## Facts

- Swarovski, a manufacturer and distributor of crystal and luxury products, owned federal trademark registrations for the mark “SWAROVSKI” and actively policed its use.
- Building #19 operated discount retail stores and promoted salvage, overstock, and discontinued goods through attention-grabbing newspaper advertisements.
- After tornado damage to a warehouse holding Swarovski crystal figurines, Building #19 acquired some genuine Swarovski inventory through secondary channels.
- Building #19 ran a newspaper advertisement featuring the word “Swarovski” in very large type alongside its own branding, promoting “genuine Swarovski crystal.”
- The advertisement included a disclaimer stating Swarovski did not endorse the sale and was not affiliated with Building #19.
- Swarovski sent a cease-and-desist letter and then filed suit asserting trademark infringement and related claims.

## Issues

1. Whether the district court abused its discretion by issuing a preliminary injunction that restricted the size and prominence of Building #19’s use of “Swarovski” in advertising genuine goods.
2. Whether the district court made adequate findings to support the preliminary-injunction factors, particularly likelihood of confusion and irreparable harm.
3. How disclaimers and overall ad presentation should be evaluated when a reseller uses a mark to identify genuine trademarked products.

## Decision

- The First Circuit vacated the preliminary injunction and remanded.
- The court held the district court’s oral findings were too terse to permit meaningful appellate review of likelihood of confusion and irreparable harm.
- The court emphasized it was not deciding the merits of the trademark dispute or the ultimate permissibility of Building #19’s advertising.

## Legal Principles

- A preliminary injunction requires supportable findings on likelihood of success, irreparable harm, balance of hardships, and public interest, stated with enough specificity to allow appellate review.
- Resellers may generally use a trademark to truthfully identify genuine goods, but such use may be limited if it is likely to cause confusion about source, sponsorship, endorsement, or affiliation.
- Disclaimers may reduce confusion, but their effectiveness must be evaluated in context, including the overall visual impression and consumer setting.
- Interim relief restricting commercial advertising must be justified by a clear showing of likely harm and a reasoned explanation connecting the specific restriction to the asserted harm.

## Conclusion

The First Circuit required fuller, reviewable findings before restricting a reseller’s prominent use of a famous mark in advertisements for genuine goods, and it returned the case for a more complete confusion and harm analysis and reconsideration of any interim remedy.


Swarovski Aktiengesellschaft v. Building #19, Inc., 704 F.3d 44 (1st Cir. 2013)