The Fashion Exchange LLC v. Hybrid Promotions, LLC

Background

The Fashion Exchange LLC (TFE) asserted common-law rights in HYBRID and rights in its registered HYBRID & COMPANY trademark. Hybrid Promotions, Jarrod Dogan, Gavin Dogan, Jeff Caldwell, and 32 defendant retailers used or were associated with HYBRID, HYBRID TEES, and HYBRID APPAREL marks. The parties sold clothing through some of the same retailers and similar sales channels, including fashion trade shows and online storefronts.

TFE brought claims under the Lanham Act, the federal trademark statute, for trademark infringement and unfair competition, along with New York common-law unfair-competition claims. TFE sought declaratory, injunctive, and monetary relief. The defendants asserted defenses and counterclaims, including claims concerning ownership and cancellation of TFE’s registration. In this order, the parties cross-moved for summary judgment on whether defendants’ marks were likely to confuse consumers with TFE’s marks and, for TFE, on related liability issues.

Legal standard and analysis

Summary judgment is appropriate when the undisputed evidence shows that a party is entitled to judgment as a matter of law. For trademark infringement, the court applied the eight-factor Polaroid test used in the Second Circuit to assess the probability of consumer confusion. The factors concern the marks’ strength, similarity, the products’ competitive proximity, the possibility of entering the other party’s market, actual confusion, bad faith, product quality, and consumer sophistication.

The court found that TFE’s registered HYBRID & COMPANY mark, and HYBRID as applied to apparel, were inherently distinctive. But the court also found that TFE had not shown that either mark had acquired distinctiveness in the marketplace. TFE provided insufficient evidence of advertising, consumer studies, media coverage, attempts to copy the marks, exclusive use, or sales success. The court therefore found the strength factor weak or, at most, neutral. Third-party use of “Hybrid” slightly weakened the marks.

The similarity factor favored TFE because the marks shared the primary word “Hybrid” and had similar visual presentations. The products were in some competitive proximity because both sides sold clothing through overlapping stores and channels, although their products were not identical. Because the products were already in competitive proximity, the court found no separate gap that defendants would need to bridge.

The court reaffirmed its earlier findings that TFE had not shown meaningful actual confusion and that defendants had not acted in bad faith. TFE’s evidence consisted at most of vague testimony about confusion at trade shows and six emails over ten years, with only one predating the lawsuit. The quality factor was neutral because the record did not substantiate the relative quality of the products. The consumer-sophistication factor was also at most neutral because the low prices did not establish that consumers were unsophisticated, and the alleged confusion primarily involved retailers, which the court considered sophisticated buyers.

Holding and disposition

After balancing the factors, the court held as a matter of law that defendants’ use of HYBRID, HYBRID TEES, and HYBRID APPAREL was not likely to cause confusion with TFE’s HYBRID and HYBRID & COMPANY marks. The court emphasized the long period of concurrent use without meaningful actual confusion, the lack of consumer surveys, and TFE’s deficient evidence of marketplace distinctiveness.

The court explained that the Patent and Trademark Office’s earlier findings of likely confusion did not control the infringement analysis. The agency’s registration analysis differed from the court’s required evaluation of the marketplace under the Polaroid factors and did not address several factors, including actual confusion, bad faith, marketplace distinctiveness, product quality, and consumer sophistication.

Defendants’ motion for summary judgment was granted, and TFE’s cross-motion was denied. The court dismissed TFE’s trademark-infringement claims and its Lanham Act unfair-competition claims because those claims required a likelihood of confusion. The Clerk of Court was directed to close the action. The opinion separately stated that the question of injunctive relief was moot.