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From pocket to wrist: decision for Vortic confirmed on appeal | Dorsey & Whitney LLP


We have previously written about the trademark conflict between Vortic, a watchmaker who restores old pocket watches and converts them into wristwatches, and the revered Hamilton Watch Company, which produced its first watch in the 1890s and is still in existence today. activity today. Vortic uses a restored movement (the internal mechanism), dial and hands of the pocket watches produced by Hamilton to create the wristwatch “The Lancaster”, but the other parts are produced by Vortic and the final product is also assembled by Vortic.

We previously reported that Judge Alison Nathan of the Southern District of New York had dismissed Hamilton’s motion for summary judgment and motion for reconsideration, concluding that factual disputes persisted and the case at trial would revolve around the issue of the likelihood of consumer confusion. In addition to considering the standard Polaroid because the alleged infringement involved refurbished products, Justice Nathan applied a “crucial additional factor” to the Supreme Court ruling in Champion Spark Plug Co. vs. Sanders, 331 US125, 128-31 (1947), whether Vortic has provided adequate disclosure of the nature of the watch being sold as a “modified genuine product”.

Following a one-day trial, Justice Nathan concluded that Vortic fully disclosed the restoration of the watch and the lack of affiliation with Hamilton (the Champion factor), then considered the relevant Polaroid factors to conclude that there is no likelihood of confusion. Judge Nathan explained that under Champion, “Full disclosure” of the identity of the conservator and the used character of the product protects the seller of second-hand goods. Justice Nathan gave substantial weight to this additional factor of “full disclosure” under Champion, and as she considered all the Polaroid also, it noted that only three of these factors – actual confusion, the good faith of the defendant and the sophistication of the buyers – were “unquestionably relevant”, and that each of these three factors weighed against a finding of likelihood of confusion. .

Hamilton appealed to the Second Circuit Court of Appeals, which upheld Judge Nathan’s ruling earlier this month. While Hamilton has challenged the factual findings and legal analysis of the district court, the legal challenge is what is interesting about the appeal. The second circuit initially agreed that the framework established by Champion applied to this dispute, despite Hamilton’s argument that Champion did not apply because the “reconditioning or repair” that went into the Lancaster was so significant that it was a new watch containing Hamilton parts, and not “a genuine modified Hamilton product” .

The most interesting part of the Second Circuit review, however, was how the Champion the frame interacts with the Polaroid The factors. Hamilton argued that the district court erred in not first determining likelihood of confusion under the Polaroid factors before moving on to the “full disclosure” analysis under Champion, and that like an affirmative defense, Vortic (the respondent) bears the burden of establishing that the standard of “full disclosure” has been met. The Second Circuit disagreed, finding that the district court had not erred in refusing to require Vortic to prove the effectiveness of his disclosures under Champion. Although Vortic presented evidence that his disclosures were effective, the Second Circuit held that, given that a plaintiff in a trademark infringement action bears the burden of establishing a likelihood of confusion to the consumer, the court of district has properly examined Champion and disclosures made by Vortic to determine whether Hamilton (the claimant) has discharged this burden. Finally, in a trademark case involving refurbished products, the Second Circuit reaffirmed that courts must consider both Champion and Polaroid to determine whether a claimant has discharged his onus, but that there is no firm and swift order in which a court must undertake this analysis.