## Facts

- A&H Sportswear, Inc. and Mainstream Swimsuits, Inc. manufactured swimwear sold under the registered trademark MIRACLESUIT.
- Victoria’s Secret sold lingerie under the mark THE MIRACLE BRA and later extended THE MIRACLE BRA branding to swimwear.
- A&H alleged trademark infringement under the Lanham Act based on (a) direct confusion (consumers associating THE MIRACLE BRA swimwear with A&H) and (b) reverse confusion (consumers believing MIRACLESUIT originated with or was affiliated with Victoria’s Secret).
- Victoria’s Secret commonly displayed its “Victoria’s Secret” housemark with THE MIRACLE BRA and at times used a disclaimer stating no relation to MIRACLESUIT.
- After an initial bench-trial ruling applying a “possibility of confusion” standard, the case was remanded to apply the correct “likelihood of confusion” standard.
- On remand, the district court found no likelihood of direct or reverse confusion and denied injunctive relief, treating reverse confusion as not meaningfully distinct from direct confusion.

## Issues

1. Whether use of THE MIRACLE BRA on swimwear created a likelihood of direct consumer confusion with A&H’s MIRACLESUIT mark under the Lanham Act.
2. Whether the district court erred by collapsing reverse confusion into direct confusion analysis, including by requiring a threshold showing of substantial economic disparity and failing to apply the Lapp factors in a reverse-confusion manner.

## Decision

- The Third Circuit affirmed the judgment rejecting A&H’s direct confusion claim.
- The Third Circuit vacated the judgment as to reverse confusion and remanded for further proceedings.
- For direct confusion, the court held that the record, evaluated under the Lapp factors, did not establish a likelihood that consumers would believe THE MIRACLE BRA swimwear came from or was affiliated with A&H.
- For reverse confusion, the court held that the district court applied an incorrect legal framework and must conduct a distinct reverse-confusion analysis using a modified application of the Lapp factors, without any threshold economic-disparity prerequisite.

## Legal Principles

- Lanham Act infringement turns on “likelihood of confusion,” not a mere “possibility of confusion.”
- Likelihood of confusion is assessed using the Lapp multi-factor test; the factors are flexible and not all must favor the plaintiff.
- Mark similarity must be assessed as encountered in the marketplace, including the effects of housemarks, packaging, and disclaimers.
- A well-known housemark may reduce the likelihood of direct confusion, though it is not automatically dispositive.
- Reverse confusion is a distinct theory of Lanham Act liability protecting a senior user when a junior user’s market presence and advertising cause consumers to view the senior user’s goods as originating from the junior user.
- Reverse confusion does not require a threshold showing of substantial economic disparity; relative commercial strength is considered within the factor analysis.
- In reverse confusion, the “strength of the marks” factor is reframed: the junior user’s commercial strength can support liability because it may overwhelm the senior user’s market identity.
- In reverse confusion, “intent” focuses on whether the junior user knew of the senior mark and proceeded with marketing likely to overpower the senior user’s association with its own mark, rather than classic passing off.

## Conclusion

The Third Circuit upheld the rejection of direct confusion between MIRACLESUIT and THE MIRACLE BRA swimwear but required a separate, properly structured reverse-confusion inquiry, clarifying that reverse confusion is an independent Lanham Act theory evaluated through a modified Lapp analysis without any preliminary economic-disparity gatekeeping.


A&H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198 (3d Cir. 2000)