## Facts

- Virgin Enterprises Limited owned incontestable U.S. registrations for VIRGIN and VIRGIN MEGASTORE covering “retail store services in the fields of … computers and electronic apparatus.”
- Virgin operated well-known VIRGIN-branded businesses, including large Virgin Megastores in New York City selling music and consumer electronics.
- By 1999, Virgin had entered wireless telecommunications abroad and planned expansion into the United States.
- Defendants operated retail stores and kiosks in New York and Pennsylvania selling wireless phones, accessories, and related services under VIRGIN WIRELESS and other VIRGIN-formative names.
- Defendants obtained PTO registrations for VIRGIN WIRELESS and related marks in the wireless-communications field; the PTO later refused Virgin’s telecommunications application based on defendants’ registrations.
- Virgin sued under Lanham Act § 32, alleging infringement of its registered marks and presented evidence of actual consumer confusion.
- The district court denied Virgin’s motion for a preliminary injunction, reasoning that Virgin’s registrations did not cover wireless-phone retailing and that Virgin had not shown likely confusion.

## Issues

1. Whether Virgin’s registrations for retail services involving “electronic apparatus” reasonably covered retail sale of wireless telephones and related goods and services.
2. Whether defendants’ use of VIRGIN WIRELESS created a likelihood of confusion under the *Polaroid* factors.
3. Whether equitable defenses, including laches, defeated or limited preliminary injunctive relief.

## Decision

- The Second Circuit reversed the denial of a preliminary injunction and remanded with instructions to enter injunctive relief.
- The court held Virgin was likely to succeed on the merits of its Lanham Act infringement claim.
- The court concluded the district court construed Virgin’s service-mark registrations too narrowly and misapplied the likelihood-of-confusion analysis.
- The court rejected laches on the record presented and found the balance of hardships favored Virgin given the risk of ongoing confusion and harm to goodwill.

## Legal Principles

- Service-mark registration language is interpreted according to ordinary meaning; “electronic apparatus” can encompass wireless telephones and related equipment when assessing the scope of registered retail services.
- Likelihood of confusion in the Second Circuit is assessed under the *Polaroid* factors, including strength of the mark, similarity of the marks, proximity of the goods/services, likelihood of bridging the gap, evidence of actual confusion, and defendant’s intent.
- A strong, widely recognized mark used across multiple business lines increases the likelihood that consumers will assume sponsorship or affiliation when the same mark appears in a related field.
- Evidence of actual confusion is highly probative of likely confusion and supports preliminary injunctive relief in trademark cases.
- A defendant’s later PTO registrations in a specific field do not displace a senior user’s priority where the challenged use is likely to confuse as to source or affiliation.
- Laches generally requires unreasonable delay and resulting prejudice; prompt action upon learning of the challenged use weighs against the defense at the preliminary-injunction stage.

## Conclusion

The Second Circuit held that Virgin’s incontestable VIRGIN retail-service registrations reasonably covered defendants’ wireless-phone retail activity and that defendants’ VIRGIN WIRELESS branding was likely to confuse consumers, warranting a preliminary injunction to prevent continued harm to Virgin’s mark and goodwill.


Virgin Enters. Ltd. v. Nawab, 335 F.3d 141 (2d Cir. 2003)