Holding that confusion was likely between the trademarks ADVICOR and ALTOCOR, both of which were used with prescription cholesterol-altering medications, the U.S. Court of Appeals for the Third Circuit reversed the prior decision of the district court and required the district court to enter an expedited order enjoining the marketing and sale of the defendant’s cholesterol-lowering medicine. Kos Pharmaceuticals, Inc. v. Andrx Corporation; Andrx Laboratories, Inc., Case No. 03-3977 (May 24, 2004) (Oberdorfer J.).

Kos Pharmaceuticals began marketing a medication to improve cholesterol levels under the trademark ADVICOR in 2001. Soon thereafter, Kos learned of Andrx’s plans to market a similar medicine under the ALTOCOR name. Kos attempted to dissuade or prevent Andrx’s use of the ALTOCOR mark several times before Andrx actually started marketing ALTOCOR in July 2002. By August 2003, when Kos filed a complaint against Andrx, both companies had already spent tens of millions of dollars on promotion and advertising for these particular medicines, and both ADVICOR and ALTOCOR had been prescribed more than 300,000 times, respectively.

In its complaint, Kos claimed that Andrx’s use of the ALTOCOR mark constituted trademark infringement and unfair competition. Kos also filed an application for a preliminary injunction, which the district court denied. In its denial of the preliminary injunction, the district court offered a limited analysis of the 10 likelihood of confusion factors considered in the Third Circuit, discussing only two of these factors which it held to favor Kos. It did not provide any analysis regarding the remaining eight factors, aside from a conclusory statement that the remaining eight factors did not indicate a likelihood of confusion.

The Third Circuit found that "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 [likelihood of confusion] factors." With regard to the first error, the appellate court criticized the district court for focusing only on confusion related to the misdispensation of medication and ignoring the more appropriate broad confusion considerations, such as overall confusion as to the source of the medicines or deception of any kind. The second error, according to the Third Circuit, was the district court’s failure to consider and weigh each relevant factor to assess the likelihood of confusion. Providing trademark practitioners a wealth of dicta relating to each factor, the Third Circuit went on to discuss each factor in a likelihood of confusion analysis in detail.

Practice Note:It is important to recognize, as the district court failed to do, that the scope of the trademark protection under the Lanham Act goes beyond protection against "the traditional source-of-origin confusion." Therefore, any evidence that shows there is confusion among vendors, investors or the general public created by a trademark or trade name similar to yours is evidence of actual confusion relevant to your trademark infringement claim.

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