The U.S. Court of Appeals for the Second Circuit reversed the denial of a preliminary injunction for trademark infringement, noting the lower court was inappropriately focused on a side-by-side comparison of the goods rather than on the purchasing context in which the marks appeared. Louis Vuitton Malletier v. Burlington Coat Factory Warehouse Corp., 426 F.3d 532 (2nd Cir. Oct.12, 2005) (Calabresi, J.).
Louis Vuitton, a luxury goods designer, introduced a line of handbags and accessories featuring a new colorful version of the famous Louis Vuitton logo. The bags in this collection are available at high-end retail stores, such as Neiman Marcus and Saks Fifth Avenue. Approximately one year later, Burlington Coat Factory (BCF), a chain of discount clothing and accessory stores, started offering beaded handbags featuring colorful designs "reminiscent" of the colorful new Louis Vuitton logo.
Louis Vuitton filed suit alleging trademark infringement, counterfeiting, unfair competition, false designation of origin, trade dress infringement, trademark dilution and related state law claims. The district court denied Louis Vuitton’s request for a preliminary injunction, stating that "point-of-sale confusion was unlikely." Focusing its analysis on the simultaneous viewing of the goods, the district court found that "[s]ignificant differences between the handbags are easily discernible whether one views the handbags side-by-side or from a distance." Louis Vuitton appealed.
The Second Circuit reversed and remanded the case cautioning the lower court to focus on market conditions when analyzing the ultimate issue of the likelihood of consumer confusion. According to the Second Circuit, the Lanham Act "requires a court to analyze the similarity of the products in light of the way in which the marks are actually displayed in their purchasing context … Though two products may be readily differentiated when carefully viewed simultaneously, those same two products may still be confusingly similar in the eyes of ordinary consumers encountering the products individually under typical confusion, and that ‘real world’ confusion is the confusion that the Act seeks to eliminate." Given the market conditions and claims of initial-interest and post-sale confusion, the lower court should have "considered the context in which the marks are displayed and the totality of factors that could cause confusion among prospective purchasers." In fact, the Second Circuit specifically instructed the lower court "should give particular weight to any evidence submitted by the parties addressing the overall impression that consumers are likely to have of the handbags when they are viewed sequentially, and in different settings, rather than simultaneously."
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