20-3369-cv Hamilton International Ltd. v. Vortic LLC

United States Court of Appeals for the Second Circuit August Term, 2020

(Argued: June 3, 2021 Decided: September 14, 2021)

Docket No. 20-3369 _____________________________________

HAMILTON INTERNATIONAL LTD., Plaintiff-Appellant, v.

VORTIC LLC, D/B/A VORTIC WATCH CO., VORTIC TECHNOLOGY LLC, AND ROBERT THOMAS CUSTER, Defendants-Appellees. _____________________________________ Before: LOHIER AND NARDINI, CIRCUIT JUDGES, AND CRONAN, DISTRICT JUDGE *

Hamilton International Ltd. sued Vortic LLC and its founder, Robert Thomas Custer, for selling wristwatches that featured restored antique pocket watch parts with Hamilton’s trademark. Following a bench trial, the District Court entered judgment on all claims in favor of Vortic and Custer after finding that Vortic’s use of the mark was not likely to cause consumer confusion. Hamilton appeals that decision, primarily arguing that the District Court erroneously applied Champion Spark Plug Co. v. Sanders,

(1947), a case involving trademark infringement in the context of used goods, when assessing the sufficiency of Vortic’s disclosures. Arguing that a defendant in a trademark

*Judge John P. Cronan, of the United States District Court for the Southern District of New York, sitting by designation. infringement action bears the burden of demonstrating the adequacy of its disclosures, and that its burden varies with the degree of consumer confusion, Hamilton maintains that the District Court should have first analyzed the factors identified in Polaroid Corp. v. Polarad Electronics Corp.,

(2d Cir. 1961), before applying Champion. Hamilton also challenges the District Court’s factual findings in evaluating the Polaroid factors. We reject each of Hamilton’s arguments. In doing so, we confirm that a plaintiff in a trademark infringement suit bears the burden of proving that a defendant’s use of its mark is likely to mislead consumers, even when Champion is implicated, and that no particular order of analysis is required, provided that the district court considers all appropriate factors in light of the circumstances presented. The District Court’s judgment is AFFIRMED.

MICHAEL ASCHEN, Abelman Frayne & Schwab, New York, New York (Anthony DiFilippi, on the brief), for Plaintiff-Appellant

ROBERT D. LANTZ, Castle Lantz Maricle, LLC, Denver, Colorado; Jin-Ho King (on the brief), Milligan Rona Duran & King LLC, Boston, Massachusetts, for Defendants- Appellees

CRONAN, District Judge:

Plaintiff-Appellant Hamilton International Ltd. (“Hamilton”), a large and

well-known manufacturer of watches, brought suit against Defendants-Appellees

Vortic LLC, doing business as Vortic Watch Co. (“Vortic”), and its founder Robert

Thomas Custer, alleging trademark infringement, counterfeiting, unfair

2 competition, and dilution. 1 Vortic, also a watchmaker, sold “The Lancaster,” a

watch that featured refurbished antique pocket watch parts retaining Hamilton’s

original trademark. Hamilton now appeals from a final judgment entered in favor

of Vortic and Custer in the United States District Court for the Southern District of

New York (Nathan, J.) following a one-day bench trial. See Hamilton Int’l Ltd. v.

Vortic, LLC,

(S.D.N.Y. 2020).

This case turns on the question of consumer confusion. The Supreme Court

in Champion Spark Plug Co. v. Sanders held that in the context of refurbished goods,

the likelihood of consumer confusion is determined by looking to the disclosures

a second-hand dealer provides to purchasers.

, 128–31 (1947). The

District Court, relying on Champion, first concluded that Vortic had fully disclosed

the watch’s restoration and lack of affiliation with Hamilton. The District Court

then considered the general factors that we have identified as informing the

likelihood of confusion in trademark infringement actions. See Polaroid Corp. v.

Polarad Elecs. Corp.,

(2d Cir. 1961). Weighing both Vortic’s full

disclosure under Champion and the relevant Polaroid factors, the District Court

1 At trial, the District Court dismissed Vortic Technology LLC as a defendant without objection.

3 found no likelihood that a significant number of ordinary prudent purchasers

would be misled by the use of Hamilton’s mark on The Lancaster.

On appeal, Hamilton challenges the District Court’s factual findings and

analysis. The District Court’s factual findings—which we review for clear error—

were supported by the trial record. The District Court correctly evaluated those

findings in light of the legal standards established in Champion and Polaroid to

conclude that Hamilton failed to prove a likelihood of consumer confusion. In

affirming the District Court, we confirm that a plaintiff in a trademark

infringement suit bears the burden of proving that a defendant’s use of the mark

is likely to mislead consumers, even when Champion is implicated, and that no

particular order of analysis is required provided that the court considers all

appropriate factors in light of the circumstances of the case. We therefore AFFIRM

the judgment of the District Court.

I. BACKGROUND

A. Relevant Facts

The following facts were established at the bench trial held on February 19,

2020.

4 Hamilton, or its predecessor, 2 has owned the “Hamilton” trademark since

1909. Prior to 1969, Hamilton manufactured pocket watches at its U.S. factory in

Lancaster, Pennsylvania. Custer founded Vortic in 2013 and, seeking to “preserve

American history,” endeavored to make a watch that would be “100% Made in

America.” App’x at 82, 369–70. Custer discovered, however, that at the time, no

active companies in the United States produced watch movements, i.e., “the gears

and springs in a system needed to tell time.” Id. at 370. As a result, Vortic salvaged

and restored parts from antique American-made pocket watches originally

manufactured in the late 1800s and early 1900s and then encased them in new

wristwatches. Those included antique parts from watches bearing Hamilton’s

trademark.

At issue is Vortic’s line of wristwatches called “The Lancaster.” Named

after the Pennsylvania city where Hamilton was originally based, The Lancaster

features restored antique pocket watch movements and front dials made by the

Hamilton Watch Company between 1894 and 1950. The Lancaster has a large

pocket watch-style knob located at the 12 o’clock position. The watch’s wrist strap

2 Before 1971, Hamilton’s predecessor, the Hamilton Watch Company, manufactured watches in America. Hamilton is now owned by Swatch Group, Ltd., a Swiss company.

5 and the case surrounding its movements and dial—as well as various internal

engineering parts such as the crowns, screws, and inserts—were manufactured by

Vortic or came from modern sources in the United States. Because Vortic used a

restored original front dial, Hamilton’s trademark is readily visible on the front of

the watch. The back of The Lancaster is encased in a glass cover, revealing the

watch’s movements, which feature the engraved words, “Hamilton Watch

Lancaster, PA.” The back case is surrounded by a metal ring with the words

“Vortic Watch Co.” and “The Lancaster” engraved on it, along with Vortic’s serial

number for the watch. Below is a picture of the front and back of The Lancaster:

6 App’x at 216–17.

Vortic produced and distributed fifty-eight of these watches from 2014 to

2018. Each buyer received the watch in a wooden box with a booklet that

displayed Vortic’s logo and described Vortic’s manufacturing, assembly, and

restoration process. The box also contained an original watchmaking certificate,

when available, as well as a “Vortic Watch Company Authentication Card.” That

card provided the watch’s Vortic serial number and movement serial number, and

was signed by the Vortic watchmaker who did the conversion. Vortic’s

advertisements for The Lancaster similarly emphasized the antique and authentic

nature of the watch’s parts.

B. Procedural Background

Hamilton caught wind of The Lancaster and sent Vortic a cease-and-desist

letter on July 10, 2015. Hamilton filed suit against Vortic two years later, on July

21, 2017. The Complaint alleged that Vortic, at Custer’s direction, sold The

Lancaster with Hamilton’s mark and without Hamilton’s consent or authorization,

causing confusion as to the watch’s origin and giving the false impression that the

watch was offered by, or affiliated with, Hamilton. Hamilton pleaded claims of

7 trademark infringement and counterfeiting in violation of the Lanham Act,

and 1116; false designation of origin and unfair competition, also in

violation of the Lanham Act,

(a); common law trademark

infringement; and trademark infringement, dilution, unfair competition, and

injury to business under New York General Business Law section 360. Hamilton

sought injunctive and declaratory relief, as well as monetary damages.

On February 15, 2019, Hamilton moved for summary judgment on all its

claims. The District Court denied Hamilton’s motion, on September 30, 2019,

finding genuine disputes of material facts as to both disclosure under Champion

and the application of the Polaroid factors. Hamilton Int’l Ltd. v. Vortic LLC,

, 618–22 (S.D.N.Y. 2019). On January 10, 2020, the District Court

denied Hamilton’s motion for reconsideration of that decision. Hamilton Int’l Ltd.

v. Vortic LLC, No. 17 Civ. 5755 (AJN),

(S.D.N.Y. Jan. 10, 2020).

C. The Bench Trial and the District Court Judgment

The District Court held a one-day bench trial on February 19, 2020. On

September 11, 2020, the District Court issued its Findings of Fact and Conclusions

of Law, entering judgment in favor of Vortic and Custer on all of Hamilton’s

claims. Hamilton Int’l Ltd. v. Vortic LLC,

(S.D.N.Y. 2020).

8 The District Court focused on the likelihood of consumer confusion,

applying the Supreme Court’s decision in Champion as well as the factors we

identified in Polaroid. The District Court explained that, under Champion, “[f]ull

disclosure” of the identity of the restorer and the used nature of the product

protects the seller of second-hand goods from liability for a claim of trademark

infringement.

(alteration in original). Accordingly, the District Court

gave “strong weight to the ‘full disclosure’ factor” under Champion, but “also

consider[ed] the traditional Polaroid variables it [found] to be applicable.”

.

The District Court began by examining Vortic’s promotional materials and

its website, concluding that these “materials do not suggest any affiliation or

sponsorship between Vortic and Hamilton but rather convey accurately that the

restored Hamilton movements and parts are only ‘constituent[s] in the article now

offered as new and changed.’”

(alteration in original) (quoting Prestonettes, Inc.

v. Coty,

(1924)). The District Court then examined the watch itself.

The District Court pointed to particular characteristics of The Lancaster which

would lead reasonable consumers to view it “as restored antique pocket watch

movement, face, and hands that have been reincorporated into a new wristwatch.”

9

at 663–64. The District Court noted that The Lancaster was bigger than a

regular wristwatch, had a large knob located at the 12 o’clock position rather than

the 3 o’clock position typical for wristwatches, and the “hands, face, and

movement ha[d] a patina, style, and look that convey[ed] that they [were] restored

antiques.” Id. at 664. The District Court also found that an ordinary prudent

purchaser viewing the watch in isolation would conclude “that the Hamilton mark

is only displayed because Hamilton created the original movement, face, and

hands that have subsequently been restored.” Id. The District Court “note[d] that

‘Vortic,’ ‘Lancaster,’ and the serial number are all prominently engraved on the

case while the Hamilton mark is only visible inside the glass case, on a movement

and face that appear obviously antique.” Id.

The District Court then turned to the Polaroid factors. While the District

Court discussed all of the factors, it noted that actual confusion, the defendant’s

good faith, and the sophistication of the buyers were the only “Polaroid factors that

[were] indisputably relevant in this case.” Id. at 666–67; see Hamilton Int’l Ltd., 414

F. Supp. 3d at 621 (on summary judgment, finding only these three factors to be

relevant). The District Court found no evidence of actual confusion, discounting

the only evidence that Hamilton offered at trial—one potential customer’s email

10 to a Hamilton brand manager inquiring about a vintage Hamilton watch—because

of concerns about the reliability of that email. See Hamilton Int’l Ltd., 486 F. Supp.

3d at 667. The District Court further found that Vortic and Custer demonstrated

good faith in producing The Lancaster, crediting Custer’s testimony and

“concluding that he did not intend to cause consumer confusion but rather sought

to ‘preserve American history’ by salvaging and restoring the hearts of antique

pocket watches.” Id. (citing Custer’s testimony). Lastly, the District Court noted

the highly sophisticated nature of the customer base. Id. at 668. For an expensive

watch like The Lancaster, the District Court reasoned, potential customers “would

be particularly attuned to the disclosure provided and would almost certainly seek

out easily accessible information about the watch before making this substantial

investment.” Id.

After weighing the full disclosure under Champion and the Polaroid factors,

the District Court found no likelihood of confusion. Id. The District Court

therefore entered judgment in favor of Vortic and Custer on Hamilton’s federal

trademark infringement claim, as well as on its other claims, each of which also

required some degree of consumer confusion. Id. at 668–69.

11 II. DISCUSSION

A. Standard of Review

“In reviewing the decision of a district court following a bench trial, we

review findings of fact for clear error and conclusions of law de novo.” O’Mara v.

Town of Wappinger,

, 697 (2d Cir. 2007) (Katzmann, J.). “Under the

clearly erroneous standard, ‘the reviewing court must give due regard to the trial

court’s opportunity to judge the witnesses’ credibility.’” Process Am., Inc. v.

Cynergy Holdings, LLC,

(2d Cir. 2016) (quoting Fed. R. Civ. P.

52(a)(6)). “‘We are not allowed to second-guess the court’s credibility

assessments,’ and ‘[w]here there are two permissible views of the evidence, the

factfinder’s choice between them cannot be clearly erroneous.’”

(alteration in

original) (quoting Diesel Props S.r.l. v. Greystone Bus. Credit II LLC,

(2d Cir. 2011)). On the issue of consumer confusion in federal trademark

infringement actions, a trial court’s findings as to each Polaroid factor are typically

reviewed for clear error, with the court’s weighing of those factors reviewed de

novo. See Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.,

(2d Cir.

2009).

12 B. Hamilton’s Trademark Infringement Claim: Likelihood of Confusion

The primary question on appeal is whether the District Court properly

found in favor of Vortic and Custer on Hamilton’s federal trademark infringement

claim. A plaintiff alleging trademark infringement in violation of the Lanham Act

“must demonstrate that (1) ‘it has a valid mark that is entitled to protection’ and

that (2) the defendant’s ‘actions are likely to cause confusion with [that] mark.’”

Tiffany & Co. v. Costco Wholesale Corp.,

, 84 (2d Cir. 2020) (alteration in

original) (quoting The Sports Auth., Inc. v. Prime Hosp. Corp.,

(2d

Cir. 1996)). The parties do not dispute the validity of Hamilton’s trademark or that

The Lancaster featured that trademark. We therefore focus on whether the District

Court erred in finding no likelihood of consumer confusion in the watch’s use of

that trademark.

A plaintiff must show “a probability of confusion, not a mere possibility,”

affecting “numerous ordinary prudent purchasers.” Gruner + Jahr USA Publ’g v.

Meredith Corp.,

(2d Cir. 1993). This “includes confusion of any

kind, including confusion as to source, sponsorship, affiliation, connection, or

identification.” Star Indus., Inc. v. Bacardi & Co.,

(2d Cir. 2005)

(quoting Guinness United Distillers & Vintners B.V. v. Anheuser-Bush, Inc., 64

, 1041 (S.D.N.Y. 2002)); see Gottlieb Dev. LLC v. Paramount Pictures

Corp.,

(S.D.N.Y. 2008) (“The hallmark of infringement is

the likelihood of confusion by the buying public between the plaintiff’s goods or

services and that of the defendant.” (first citing Fed. Express Corp. v. Fed. Espresso,

Inc.,

, 174 (2d Cir. 2000); and then citing Estee Lauder Inc. v. The Gap,

Inc.,

, 1508–09 (2d Cir. 1997))). To prove confusion, a plaintiff may

show that the public believed “the owner of the mark actually produced the item

and placed it on the market,” or that the public believed “the mark’s owner

sponsored or otherwise approved the use of the trademark.” Star Indus., Inc., 412

F.3d at 383–84 (internal quotation marks and citation omitted).

We have identified a non-exhaustive list of factors for district judges to

analyze when considering whether a mark’s use is likely to cause confusion. See

Polaroid Corp.,

. These so-called Polaroid factors are: (1) “the strength

of [the] mark”; (2) “the degree of similarity between the two marks”; (3) “the

proximity of the products”; (4) “the likelihood that the prior owner will bridge the

gap”; (5) “actual confusion”; (6) “the reciprocal of defendant’s good faith in

adopting its own mark”; (7) “the quality of defendant’s product”; and (8) “the

14 sophistication of the buyers.” Id.; accord Starbucks Corp.,

; Star Indus.,

Inc.,

.

1. The District Court’s Application of Champion

We begin with Hamilton’s argument that the District Court erred in

applying Champion to assess whether there was a likelihood of consumer

confusion. The District Court identified and applied the Polaroid factors, focusing

on the ones that it found particularly relevant in this action. See Hamilton Int’l Ltd.,

486 F. Supp. 3d at 666–68. But the District Court also correctly recognized that

application of these non-exhaustive factors is not a “mechanical process,” and

“depending on the complexity of the issues, ‘the court may have to take still other

variables into account.’” Id. at 662 (first quoting Guthrie Healthcare Sys. v.

ContextMedia, Inc.,

(2d Cir. 2016); and then quoting Savin Corp. v.

Savin Grp.,

(2d Cir. 2004)); accord Arrow Fastener Co. v. Stanley

Works,

(2d Cir. 1995) (“No single factor is dispositive, and cases

may certainly arise where a factor is irrelevant to the facts at hand.”). Thus, while

Polaroid articulated general standards to apply in assessing consumer confusion,

particular situations may call for a more refined analysis. In its 1947 decision in

Champion, the Supreme Court identified one such situation.

15 In Champion, a manufacturer of spark plugs with the trademark

“Champion” sued a second-hand dealer who collected used “Champion” plugs,

refurbished them, and sold them.

. The Supreme Court found it

permissible for the reused plugs to retain the “Champion” trademark, despite the

second-hand dealer lacking authorization to use that trademark, because of

disclosures made by that seller.

at 129–30. The Court determined that the

retention of the “Champion” logo would not mislead consumers, because the

plugs were “nevertheless Champion plugs and not those of another make,” and

contained the words “Used” or “Repaired” stamped on the plugs, which “serve[d]

the requirements of full disclosure.”

at 128–30. In reaching this result, the

Court explained that while “inferiority is expected in most second-hand articles,”

any “[i]nferiority is immaterial so long as the article is clearly and distinctively

sold as repaired or reconditioned rather than as new.”

at 129–30. Citing its

prior decision in Prestonettes, 3 the Court explained that it “is wholly permissible”

3 In Prestonettes, the plaintiff sold toilet powder and perfume.

. The defendant purchased the plaintiff’s powder, added “a binder to give it coherence,” and sold the substance in a metal case.

The defendant also bought the plaintiff’s perfume and repackaged it in smaller bottles for resale.

at 366– 67. The district court allowed the defendant to continue selling both products, as long as it attached certain clarifying labels which included the plaintiff’s

16 for a second-hand dealer to obtain an advantage from the trademark, “so long as

the manufacturer is not identified with the inferior qualities of the product

resulting from wear and tear or the reconditioning by the dealer.” Id. at 130. “Full

disclosure,” the Court explained, “gives the manufacturer all the protection to

which he is entitled.” Id. The Champion Court cautioned, however, that “[c]ases

may be imagined where the reconditioning or repair would be so extensive or so

basic that it would be a misnomer to call the article by its original name, even

though the words ‘used’ or ‘repaired’ were added.” Id. at 129. The takeaway from

Champion is that, when a used “genuine product” is resold after being refurbished,

the seller’s disclosures and the extent of a product’s modifications are significant

factors to consider in whether that seller is liable for trademark infringement.

trademarked name. See id. at 367. The Supreme Court found no trademark violation in the sale of goods labeled as such. Specifically, the Court determined that the defendant “by virtue of its ownership had a right to compound or change what it bought,” and as long as the packaging truthfully disclosed that it contained the plaintiff’s product, no trademark infringement occurred in the sale even if the packaging used the plaintiff’s trademarked name. Id. at 368–69. The Court explained that a trademark does not “prohibit the use of the word or words,” and “[w]hen the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth.” Id. at 368. The defendant’s use of the trademark “to say that the trade-marked product is a constituent in the article now offered as new and changed,” id. at 369, was therefore permissible.

17 Hamilton argues that the “reconditioning or repair” that went into The

Lancaster was so extensive that the District Court erred in applying Champion in

the first place. According to Hamilton, The Lancaster is not “a modified genuine

Hamilton product,” but rather a “new watch that contains various Hamilton parts.”

We find no error in the District Court’s determination that the facts as found at

trial brought this case under Champion.

The District Court determined, with ample support from the evidence

adduced at trial, that Vortic used genuine, original parts from pocket watches

made by Hamilton, refurbished and repaired them, and modified them into a

wristwatch. The only modification to the original movements was the

replacement of a lever which makes it easier for users to change the time.

Describing this as an “apparently slight modification,” the District Court noted

that Hamilton failed to put forth any reason why such a modification would have

been “particularly significant to consumers or . . . somehow material to a

likelihood of confusion.” Hamilton Int’l Ltd., 486 F. Supp. 3d at 665. And after

inspecting the watch, as well as viewing photographs of the watch, the District

Court concluded that a consumer would view The Lancaster as an antique pocket

watch modified into a wristwatch rather than an entirely new product. Id. at 664

18 (“[T]he Court finds that the watch obviously presents to a viewer as restored

antique pocket watch movement, face, and hands . . . reincorporated into a new

wristwatch. . . . [T]he hands, face, and movement have a patina, style, and look

that convey that they are restored antiques.”). In light of those findings, which

were supported by the trial evidence and were not clearly erroneous, the District

Court properly analyzed Hamilton’s federal trademark infringement claim under

the framework laid out in Champion.

2. Champion’s Interaction with the Polaroid Factors and the Burden of Proof

Hamilton also takes issue with the sequence in which the District Court

considered Champion and Polaroid. Hamilton argues that the District Court erred

by failing to first determine the likelihood of confusion under the Polaroid factors

before turning to the “full disclosure” analysis under Champion. Hamilton

contends that a defendant bears the burden of showing that Champion’s “full

disclosure” standard is met, and that the weight accorded this burden can only be

determined by first measuring the level of confusion through an analysis of the

Polaroid factors.

We conclude that the District Court did not err in declining to require Vortic

to prove the effectiveness of its disclosures under Champion. Initially, it is worth

19 noting that Vortic did in fact offer proof that its disclosures were effective: Custer

testified that the company has never been contacted by anyone confused as to

Hamilton’s affiliation with Vortic’s watches, and Hamilton offered no evidence to

the contrary that the District Court found reliable. But more importantly, in a

trademark infringement case, the plaintiff bears the burden of proving a likelihood

of consumer confusion in the alleged infringer’s use of the mark. See, e.g., Star

Indus., Inc.,

(“To prevail in a trademark infringement action under

the Lanham Act, a plaintiff must prove, in addition to protectability of the mark,

‘a probability of confusion, not a mere possibility,’ affecting ‘numerous ordinary

prudent purchasers.’” (quoting Gruner + Jahr,

)). The District Court

correctly looked to Champion and at the disclosures made by Vortic in determining

whether Hamilton met that burden.

Hamilton’s reliance on decisions where we placed the burden on a

defendant to prove the effectiveness of proposed disclaimers is misplaced. See

Charles of the Ritz Grp., Ltd. v. Quality King Distribs. Inc.,

(2d Cir. 1987);

Home Box Office, Inc. v. Showtime/The Movie Channel Inc.,

(2d Cir.

1987). Hamilton appears to conflate “full disclosure” under Champion, which is

relevant to an initial finding of likelihood of confusion, with an infringer’s

20 proposed “disclaimers” proffered at the remedy stage of a trademark infringement

action to assist the court in fashioning the appropriate injunctive relief. It is in that

latter situation, after a finding of trademark infringement, that the burden of

showing the sufficiency of a disclaimer shifts to the defendant. See, e.g., Charles of

the Ritz Grp. Ltd.,

; Home Box Office, 832 F.2d at 1315–16. 4 As we

explained in Home Box Office, it was appropriate to place the burden on the

defendant at that point because the defendant had “no right to use the mark unless

and until it [could] demonstrate that . . . its use will no longer constitute an

infringement.”

(emphasis added). In contrast here, however,

there had been no finding that Vortic infringed on Hamilton’s trademark because

of the absence of a showing by Hamilton of consumer confusion.

4 Our decisions following Home Box Office and Charles of the Ritz Group have continued to hold that a defendant must justify the effectiveness of its proposed disclaimers at the remedy stage, after a finding of a substantial likelihood of confusion. See, e.g., Weight Watchers Int’l, Inc. v. Luigino’s, Inc.,

, 143– 44 (2d Cir. 2005) (explaining that where “an infringer attempts to avoid a substantial likelihood of consumer confusion by adding a disclaimer, it must establish the disclaimer’s effectiveness” (citations and footnote omitted)); ProFitness Physical Therapy Ctr. v. Pro-Fit Orthopedic & Sports Physical Therapy P.C.,

, 70–71 (2d Cir. 2002) (remanding for the district court to discern the severity of consumer confusion and require the defendant to “justify the remedy”).

21 Furthermore, our precedents confirm that a court is not required to consider

factors relevant to likelihood of confusion in any set order. A court’s analysis

under Polaroid is a flexible one: “The application of the Polaroid test is not

mechanical, but rather focuses on the ultimate question of whether, looking at the

products in their totality, consumers are likely to be confused.” Kelly-Brown v.

Winfrey,

(2d Cir. 2013) (internal quotation marks and citation

omitted). In the context of trademark infringement cases involving the resale of

refurbished goods, Champion informs that consumer confusion analysis. Both

Polaroid and Champion are thus aimed at discerning whether a consumer would be

misled by the defendant’s use of the plaintiff’s trademark. There is no hard and

fast order in which a court must undertake that analysis.

In sum, the District Court properly placed the burden of proving trademark

infringement on Hamilton, and correctly analyzed the relevant considerations

under Polaroid and Champion.

3. The District Court’s Findings Under Champion and Polaroid

We turn next to Hamilton’s challenges to the District Court’s findings under

Champion and Polaroid. We find no error, clear or otherwise, in either.

22 In conducting its Champion analysis, the District Court identified several

ways that Vortic disclosed that The Lancaster contained refurbished original parts

and was not affiliated with Hamilton. For example, a magazine advertisement

explained that Vortic’s watches are “custom fabricated using railroad era,

American made pocket watch movements to create timeless, one-of-a-kind

wristwatches for individuals with contemporary vision.” App’x at 368, 373; see

Hamilton Int’l Ltd., 486 F. Supp. 3d at 663. Another advertisement explained: “All

of the components (movement, dial, hands) between the two Gorilla Glass crystals

are ~ 100 years old, and started their life in a Railroad-Era pocket watch made by

the Hamilton Watch Company. The watches were made in Lancaster

Pennsylvania in the late 1800’s and early 1900’s.” App’x at 375; see Hamilton Int’l

Ltd., 486 F. Supp. 3d at 663. Vortic’s website further stated that the company “uses

vintage movements whose case has been scrapped for its precious metal value,

and meticulously restores the inner workings in order to build a completely

custom watch around it.” App’x at 375; see Hamilton Int’l Ltd., 486 F. Supp. 3d at

663. 5

Hamilton argues that the advertisements from Vortic’s website were not 5

admitted into evidence at trial and should not have been considered by the District

23 In addition to these promotional materials, the District Court cited the watch

itself in assessing the adequacy of Vortic’s disclosures. Relying on its own

examination of The Lancaster, the District Court explained that the watch—with

its larger size, the 12 o’clock knob position, and the general look of its parts as

restored antiques—“obviously presents to a viewer as restored antique pocket

watch movement, face, and hands that have been reincorporated into a new

wristwatch.” Hamilton Int’l Ltd., 486 F. Supp. 3d at 664. The District Court further

found that The Lancaster “would convey to any ordinary prudent purchaser that

the watch was made by Vortic and that the Hamilton mark is displayed only

because Hamilton created the original movement, face, and hands that have

Court. The record shows that Vortic’s counsel, without objection, expressed his intention to enter pictures of the website as exhibits into the evidence. It appears, however, that these documents were inadvertently left out of the record. By considering these exhibits, the District Court clearly found them to be both admissible and relevant, and Hamilton fails to provide any substantive grounds for why this evidence should have been excluded. In any event, we conclude that any error on this issue was harmless because the District Court could have considered the contents of the advertisements as they were directly quoted in Custer’s sworn affidavit—which was admitted into evidence without objection— and because the District Court found that other advertisements in the record satisfied the full disclosure factor. See Tesser v. Bd. of Sch. Dist.,

, 319 (2d Cir. 2014) (“[A]n evidentiary error in a civil case is harmless unless [the appellant demonstrates that] it is likely that in some material respect the factfinder’s judgment was swayed by the error.” (second alteration in original) (internal quotation marks and citation omitted)).

24 subsequently been restored,” “not[ing] that ‘Vortic,’ ‘Lancaster,’ and the serial

number are all prominently engraved on the case while the Hamilton mark is only

visible inside the glass case, on a movement and face that appear obviously

antique.” Id.

These factual findings, all firmly grounded in the record, fully supported

the District Court’s conclusion that Vortic adequately disclosed the origin of The

Lancaster and its lack of affiliation with Hamilton. And the District Court properly

weighed Vortic’s full disclosure heavily in its consumer confusion analysis. See id.

at 663 (explaining that it would “give strong weight to the ‘full disclosure’ factor”).

Hamilton relies on three cases from other Circuits to argue that no

disclosures could be adequate when watches are “extensively modified.” See Rolex

Watch, U.S.A., Inc. v. Michel Co.,

(9th Cir. 1999); Rolex Watch USA, Inc.

v. Meece,

(5th Cir. 1998); Bulova Watch Co. v. Allerton Co.,

(7th Cir. 1964). To the extent Hamilton claims that these decisions found Champion

inapplicable to modified watches, we disagree. All three cases applied Champion’s

reasoning to find that alterations made to the watches at issue resulted in new

products, and that, under the facts presented, no disclosure could adequately

dispel the likelihood of consumer confusion stemming from the modifications.

25 The courts in Michel Co. and Bulova Watch Co. cited Champion before looking

to the record to decide whether there was adequate disclosure. See Michel Co.,

(explaining that the defendant’s disclosure did not “convey[] basic

changes that have been made to the watch” and that “the face of the watch” at

issue could not “support a more adequate legend”); Bulova Watch Co.,

(noting that “[i]t is obvious that the area of the exposed portion of the dial of

the cased 6 ¾ X 8 ligne movement is such [that] no appropriate and readable

legend could be placed thereon which would satisfy the disclosure requirements

the facts and circumstances here demand”). Likewise, although the court in Meece

did not cite Champion, it echoed Champion’s reasoning when it relied on “case law

interpreting the Lanham Act as prohibiting a party from making changes in

integral parts of a product and then selling the modified product under the

original trademark without full disclosure.” Meece,

(emphasis

added). And, just as in Bulova Watch Co. and Michel Co., the Meece court’s finding

of trademark infringement was tied to the circumstances of that case. See

(basing its decision on “[c]onsider[ation] . . . of [all] the evidence and, especially,

the district court’s findings regarding the likelihood of confusion with respect to

secondary purchasers”).

26 Thus, these decisions have little persuasive weight where, as here, adequate

disclosures could be provided. For these reasons, we find no error in the District

Court’s factual findings or its conclusion that Vortic’s disclosures were adequate

under Champion.

Nor was there any clear error in the District Court’s factual findings as to

the Polaroid factors. In light of its determination that Vortic provided full

disclosure under Champion, the District Court found three Polaroid factors to be

particularly significant in this case: actual confusion, the defendant’s good faith in

adopting the mark, and the product’s customer base. Most of Hamilton’s

arguments on appeal as to these factors amount to disagreement with the District

Court’s credibility determinations. It is axiomatic, of course, that “[c]lear error

review mandates that we defer to the District Court’s factual findings, particularly

those involving credibility determinations.” Phoenix Glob. Ventures, LLC v. Phoenix

Hotel Assocs., Ltd.,

, 76 (2d Cir. 2005). And we do so here.

The District Court first found that Hamilton failed to proffer any proof of

actual confusion after declining to credit Hamilton’s sole evidence on this point:

an email from a prospective customer stating that her friend was “looking for a

vintage Hamilton as per attached.” App’x at 229–31. Hamilton attached to the

27 exhibit pictures of two advertisements for The Lancaster, contending that they

were attached to that email. Yet Hamilton’s authenticating witness was unable to

confirm at trial whether those advertisements were indeed attached to the email

and, after observing this witness testify at trial, the District Court discounted this

evidence. Similarly, the District Court’s finding that Custer and Vortic did not act

in bad faith was supported by Custer’s trial testimony describing his intent in

founding Vortic and manufacturing The Lancaster. Nor do we accept Hamilton’s

unsupported proposition that continued sales of The Lancaster after Vortic’s

receipt of a cease-and-desist letter necessarily demonstrates bad faith. See W.W.W.

Pharm. Co. v. Gillette Co.,

(2d Cir. 1993) (“[A]doption of a

trademark with actual knowledge of another’s prior registration of a very similar

mark may be consistent with good faith.” (quoting Lang v. Ret. Living Publ’g Co.,

(2d Cir. 1991))). Finally, the District Court’s finding as to the

sophistication of the relevant consumer base was grounded in uncontroverted

evidence that the average price of Vortic’s watches ranged from $1,500 to $5,000,

as well as Custer’s testimony describing Vortic’s customers as “college-educated

men . . . with above-average income,” most of whom “own multiple

wristwatches.” App’x at 113, 375; see Star Indus. Inc., 412 F.2d at 390 (explaining

28 that proof of consumer sophistication is not limited to “expert opinions or

surveys,” and “a court is entitled to reach a conclusion about consumer

sophistication based solely on the nature of the product or its price”).

We also find no error in the District Court’s determination that the other

Polaroid factors were less relevant in this case. Cf. Arrow Fastener Co.,

(“[I]t is incumbent upon the district judge to engage in a deliberate review of each

factor, and, if a factor is inapplicable to a case, to explain why.”). 6 But regardless,

the District Court considered each of the five remaining Polaroid factors and

properly weighed them in accordance with the trial evidence.

6 Indeed, the District Court’s decision to place less emphasis on certain Polaroid factors is consistent with Champion. The defendant in Champion used the plaintiff’s exact trademark, and the Supreme Court noted that while “inferiority is expected in most second-hand articles,” it is “immaterial so long as the article is clearly and distinctively sold as repaired or reconditioned rather than as new.” 331 U.S. at 129–30. Accordingly, the Court suggested that as long as there was full disclosure as to the refurbished nature of the item, factors such as the strength of the mark, similarity between marks, and quality of the products would be less relevant. Similarly, while a traditional Polaroid analysis instructs that closer competitive proximity of the products leads to a greater probability of consumer confusion, the analysis in Champion suggests that in the context of second-hand goods, similarity of the products could work to a defendant’s advantage. See id. at 129 (emphasizing as critical to the Court’s holding that “[t]he repair or reconditioning of the plugs d[id] not give them a new design”).

29 While the District Court determined that Hamilton’s mark was “relatively

strong,” it found that the other factors supported entering judgment in favor of

Vortic and Custer on Hamilton’s federal trademark claim. Relying on the

disclosures that it discussed in its Champion analysis, the District Court properly

concluded that the “similarity of the marks” factor did not support a finding of

confusion given the context in which the mark appeared on The Lancaster. See

Hamilton Int’l Ltd., 486 F. Supp. 3d at 666; Star Indus. Corp.,

(holding

that the similarity of products factor is not to be analyzed in isolation, but instead

includes a consideration of “the context in which” the trademark is found (internal

quotation marks and citation omitted)); Estee Lauder Inc.,

(finding

that although the defendant used the plaintiff’s trademark on similar products,

this factor did not weigh toward confusion because “each product [was] labeled

to show which company is its source”).

Nor do we find any error in the District Court’s analysis of the “proximity

of the products” factor. Hamilton argues that it competes in the same marketplace

as Vortic, i.e., the watch market, and the District Court therefore should have

found this factor to militate in favor of a likelihood of confusion. The District Court

found, however, that the relevant market was one for antique or refurbished

30 watches. This finding was supported by Custer’s testimony that Vortic catered to

consumers interested in antiques related to American history, and Hamilton failed

to provide any evidence that it sold similar types of watches or that both

companies sold their products in the same channels of commerce. See Cadbury

Beverages, Inc. v. Cott Corp.,

(2d Cir. 1996) (specifying that courts

must look to the “structure of the relevant market,” which includes an analysis of

“the class of customers to whom the goods are sold, the manner in which the

products are advertised, and the channels through which the goods are sold”

(quoting Vitarroz v. Borden, Inc.,

(2d Cir. 1981))).

With regard to “the likelihood that the prior owner will ‘bridge the gap,’”

Hamilton failed to provide any evidence that it intended to enter Vortic’s market

by manufacturing and distributing restored watches with antique parts. Finally,

the District Court weighed the trial testimony and found that Hamilton failed to

demonstrate that The Lancaster was of a lower quality than Hamilton’s products.

Hamilton relied on a single online post in which Custer suggested that The

Lancaster was not for everyday use because “wearing [the watches] on the wrist

will jar them more than usual.” App’x at 208–11. Custer, however, was

extensively questioned about this post at trial, and testified that it was made

31 during an early phase of The Lancaster’s production and before any watches were

sold to consumers. And Hamilton did not provide any proof as to the durability

of their own products as a comparison. See Hormel Foods Corp. v. Jim Henson Prods.,

Inc.,

(2d Cir. 1996) (explaining that this factor looks to whether the

defendant’s product is inferior or equal in quality to the plaintiff’s product).

As the above discussion demonstrates, a common theme emerged from the

bench trial: Hamilton—which bore the burden of establishing confusion—failed

to come forward with any reliable evidence showing that consumers were likely

to be misled. We find no clear error in the District Court’s factual findings in

connection with its analysis under Champion or in connection with the Polaroid

factors. We further conclude that the District Court correctly applied Champion

and Polaroid to these factual findings to conclude that there was no likelihood of

consumer confusion.

C. Hamilton’s Remaining Claims

As the District Court noted, its analysis of Hamilton’s trademark

infringement claim under the Lanham Act necessarily compelled judgment in

favor of Vortic and Custer on Hamilton’s remaining claims. This is because each

of those claims required some showing of a likelihood of consumer confusion. See

32

(1)(a) (federal counterfeiting claim requiring the plaintiff to show

that the use of the counterfeit mark is “likely to cause confusion, or to cause

mistake, or to deceive”); Starbucks Corp.,

(enumerating the six-factor

test for dilution by blurring under New York law, with the factors resembling the

Polaroid factors and similarly focusing on confusion);

(a) (federal

unfair competition claim presenting same standard as federal trademark claim);

Car-Freshner Corp. v. Am. Covers, LLC,

(2d Cir. 2020) (explaining

that a New York “unfair competition claim turn[s] on a likelihood of consumer

confusion”). Having found no likelihood of consumer confusion, the District

Court properly concluded that Vortic and Custer were entitled to judgment on

these claims as well.

III. CONCLUSION

For the foregoing reasons, the District Court’s judgment is AFFIRMED.

33