant could continue to sell its “public interest does not favor” injunctive
product since the challenged mark was relief because Kos “failed to persuade [it]
not placed on the “primary trade . . . that the public is at a serious health
product” but on “promotional material”). risk if this Court does not grant a
36
permanent [sic] injunction.” JA at 12. C on ve rse ly, a p r o h i b it i o n u p o n
[defendant’s] use of [its] mark[] would
Kos claims that the public interest
eliminate that confusion.” Opticians, 920
“demands entry of a preliminary
F.2d at 198. Ordinarily, this might be the
injunction” here because “[n]o public
extent of the relevant analysis. Weighing
interest is greater than the public interest to
the public interest in preliminary relief is
preserve lives.” Appellant’s Br. at 35.
often fairly routine. See American Tel. &
Andrx responds that Kos’s “self-serving,
Tel. Co. v. Winback & Conserve Program,
inflammatory rhetoric” is belied by the
Inc., 42 F.3d 1421, 1427 n.8 (3d Cir. 1994)
“neutral” conclusion of the FDA that it is
(“As a practical matter, if a plaintiff
unlikely that a patient will receive the
demonstrates both a likelihood of success
wrong prescription. Appellees’ Br. at 37.
on the merits and irreparable injury, it
Andrx also argues that the public would be
almost always will be the case that the
harmed by an injunction because those
public interest will favor the plaintiff.”).
patients who depend on Altocor would be
“deprive[d] . . . of a drug product that has Here, however, we must confront
been incorporated into their daily routine,” the question whether the parties’ claims as
and would suffer “unnecessary worry and to specific harms to the public change the
anxiety when their prescriptions cannot be usual calculus.
refilled and their doctors need to start them
We first consider Kos’s claim that
on a new drug regimen.” Id. at 38.
the interest in “preserv[ing] lives” requires
These are not your usual Lanham injunctive relief. There is a factual dispute
Act public interest arguments. Indeed, as to this issue. The parties submitted
neither the district court nor the parties competing medical affidavits to support
even mentions the most basic public their respective views as to the nature and
interest at stake in all Lanham Act cases: severity of the potential consequences of a
the interest in prevention of confusion, mis-filled prescription.26 Andrx also
particularly as it affects the public interest
in truth and accuracy. We have often 26
We note that the affidavit Andrx
recognized that “[p]ublic interest . . . in a
submitted focused on the potential harm
trademark case . . . is most often a
of substituting Altocor for Advicor,
synonym for the right of the public not to
while the more serious harms Kos
be deceived or confused.” Pappan, 143
identified are those that may occur in the
F.3d at 807 (quoting Opticians, 920 F.2d at
reverse case, that is, when Advicor is
197).
substituted for Altocor. See supra p. 6.
In light of our holding that “there is Although the Andrx affidavit cannot
a likelihood of consumer confusion created create a factual dispute as to the type of
by” the use of confusingly similar marks, substitution it does not address, we
“it follows that if such use continues, the hesitate to draw conclusions from the
public interest would be damaged. “undisputed” fact that serious harm may
37
disputed Kos’s allegations as to the risks clearly erroneous.27
of misdispensing by arguing it is extremely
We must, however, distinguish
unlikely that a pharmacist would
between the court’s finding that Kos did
improperly fill a prescription. The district
not establish a “serious health risk” and its
court resolved this dispute in Andrx’s
conclusion that “[t]herefore, the public
favor, holding that Kos had not proven that
interest does not favor” injunctive relief.
the public would face a serious health risk
JA at 12 (emphasis added). While we
absent an injunction. The colloquy at the
defer to the former, the court’s ultimate
hearing shows that the court was
assessment of the public interest is clearly
impressed by the FDA’s statement that the
erroneous because it does not take into
“possibility of confusion was minimal,”
account the “right of the public not to be
and was persuaded that “it would be
deceived or confused.” Opticians, 920
difficult to imagine a situation” where the
F.2d at 197. As stated above, that right is
drugs would be confused “when a
implicated here.
pharmacist is filling a prescription.” JA at
25, 51. We note that, although the FDA’s The remaining question is whether
inquiry is not equivalent to the Lanham this public interest is outweighed by the
Act “likelihood of confusion” test, its potential public harm of “depriv[ing]”
review of proprietary drug names is patients of Altocor. Appellees’ Br. at 38.
relevant in assessing the health risks of Andrx claims that an injunction would
mis-filled prescriptions. Indeed, the mean that Altocor “prescriptions [could]
purpose of FDA review is “to predict not be refilled and . . . doctors [would]
potential confusion that may arise in the need to start [patients] on a new drug
actual prescription process.” 3 M cCarthy, regimen.” Id. The factual predicate for
supra, § 19:149 (4th ed. 2003). We defer this claim seems to be the Declaration of
to the district court’s resolution of this Charles Schneider, which states that “[i]f
factual dispute because its finding is Andrx is forced to suspend sales of
supported by the record and is thus not ALTOCOR, [it] will suffer great economic
harm by losing sales of an existing product
and by a loss of good will with its
27
result from substituting Advicor for We do not suggest that the district
Altocor. The most serious risks Kos court or the FDA (or, for that matter, this
identifies were mentioned for the first Court) is careless or insensitive to the
time in the affidavit Kos submitted at the potentially serious health risks of mis-
hearing. See JA at 28-29. Since the filled prescriptions. Nonetheless, the
district court ruled from the bench, recognition that the stakes are high does
Andrx had no chance to respond to these not mean that disputed claims about the
new claims and cannot be said to have possibility for such harm must be
conceded them. credited.
38
customers due to an interruption in the lovastatin medication.28
supply of an existing product.” JA at 343.
Andrx’s broad claims that it would
have to “suspend” sales and “deprive”
patients of Altocor ignore the fact that it is
only the ALTOCOR mark and not the drug
itself that an injunction should address.
Andrx has provided no evidence to show
that temporarily ceasing use of the
ALTOCOR mark would cause “an
interruption in the supply” of its extended-
release lovastatin product. The record is
bare of information as to how long it
would take Andrx to provide new labels or
label information for pharmacies to use
when dispensing the drugs, to replace
branded samples in physician’s offices, to
re-package its existing product as needed
for pharmacies, or to take other necessary
steps to suspend use of the mark
ALTOCOR. Andrx has thus introduced no
evidence from which a reasonable
factfinder could find that the public would
28
be harmed by the proposed injunction. We note that the district court will
be setting such bond as it determines to
Accordingly, we find that this
be appropriate to secure payment to
factor weighs in favor of injunctive relief
Andrx of any compensable money
as a matter of law.
damages that it may incur prior to final
VII. disposition of this matter should it be
determined that Andrx was erroneously
In light of the foregoing analysis,
enjoined. In determining the amount of
we conclude that the district court clearly
such bond, the district court should, of
erred in denying Kos’s motion for a
course, take into account Andrx’s ability
preliminary injunction. We therefore
to minimize the potential for such
reverse and remand with instructions that
damages. See supra p. 61. To that end,
the district court fashion and enter, on an
the court may wish to shape the
expedited basis, an order preliminarily
preliminary injunction, or set its effective
enjoin ing Andrx from using the
date, to allow Andrx to take reasonable,
ALTOCOR mark in connection with the
expeditious steps to begin marketing its
marketing and sale of its extended-release
product under another name.
39
