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A&H SPORTSWEAR CO. v. VICTORIA'S SECRET STORES

May 24, 1996

A&H SPORTSWEAR CO., INC. and MAINSTREAM SWIMSUITS, INC., Plaintiffs and Counterclaim-Defendants,
v.
VICTORIA'S SECRET STORES, INC. and VICTORIA'S SECRET CATALOGUE, INC., Defendants and Counterclaim-Plaintiffs.



The opinion of the court was delivered by: VAN ANTWERPEN

 Van Antwerpen, J.

 May 24, 1996

 I. INTRODUCTION

 This action arises under the common law, Sections 32 and 43(a) of the Trademark Act of 1946 (the Lanham Act), 15 U.S.C. §§ 1114, 1125(a), and the Pennsylvania Antidilution Law, 54 Pa. C.S.A. § 1124. The parties are diverse in citizenship and the amount in controversy exceeds $ 50,000 exclusive of interests and costs. This court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1332, 1337, 1338 and 1367. Venue in this court is proper under 28 U.S.C. § 1391. Plaintiffs have chosen to bring this action directly in District Court pursuant to 28 U.S.C. § 1338 rather than through the adjudication process of the Patent and Trademark Office. On December 8, 1994, A&H Sportswear filed their complaint alleging trademark infringement of their MIRACLESUIT trademark by Defendants' THE MIRACLE BRA and THE MIRACLE BRA line of products. Pursuant to a telephone conference of June 13, 1995 and an order of June 15, 1995, the parties agreed to consolidate a hearing on a preliminary injunction with a trial on the merits. We deemed letters from counsel a stipulation waiving a jury trial in our order of July 31, 1995. In our order of October 20, 1995, we granted Defendants' motion for separate trials on the issues of liability and damages. A two-week non-jury civil trial to determine issues of liability was conducted from October 25 to November 3, 1995. Due to its commercially sensitive nature, numerous papers were filed under seal and three segments of confidential testimony were received during trial. Pursuant to F.R.Civ.P. 52(a) we make the following findings *fn1" of fact:

 II. FINDINGS OF FACT

 A. PARTIES AND PRODUCTS

 1. Plaintiff A&H Sportswear, Co., Inc. ("A&H") is a corporation organized and existing under the laws of Pennsylvania, having a place of business at Routes 191 and 33, Stockertown, Pennsylvania 18083. Exhibit D-231. A&H manufactures women's swimwear, including the MIRACLESUIT swimsuit in issue in this action. M. Waldman, 10/27/95, p.98:20 to p.105:7, Exhibits P-53, P-54. A&H's trademark registration, registered October 27, 1992, for MIRACLESUIT covers swimwear in International Class 25, which is a registration category for clothing apparel. B. Waldman, 10/25/95, p.175:14 to p.176:14; Exhibit P-1. A&H manufactures four million swimsuits, or approximately ten percent of all swimsuits annually sold in the U.S. B. Waldman, 10/25/95, p.79:17 to p.80:1.

 2. Mainstream Swimsuits, Inc. ("Mainstream"), is a corporation organized and existing under the laws of the state of Pennsylvania. Exhibit D-229. Mainstream is the exclusive distributor of MIRACLESUIT products manufactured by A&H. Mainstream purchases MIRACLESUIT swimsuits from A&H for which A&H then invoices Mainstream. Mainstream sells MIRACLESUIT swimwear nationwide. Mainstream also maintains a corporate showroom in New York City at which MIRACLESUIT swimsuits and other Mainstream lines are shown to trade customers. B. Waldman, 10/23/95, p.141:11 to p.143:19. A&H ships MIRACLESUIT swimsuits directly to Mainstream's customers. B. Waldman, 10/23/95, p.68:1 to p.69:7, p.70:5-17, p.138:25 to p.141:9; Exhibits P-25, P-62A & B. SWIM SHAPER is a division of Mainstream swimsuits which was established to market the MIRACLESUIT line. The MIRACLESUIT sales invoices are captioned "MIRACLESUIT TM by SWIM SHAPER TM ". Retailers and other wholesale purchasers of the MIRACLESUIT make their checks payable to MIRACLESUIT BY SWIM SHAPER or to SWIM SHAPER. A&H and Mainstream (hereinafter referred to collectively as "A&H"), are closely held and owned exclusively by members of the Waldman family. B. Waldman, 10/23/95, p.64:5 to p.67:22; Exhibit P-40.

 3. The total MIRACLESUIT product line consists of one-piece and two-piece swimsuits with push-up bras, constructed/shaping bras, and unconstructed bras as well as leotards and shorts and non-control cover-ups, dresses, jackets and pareos. B. Waldman, 10/23/95, p. 96:3 to p.101:22, p.113:22 to p.115:23; Exhibits P-4, P-6 and P-7. A&H attaches hang-tags bearing the words "MIRACLESUIT TM by SwimShaper" to its swimsuits. B. Waldman, 10/23/95, p.88:23 to p.89:18, Exhibit P-30. MIRACLESUIT currently appears both on A&H's swimsuits' sewn-in labels and on the separate hang tag. Sewn-in labels were first used following this lawsuit's filing. M. Waldman, 10/27/95, p.137:15 to p.138:7; Exhibit P-30B.

 4. A&H now also sells MIRACLESUIT cover-ups and jackets. B. Waldman, 10/23/95, p.115:25 to p.121:14, p.139:7 to p.141:2; Exhibit P-8. During the 1993-94 season, A&H offered two styles of jackets, a pareo, a big shirt and a coverup under the MIRACLESUIT name. B. Waldman, 10/26/95, p.144:18 to p.145:4; Exhibit P-3D. During the 1995 season, A&H began manufacturing bike shorts, short shorts, a leotard and a tank dress under the MIRACLESUIT name. B. Waldman, 10/26/95, p.145:6 to p.147:24; Exhibit P-3C. A&H also now sells MIRACLESUIT dresses for which it has received orders from independent sales representatives, Bloomingdale's, and other stores. Sacco, 10/24/95, p.76:14-17; B. Waldman, 10/27/95, p.6:3 to p.7:20; Exhibit D-259; B. Waldman, 10/26/95, p.191:11 to p.192:1. Mainstream's independent sales representatives represent the MIRACLESUIT line nationally to the trade for Mainstream. B. Waldman, 10/23/95, p.141:14 to p.143:24; Exhibit P-38.

 5. Defendant Victoria's Secret Stores, Inc. ("VS Stores"), sells lingerie and swimwear nationwide in retail stores. VS Stores is incorporated in the State of Delaware and is qualified to do business in all states except Arkansas, Hawaii, Montana and South Dakota. VS Stores owns and operates approximately 650 retail stores located nationwide under the name VICTORIA'S SECRET. Most are located in regional malls. Nichols, 10/31/95, p.117:7-18. VS Stores is headquartered in Columbus, Ohio. The marketing department for VS Stores is located in New York, New York; Nichols, 10/31/95, p.156:20-22. VS Stores is the dominant specialty retailer of ladies' lingerie in the United States. Nichols, 10/31/95, p.118:6-7. VS Stores' sales are derived from intimate apparel (85 percent), hosiery (2 percent) and the balance from fragrances and toiletries. Nichols, 10/31/95, p.118:20-22, 120:16-18; Felder, 11/01/95, p.132:20-23. VS Stores' total revenue is approximately twice that of VS Catalogue. VS Stores' sales from intimate apparel are roughly five times the comparable sales by Victoria's Secret Catalogue. Fedus, 11/01/95, p.161:11-14. VS Stores has therefore assumed a primary role in naming apparel. Fedus, 11/01/95, p.163:24 to 164:2. Bras are VS Stores' number one category of sales. Felder, 11/01/95, p.91:1-2. The vast majority of VS Stores merchandise bears the VICTORIA'S SECRET trademark and trade name. The remaining items are mostly test merchandise. Nichols, 10/31/95, p.124:9-14. VS Stores has tested swimwear three or four times over eight or nine years, selling both branded and unbranded swimwear. Nichols, 10/31/95, p.141:20 to p.142:14; Nichols Depo, exhibit P-205, 09/07/95, p.36:7 to p.37:4. Grace Nichols has been the President of VS Stores since 1991. Nichols, 10/31/95, p.112:10-13.

 6. Victoria's Secret Catalogue ("VS Catalogue"), is a mail order business that -- although smaller in size -- sells a broader range of products than VS Stores, including intimate apparel, sportswear, dresses, accessories, shoes and swimwear. Nichols, 10/31/95, p.120:19-20; Felder, 10/26/95, p.90:5-6. VS Catalogue is a Delaware corporation with headquarters in New York City and its distribution center in Columbus, Ohio. Approximately 30 different issues of the VICTORIA'S SECRET catalogue are mailed on an annual basis. VS Catalogue circulates over 300 million catalogues annually. Berkman, 11/01/95, p.224:21 to p.225:3; Fisher Depo, Exhibit P-202, 08/09/95, p.53:8-17. VS Catalogue derives approximately thirty-five percent (35 percent) of its sales from lingerie and intimate apparel. The balance comes from other apparel including dresses, coats, suits, swimwear and sportswear. Fedus, 11/1/95, 160:22-24, 163:3-4. Cynthia Fedus has been the President and Chief Executive Officer of VS Catalogue since 1988. Fedus, 11/01/95, p.153:9-14.

 7. VS Stores and VS Catalogue are both wholly-owned subsidiaries of Intimate Brands, Inc. The Limited, Inc., which was formerly the parent corporation of VS Stores and VS Catalogue, now owns 85 percent of Intimate Brands, Inc. Nichols, 10/31/95, p.115:19-21, p.116:5-10; Fedus, 11/01/95, p.156:24-25. The Limited maintains offices in London, Paris and Milan as well as Hong Kong, Taiwan and Korea. Nichols, 10/31/95, p.123:2-3; Fedus, 11/01/95, p.157:6-11. These offices arrange for transportation when executives and employees of its subsidiary companies travel. They also give their impressions of developing fashion trends to those same companies. Fedus, 11/01/95, p.157:11 to p.158:2. The London office frequently guides Victoria's Secret's executives on shopping trips there. Felder, 10/26/95, p.36:10-12.

 9. VS Stores and VS Catalogue have separate officers, financial and distribution departments, different operating budgets and separate buying, marketing, and sales organizations; they nonetheless do actively cultivate a common image and share the Victoria's Secret brand. Nichols, 10/31/95, p.119:14-120:2. Fedus, 11/01/95, p.156:22 to p.157:5; Felder, 10/26/95, p.93:13 to p.95:1; Exhibit P-146. There is no set official method for communicating between VS Stores and VS Catalogue, or between the two companies' CEO's. Felder, 10/26/95, p.30:16-17. VS Stores may act with regard to a product without VS Catalogue's knowledge or vice versa. Felder, 10/26/95, p.27:6-13. Both organizations tend to operate quickly and informally. Formal agenda and memoranda of meetings have generally not been created at VS Stores. Nichols, 10/31/95, p.123:14-20; Felder, 10/26/95, p.30:20-24; Exhibit P-201, p.33:16 to p.34:17.

 10. Although they are separate, VS Catalogue and VS Stores engage in joint purchasing and joint marketing in some key product programs. These efforts tend to reinforce one another. Fedus depo, Exhibit P-201, 08/09/95, p.16:20-25, p.29:25 to p.30:7. Fedus, 11/01/95, p.161:17-21, p.162:15-25, p.164:5-21; Exhibit P-146, p.39. VS Stores and VS Catalogue frequently purchase items from the same supplier. Fedus, 11/01/95, p.161:15-21. VS Stores influences the marketing, names and positioning of VS Catalogue's intimate apparel products. VS Stores and VS Catalogue informally share information on successful and unsuccessful products. Fedus Depo, Exhibit P-201, 08/09/95, p.133:2 to p.134:6; Deckop, 10/31/95, p.216:18-22. The two companies cooperate in regular meetings which occur approximately every three months, informally on the telephone and in casual meetings in New York. Nichols, 10/31/95, p.149:1-19. Similar discussions concerning VS Stores' and VS Catalogue's successful and unsuccessful items, including THE MIRACLE BRA swimwear, frequently occur at the buyers' level. Felder, 10/26/95, p.27:24 to p.30:6; 11/01/95, p.75:15 to p.77:4; Fedus Depo, Exhibit P-201, 08/09/95, p.32:11-17. VS Stores and VS Catalogue frequently include in their own product line items that have sold well in the other. VS Catalogue began selling THE MIRACLE BRA based on VS Stores' success with the item. Fedus, 11/01/95, p.161:23-25.

 11. Upon request, VS Catalogue occasionally suggests models to Stores which also infrequently borrows photographs taken by VS Catalogue. Felder, 11/01/95, p.75:15 to p.77:4. Ms. Nichols and Ms. Fedus share information concerning each companies' top-selling items. As a result, it is common for VS Stores and VS Catalogue to test each other's top items to decide whether to coordinate "merchandise selection." Nichols Depo, Exhibit P-205, 09/07/95, p.117:4-22. As part of a joint marketing effort, VS Stores sells the catalogue put out by VS Catalogue at all VS Stores for $ 3, and gives it away for free to those customers who sign a guest book. Deckop, 10/31/95, p.216:3-17; Felder, 10/26/95, p.33:11 to p.34:9; Nichols, 10/31/95, p.143:24 to p.144:11.

 12. VS Stores and VS Catalogue have also jointly mailed postcards advertising THE MIRACLE BRA products. These were mailed to customers culled jointly from VS Catalogue's and VS Stores' customer mailing lists. Felder, 11/01/95, p.18:23 to p.19:12; Exhibit D-19. Customers of VS Stores occasionally inquire about a product they have seen in the catalogue published by VS Catalogue. Felder, 11/01/95, p.77:18 to p.78:11. THE MIRACLE BRA (bra) was first offered by VS Catalogue in February, 1994. Fedus, 11/01/95, p.163:8-11; Fisher, 11/02/95, p.32:5-7. It has been featured in nearly every subsequent catalogue published by VS Catalogue. Fedus, 11/01/95, p.163:12-15. VS Catalogue considers it a very successful item. Fedus, 11/01/95, p.163:15-16.

 13. The largest bra manufacturers in the United States include Playtex, Bali, Warner's, Vanity Fair and VS Stores. Nichols, 10/31/95, p.139:4-6. From the late 1970's to early 1980's, A&H manufactured a running bra under the name RUNDERWEAR. Since 1992, A&H has been developing a removable swimwear bra called TOP FIT. 10/27/95, p.98:20 to p.105:7; Exhibits P-53, P-54. Plaintiffs have not had a significant market share of the women's lingerie industry nor do they have imminent plans to market lingerie or intimate apparel. B. Waldman, 10/25/95, p.139-40, p.151-52.

 14. As manufactured and marketed to date, Plaintiffs' MIRACLESUIT belongs to a category of women's swimsuits which offers body control and which claims to make the wearer look slimmer. B. Waldman, 10/26/95, p.153:21 to p.156:7, 159:12-25. MIRACLESUIT claims to control the body by taking inches off the stomach and hips. Nichols, 10/31/95, p.139:18-22; Felder, 11/01/95, p.62:22-24. A majority of MIRACLESUITs contain bras with underwires; some also have padded bras. B. Waldman, 10/23/95, p.105:15 to p.107:14; Exhibits P-5 to P-8. Plaintiffs' MIRACLESUIT normally retails in the range of $ 54.00 to more than $ 100.00. Exhibit D-212, No. 19. MIRACLESUIT is occasionally also available at discount stores for as little as $ 29.99. Exhibit D-283, No. 5. This is an end-of-the-season practice to clear inventory. Neither VS Stores nor VS Catalogue sells its products to outside discounters although items are discounted within both companies. The majority of total MIRACLESUIT unit sales are one-piece suits; a minority are two-piece suits or bikinis. Non-swimsuit items represent less than 5 percent of MIRACLESUIT products. B. Waldman, 10/26/95, p.151:25 to p.153:18; Exhibits P-3G, P-201, p.17:22-24, p.20:22 to p.21:4, D-15 to D-16, D-104, D-272.

 15. THE MIRACLE BRA is a "cleavage-enhancing product," designed to accentuate a woman's bust. The essential features of THE MIRACLE BRA are removable pads, lace, straps, padding, and underwire. Felder, 11/01/95, p.57:7-23. THE MIRACLE BRA frequently retails for under $ 20. Exhibit D-2, D-3, D-5. THE MIRACLE BRA bikini is offered with the top and bottom sold separately for fitting purposes. It has the same features as THE MIRACLE BRA (bra), namely, angled underwires, push-up pads and adjustable pads. Exhibit P-200, p.53:17-23. Both VS Stores and VS Catalogue retail THE MIRACLE BRA Bikini at a cost of $ 39.00 for the top and $ 29.00 for the bottom; THE MIRACLE BRA Maillot (one-piece) retails for $ 69.00. Exhibit P-200, p.73:8 to p.74:11; Exhibit D-283H.

 B. PRODUCT DEVELOPMENT

 16. A&H procured its first patent in its MIRACLESUIT swimsuit. B. Waldman, 10/23/95, p.71:5-14, p.79:8-10, p.82:2-22; Exhibit P-2. Because the suit's fabric, MIRATEX, has higher Lycra content than other control fabrics, it is costlier than the average swimsuit material. B. Waldman, 10/23/95, p.75:2-15, p.82:2-22. When it was introduced, the MIRACLESUIT swimsuit's construction (emphasizing horizontal control and vertical stretch) were somewhat unique to the swimwear industry. Sacco, 10/24/95, p.62:13 to p.62:25. There is no singly generally accepted method of body control; it can include products made with lycra, spandex, elastic, lastex and other fabrics that "hold in" some portion of the wearer. B. Waldman, 10/26/95, p.156:11 to p.162:12.

 17. New product ideas and concepts are developed and influenced in various ways at VS Stores, including shopping trips in Europe, meetings with designers and vendors, as well as in-house design. Nichols, 10/31/95, p.122:9-17. Following the introduction of a particular product or style, VS Stores' marketing department develops plans to optimize sales. Nichols, 10/31/95, p.122:20-25. VS Stores began the development of a cleavage-enhancing bra in the Summer of 1992, after personnel traveling in Europe spotted an emerging trend in fashion toward cleavage and form-fitting garments. VS Stores believed the trend would reach the United States. Felder, 11/01/95, p.12:5-7 and 15-23; Nichols, 10/31/95, p.126:7-20. At the time, designers were also frequently showing lingerie-influenced garments in their lines. VS Stores sought to market a cleavage-enhancing product of their own quickly. (10/31/95, p.126:24-127:1; Nichols) Prior to THE MIRACLE BRA, VS Stores did not have such a product in its assortment. Nichols, 10/31/95, p.126:9-12.

 18. Defendants testified that there are no memoranda, other internal communications and correspondence concerning the creation and development of THE MIRACLE BRA trademark and product lines because virtually all relevant decisions were oral. Exhibit P-129, 09/08/95, Nos. 2, 3. In response to A&H's document requests, Defendants have produced only a few documents relating to the creation and product development of THE MIRACLE BRA lingerie and swimsuits. B. Waldman, 10/25/95, p.130:3 to p.131:2. A discussion between the two Defendant companies' presidents about pricing THE MIRACLE BRA was put into a memorandum, but never produced. Fedus Depo, Exhibit P-201, 08/09/95, p.33:16 to p.34:14. Additionally, numerous possible trademarks in contention at the time that THE MIRACLE BRA was chosen constituted an agenda item for a VS Stores merchandising meeting. Executives of VS Stores testified that documents containing this agenda item were committed to writing and could be made available. Nichols Depo, Exhibit P-205, 09/07/95, p.25:9-12; Felder, 11/01/95, p.111:2-17. The Vice President for Marketing at VS Catalogue stated that she has written no memoranda regarding THE MIRACLE BRA, nor is she aware of anyone else in VS Catalogue having written such memoranda. Weiss Depo, Exhibit P-200, 08/07/95, p.11:18 to p.12:5. The Executive Vice President of Marketing at VS Catalogue was also unaware of any VS Catalogue memos regarding either THE MIRACLE BRA, MIRACLESUIT or the present lawsuit. Berkman Depo, Exhibit P-203, 09/13/95, p.66:12-21.

 19. VS Stores conducted no market testing or research prior to the development or introduction of THE MIRACLE BRA. Felder, 11/01/95, p.12:24 to p.13:2. As yet unnamed, THE MIRACLE BRA first went into every VICTORIA'S SECRET store in August, 1993. Felder, 10/26/95, p.22:16-20; 11/01/95, p.14:1-2. At first, there was no promotion when the bra went into the stores. Felder, 10/26/95, p.22:23-25; 11/01/95, p.14:3-8; Deckop, 10/31/95, p.205:9-12. Nevertheless, the bras started selling immediately upon introduction. Felder, 11/01/95, p.14:14-17, p.103:14-20. VS Stores first identified the bra as THE MIRACLE BRA for the Christmas, 1993 campaign, which began in VS Stores during November, 1993. Felder, 11/01/95, p.15:1-3. In-store signs for THE MIRACLE BRA were first produced in November, 1993. Felder, 10/26/95, p.22:23-25; Deckop, 10/31/95, p.205:4-9. VS Stores devoted store windows to the promotion of THE MIRACLE BRA in March, 1994. Felder, 11/01/95, p.15:12-18. THE MIRACLE BRA is identified with a hangtag bearing the names THE MIRACLE BRA and VICTORIA'S SECRET and showing the garment's size. Felder, 11/01/95, p.19:17-21. The VICTORIA'S SECRET name is sewn on a label inside THE MIRACLE BRA bikini and bra. Exhibits D-39, D-285, P-107.

 20. VS Catalogue followed VS Stores' lead with THE MIRACLE BRA (bra) and benefitted from VS Stores' testing of the product. As discussed below (Finding of Fact 34), VS Stores in turn later followed VS Catalogue's lead with THE MIRACLE BRA bikini. Weiss Depo, Exhibit P-200, 08/07/95, p.181:11-21. As a result of the success of THE MIRACLE BRA products, VS Stores and VS Catalogue shared stock back and forth to maximize the inventory and to meet demand. Fedus, 11/01/95, p.166:5-11.

 C. TRADEMARK DEVELOPMENT

 22. A&H chose the MIRACLESUIT name for its body control swimsuit based on their belief that the name was "unique, dynamic, exciting and memorable." B. Waldman, 10/23/95, p.71:15-25; Exhibit P-1. At the time A&H adopted MIRACLESUIT, it was unaware of any use by anyone of MIRACLE or MIRACLESUIT in connection with either swimsuits or lingerie. B. Waldman, 10/23/95, p.72:4-10; p.83:10-21; 10/26/95, p.213:2 to p.214:10. Prior to adopting MIRACLESUIT, A&H conducted a trademark search of MIRACLE for both swimsuits and for lingerie. B. Waldman, 10/23/95, p.72:4-10, p.83:7-18; 10/26/95, p.210:25 to p.211:18; 10/27/95, p.33:4-20. Although the results of the trademark search conducted by A&H disclosed a "Miracle" trademark registered in 1918 for corsets, brassieres and ladies' underwaists, A&H's was not able to locate any current use of the mark. B. Waldman, 10/26/95, p.214:17 to p.216:10, Exhibit D-253. This 1918 registration was revealed in the 1991 trademark search but did not show up in a subsequent search of MIRACLE for swimsuits and related products in 1995. B. Waldman, 10/27/95, p.67:25 to p.69:14, p.71:2-6; Exhibit D-253.

 23. The responsibility for developing new Victoria's Secret product names lies with the marketing department at VS Stores. VS Stores' merchandising group typically presents a product idea to its marketing department which then develops a list of names for review. Nichols, 10/31/95, p.127:14-18. VS Stores is generally responsible for those trademarks shared with VS Catalogue. Fedus, 11/01/95, p.163:21 to p.164:2. Ms. Joanna Felder in the Marketing Department at VS Stores generated potential names for what ultimately became THE MIRACLE BRA. Felder, 10/26/95, p.66:21-23. She testified that in considering names, they wanted a "fresh, flirtatious, fun attitude" for their push-up bra. Felder, 10/26/95, p.81:21-23. During a merchandise meeting in October, 1992, one of VS Stores' fit models exclaimed, "Wow, this is a miracle!" after trying on the new cleavage-enhancing bra. Felder, 10/26/95, p.44:10-21; 11/01/95, p.13:16-24. VS Stores thereafter started actively considering the name THE MIRACLE BRA. Felder, 11/01/95, p.13:7-9; Nichols, 10/31/95, p.126:18. In early December, 1992, VS Stores decided to apply for trademark registration of THE MIRACLE BRA for bras. Felder, 11/01/95, p.58:11-16. The ultimate authority for approving VS Store's product names resides in Grace Nichols, its President. Exhibit P-129, Int. No. 3(d). No one from VS Catalogue was involved in the selection of THE MIRACLE BRA name. Nichols, 10/31/95, p.136:2-4; Fedus, 11/01/95, p.163:17-19; Felder, 11/01/95, p.59:23-60:1. There are no people from VS Catalogue's marketing department in the marketing department of VS Stores. Nichols, 10/31/95, p.156:10-20. No one at VS Catalogue was involved in decisions regarding in-store signs of THE MIRACLE BRA for VS Stores. Felder, 11/01/95, p.60:2-5.

 24. When VS Stores decided to use THE MIRACLE BRA mark, its Director of Brand Imaging, Ms. Felder, contacted Defendants' trademark counsel. Felder, 10/26/95, p.42:15-20; 11/01/95, p.57:24 to p.58:6. On November 19, 1992, counsel performed a trademark search in International Classes 25 (clothing) and 24 (textiles) prior to filing its application for THE MIRACLE BRA (bra). The search revealed numerous MIRACLE trademarks, including A&H's MIRACLESUIT trademark registration. Exhibit P-137, 09/08/95, No. 2; Felder, 10/26/95, p.45:10 to p.47:21; 11/01/95, p.69:12 to p.70:5; Exhibits P-114A, P-125. Mr. Deckop, Stores' Chief Financial Officer, signed VS Stores's application for registration of THE MIRACLE BRA (bra), but did not know about the November 19, 1992 search report which resulted from Ms. Felder's request to Defendants' counsel. Ms. Felder's name appears on the search results. Felder, 11/01/95, p.58:7-19, p.65:19 to p.66:20; Deckop Depo, Exhibit P-204, 08/10/95, p.26:16 to p.27:22, p.32:16-20; Exhibit 114A.

 25. With regard to executing VS Stores' application for registration for THE MIRACLE BRA for swimsuits and another one for perfumes, Mr. Deckop stated that he would sign whatever the company attorneys gave him. Deckop, 10/31/95, p.195:24 to p.196:22, p.217:21 to p.218:10. Mr. Deckop had the ultimate authority to authorize trademark searches and had executed all VS Stores' trademark applications for the prior ten years. Deckop, 10/31/95, p.163:9-24, p.166:22-25, p.179:2-14; Exhibit D-81B. When VS Stores filed its application for THE MIRACLE BRA (bra) on December 9, 1992 (which registered on August 9, 1994), Mr. Deckop was clearly aware that that registration covered only bras, and not swimwear. Deckop Depo, 08/10/95, p.38:10-23; Exhibits P-100A, P-204. Mr. Deckop however was not responsible for the later decision to withdraw applications to register various MIRACLE trademarks filed by VS Stores. That decision was made by either Ms. Felder or Ms. Carol Mabe. Deckop, 10/31/95, p.201:6 to p.202:2, p.203:3 to p.204:2; Exhibit P-100C to P-100L. Neither was VS Catalogue's CEO involved in requesting trademark searches, for either THE MIRACLE BRA for bras or swimwear; she nonetheless assumed that one had been done. Fedus Depo, Exhibit P-201, 08/09/95, p.73:7-17; 10/30/95, p.130:13-16.

 26. No one at VS Stores who played a role in selecting or approving THE MIRACLE BRA name had heard of MIRACLESUIT or A&H before the commencement of this action. Felder, 10/26/95, p.48:15-17, p.49:2-5; 11/01/95, p.61:6-23, p.62:5-7; Deckop, 10/31/95, p.173:21-24, p.180:12-16; Fedus, 11/01/95, p.185:5-18. Ms. Felder, who initially chose the name THE MIRACLE BRA for VS Stores, was not aware that VS Catalogue sold the MIRACLESUIT prior to the lawsuit (Finding of Fact 28). Felder, 10/26/95, p.52:4-6. Ms. Felder was also not aware that MIRACLESUIT appeared in fashion page articles, on the back page of the swimwear supplement to Women's Wear Daily, or as an advertisement in Glamour magazine. Felder, 10/26/95, p.53:17-22, p.54:15-19.

 27. VS Catalogue and VS Stores both participate in the London office of The Limited Inc., which monitors the fashion scene in London and elsewhere to learn of fashion trends and styles for possible addition to their product lines. Nichols Depo, Exhibit P-205, 09/07/95, p.17:12-21, p.20:2-10, p.119:22 to p.120:11; Nichols, 10/31/95, p.123:1-13, p.143:6-23, p.144:12-24; Weiss Depo, Exhibit P-200, 08/07/95, p.105:5-10, p.156:17 to p.157:9; Felder, 10/26/95, p.92:25 to p.93:4; 11/01/95, p.12:13-23; Fedus, 11/01/95, p.157:6 to p.158:2; Exhibit P-146. Two representatives from The Limited attended the Sun and Swimwear trade show in July 1992 in London. Felder, 10/26/95, p.79:1 to p.81:3; 11/01/95, p.92:18 to p.93:8, p.95:8-20; Exhibits P-16, P-33D, P-42. During that show, A&H's MIRACLESUIT swimsuits were featured on the front cover of Contours magazine, a U.K. swimwear trade publication. The magazine was distributed to all attendees. B. Waldman, 10/24/95, p.138:12 to 139:24, p.120:8-23; Felder, 11/1/95, p.93:10 to p.95:6; Exhibit P-33D.

 28. Prior to Defendants' adoption and use of THE MIRACLE BRA mark for either bras or swimsuits, VS Catalogue had purchased A&H's swimsuits for sale in the Catalogue. VS Catalogue's Director of Merchandising for Swimwear was first shown MIRACLESUIT control swimsuits in July, 1992, by Mr. Mark Waldman at a Miami swimwear show. Mr. Mark Waldman thereafter sent her samples of MIRACLESUIT swimsuits in New York City. Weiss Depo, Exhibit P-200, 08/07/95, p.109:16 to p.111:12; Weiss, 11/02/95, p.7:7-23, p.8:1-23; M. Waldman, 10/27/95, p.106:6 to p.108:12; Exhibit P-116. Ms. Weiss was given complete advertising information regarding MIRACLESUIT swimsuits and she knew that Mainstream and A&H referred to them as MIRACLESUIT. M. Waldman, 10/27/95, p.110:12-16, p.166:6-17. Around July, 1992, in a meeting attended by Ms. Fedus, VS Catalogue committed to running A&H's MIRACLESUIT swimsuit. On September 1, 1992, VS Catalogue placed its first order. Weiss Depo, Exhibit P-200, 08/07/95, p.48:18 to p.49:9, p.50:4-6.

 29. Ms. Weiss requested that VS Catalogue's copyrighting staff use the MIRACLESUIT trademark in the VS Catalogue. However, when the MIRACLESUIT swimsuit subsequently appeared in VS Catalogue's catalogue in February, 1993, the trademark MIRACLESUIT was not included. M. Waldman, 10/27/95, p.114:1-14; B. Waldman, 10/24/95, p.41:18 to p.42:12; Exhibit P-117A to P-117C. Mr. Mark Waldman called Ms. Weiss and informed her of the omission and requested that the mark be included in the next catalogue. Ms. Weiss apologized, attributing the decision to omit the mark to the VS Catalogue creative team. She stated she would get the MIRACLESUIT mark included in the next issue of the catalogue for an additional 2 percent (over the standard 4 percent) advertising fee. M. Waldman, 10/27/95, p.114:17 to p.116:23; Weiss, 11/02/95, p.10:24 to p.11:21; Weiss Depo, Exhibit P-200, p.123:25 to p.124:18, p.125:25 to p.126:12; 10/27/95, p.184:24 to p.186:5. Mr. Mark Waldman had believed that the four percent discount Defendants received was in consideration for the appearance of the MIRACLESUIT trademark in VS Catalogue's catalogue. M. Waldman, 10/27/95, p.108:16 to p.110:5, p.111:3-16; Exhibit P-116. VS Catalogue's Spring Preview '93 catalogue again omitted the MIRACLESUIT trademark. The head of that catalogue's creative team was unable to explain the reason for this omission. Berkman, 11/01/95, p.238:19 to p.239:6; Weiss Depo, Exhibit P-200, 08/07/95, p.48:18 to p.50:6, p.116:17 to p.117:8, p.118:23 to p.119:24, p.120:2 to p.121:18, p.122:11 to p.123:25, p.125:25 and p.126:12 and 22; 10/27/95, p.181:18 to p.186:19; Fedus, 11/01/95, p.197:10 to p.199:16.

 30. When the February, 1993, issue of the catalogue offering the MIRACLESUIT swimsuit appeared, the MIRACLESUIT mark was again omitted. The swimsuit was instead identified by the name SWIM SHAPER. Another version of this same catalogue, with the same omission, was distributed under a different cover. This catalogue also omitted the MIRACLESUIT trademark and substituted the description "Body Slimmer." Exhibits P-117B, P-117C. Mark Waldman again spoke with Ms. Weiss, who stated she could not offer a reason for the name change. M. Waldman, 10/27/95, p.116:4 to p.119:19. Mr. Mark Waldman had not requested Ms. Weiss to use the SWIM SHAPER name in the catalogue in connection with the MIRACLESUIT swimsuit; he told Ms. Weiss that MIRACLESUIT should have been used instead. M. Waldman, 10/27/95, p.116:20 to p.119:17; Exhibit P-117C. VS Catalogue was billed by Mainstream on numerous invoices which bore the heading MIRACLESUIT by SWIMSHAPER. Payments by VS Catalogue were made to "Swimshaper." M. Waldman, 10/27/95, p.112:4 to p.113:1; Exhibit P-116. In all, A&H sold a total of 1,700 swimsuits to VS Catalogue. Because it had not printed the name MIRACLESUIT as promised, VS Catalogue returned to A&H two of the six percent promotional discount which A&H had given VS Catalogue. M. Waldman, 10/27/95, p.118:12 to p.119:19, p.156:7-19; Weiss Depo, Exhibit P-200, p.125:25 to p.126:11; 10/27/95, p.185:19 to p.186:19; Weiss, 11/02/95, p.11:22 to p.12:7; Exhibit P-116. VS Catalogue has made no further purchases of A&H swimsuits since the MIRACLESUIT swimsuits were purchased in 1992. Weiss, 11/2/95, p.12:15-17.

 31. On December 9, 1992, VS Stores filed an application based on "intent-to-use" for the trademark THE MIRACLE BRA with the United States Patent and Trademark Office ("PTO"). Exhibit D-81B. The application was registered on August 9, 1994, as THE MIRACLE BRA for bras in Class 25, based on a first-use date of January, 1994. Exhibits P-100A, D-81A. Prior to this lawsuit, Plaintiffs did not oppose VS Stores' application to register THE MIRACLE BRA trademark for bras. Neither did Plaintiffs send either VS Stores or VS Catalogue a cease and desist letter, or otherwise register their objection to VS Stores' or VS Catalogue's use of THE MIRACLE BRA trademark. B. Waldman, 10/25/95, p.127-29; 10/27/95, p.14-16; M. Waldman, 10/27/95, p.159-161; Felder, 11/01/95, p.15:1-3; Exhibit P-81. Neither VS Stores nor VS Catalogue therefore was aware of any objection by Plaintiffs, until A&H commenced this civil action in December, 1994 after THE MIRACLE BRA had been extensively advertised and sold for approximately one year. Nichols, 10/31/95, p.157:3-5, 14-25; Fedus, 11/01/95, p.183:4-9.

 D. MIRACLE BRA SWIMWEAR DEVELOPMENT

 32. Swimwear has been offered for sale by VS Stores on a limited test basis three or four times over the previous eight or nine years. Deckop, 10/31/95, p.219:10-21; Nichols, 10/31/95, p.141:23-24. Prior to THE MIRACLE BRA bikini, VS Catalogue had begun to build its swimwear business. Berkman, 11/01/95, p.231:6-11; Weiss, 11/02/95, p.7:3-6. In March, 1994, VS Catalogue launched a specialty catalogue that primarily featured swimwear. The catalogue was considered very successful by VS Catalogue. Fedus, 11/01/95, p.171:21 to p.172:3. Berkman, 11/01/95, p.231:15-16. VS Catalogue mailed two editions of the swimwear issue in 1994, and two more in 1995. Fedus, 11/01/95, p.172:7-8.

 33. Swimwear is a much larger proportion of VS Catalogue's business than it is for VS Stores. Fedus, 11/01/95, p.175:17-23. The idea to put THE MIRACLE BRA tradename and feature (enhanced cleavage) into a bikini came from VS Catalogue as a direct result of THE MIRACLE BRA's success. Fedus, 11/01/95, p.163:8-9, p.175:5-7. THE MIRACLE BRA Bikini first entered VS Catalogue's assortment in the Resort '95 Catalogue edition which mailed in November, 1994. Fedus, 11/01/95, p.174:9-11; Weiss, 11/02/95, p.14:6-9; Exhibit D-100. VS Catalogue has offered THE MIRACLE BRA swimwear with different shape bikini bottoms, different print patterns, and a one-piece construction. Fedus, 11/01/95, p.179:19-21. Each has the padded, push-up feature of THE MIRACLE BRA. VS Catalogue currently has no plans to discontinue the swimwear business or the use of THE MIRACLE BRA on swimwear, including THE MIRACLE BRA Bikini. Fedus, 11/01/95, p.170:8-14, p.172:17-22, p.175:25 to p.176:1.

 34. With the exception of the availability of the VS Catalogue for purchase in Stores, VS Stores did not actively market swimwear. Mabe, 10/31/95, p.247:20-23. On August 30, 1994, VS Stores applied for a trademark registration for THE MIRACLE BRA for "swimsuits, bathing suits and bikinis," application Serial No. 74/567,540. Exhibit P-137, 09/08/95, No. 14; Exhibit P-100B. VS Catalogue's and VS Stores' first use of THE MIRACLE BRA with regard to swimwear occurred without marketing as a test in ten stores in November, 1994. Exhibit P-127, 07/14/95, No. 9; Nichols, 10/31/95, p.137:9-16; Fedus, 11/1/95, p.175:4-14. Felder, 11/01/95, p.28:8-11; The decision to expand the test was made sometime in or just before January, 1995. Nichols, 10/31/95, p.138:4-7; Felder, 11/01/95, p.96:25 to p.97:19. The test was later extended to 160 stores during the Spring of 1995. Felder, 11/01/95, p.28:15-16; Nichols, 10/31/95, p.137:17-25; Deckop, 10/31/95, p.220:4-8. Last year, VS Stores printed a hang tag and one small sign for an in-store test of THE MIRACLE BRA Bikini. Mabe, 10/31/95, p.247:19-22, p.248:10-12; Felder, 11/01/95, p.28:17 to p.29:9; Exhibits D-15 to D-18.

 35. Neither VS Stores' nor VS Catalogue's Presidents knew if the other had performed an availability search of THE MIRACLE BRA with regard to swimwear. Felder, 10/26/95, p.85:4 to p.86:18; Nichols Depo, Exhibit P-205, p.42:3-10; 10/30/95, p.131:21-23; Fedus, 11/01/95, p.188:24 to p.189:4; Weiss, 11/02/95, p.24:17-21. Defendants apparently performed a search of MIRACLE with regard to perfumes and related goods on February 3, 1995, but not for swimwear. B. Waldman, 10/25/95, p.130:3 to p.131:10, Exhibit P-114C. In executing VS Stores' application for registration of THE MIRACLE BRA for swimsuits, Mr. Deckop had assumed VS Stores' had performed a trademark search. He testified that he relied on counsel to present papers that merely required his review and signature. Deckop Depo, Exhibit P-204, 08/10/95, p.77:18-22; Deckop, 10/31/95, p.179:15-19.

 37. On March 22, 1995, Joanna Felder received a letter from Victoria's Secret's trademark counsel advising her of the Patent and Trademark Office's refusal in light of A&H's registered MIRACLESUIT trademark. Felder, 10/26/95, p.55:2 to p.56:3; P-142. Despite the refusal, VS Stores' President stated that that action has had no effect on her decisions concerning the marketing or sale of any of THE MIRACLE BRA products. Nichols, 10/31/95, p.153:25 to p.154:8. The Refusal by the Patent and Trademark Office of THE MIRACLE BRA application for registration for swimsuits did not state that the registration had been suspended. Deckop, 10/31/95, p.198:13 to p.199:17. Defendants have asserted that VS Stores' THE MIRACLE BRA trademark application for swimwear nevertheless was suspended as of the refusal. The first notice of any Patent and Trademark Office suspension with respect to that application was August 31, 1995. Exhibits P-127, 07/14/95, Nos. 5, 51; P-137, 09/08/95, Nos. 36, 37; D-81; Deckop, 10/31/95, p.196:24 to p.198:11. This is due to Defendants' response to the office action, sent to the PTO on March 10, 1995, which requests suspension of the application in view of the pending litigation. Exhibit P-100B.

 E. LINGERIE AND SWIMWEAR MARKETS

 38. Mainstream typically sells its MIRACLESUIT to trade buyers for department stores, specialty stores and catalogue houses. Oginz, 10/26/95, p.113:15-22; Exhibit p-62A. Nordstrom's department store is a major MIRACLESUIT swimsuit customer. Sacco, 10/24/95, p.50:23 to p.51:9; Exhibit P-9B(2). Plaintiffs also compete against branded catalogues. B. Waldman, 10/24/95, p.34:12. National-distribution catalogues represent 25 percent of MIRACLESUIT's customer base. B. Waldman, 10/24/95, p.30:15-17. MIRACLESUIT is purportedly targeted to women ages "19 to infinity" who can afford to buy a "premium product" that is "pretty" and "shapes and contours the figure comfortably." B. Waldman, 10/24/95, p.38:24-p.39:5.

 39. The Victoria's Secret companies target women aged 18 to 50; VS Stores in particular targets women aged 18 to 34. Felder, 11/01/95, p.8:14-16. The specific company image aspired to by VS Stores is of a sensuous, glamorous, luxurious, feminine boudoir with lingerie and intimate apparel. Felder, 11/01/95, p.8:3-10; Nichols, 10/31/95, p.116:13-14; Berkman, 11/01/95, p.221:4-8, p.223:21-23; Mabe, 10/31/95, p.230:16-18. Additionally, both VS Stores and VS Catalogue seek to convey an English origin. Felder, 10/26/95, p.37:2-4.

 40. VS Stores and VS Catalogue compete with department stores, mass merchandisers, specialty retailers, boutiques and catalogue operations. VS Stores' primary competitors are department stores. To a very limited extent, the two VS companies even regard each other as competitors. Felder, 10/26/95, p.78:1 to p.78:4, p.89:8 to p.90:3; Nichols, 10/31/95, p.118:12-15, p.150:13-17; Nichols Depo, Exhibit 205, p.121:25 to p.122:4; Exhibit P-146. VS Catalogue obtains approximately 20 percent of its mailing list from the mailing lists of its competitors including Spiegel, Lew Magram, Domestications, Chadwick's, A.B. Lambdin, Clifford & Wills, J. Crew, Saks Folio, Bloomingdale's by Mail, Popular Club and Talbot's. Weiss Depo, Exhibit P-200, 08/07/95, p.203:17 to p.204:11; Berkman Depo, Exhibit P-203, 09/13/95, p.74:7 to p.75:23; B. Waldman, 10/24/95, p.32:24 to p.33:20; p.36:25 to p.38:14; Fedus, 11/01/95, p.185:19 to p.186:20; Fedus Depo, Exhibit P-201, 08/09/95, p.11:2-11; Felder, 11/01/95, p.132:5-7; Berkman, 11/01/95, p.238:15-18; Weiss, 11/02/95, p.23:23 to p.24:16; Exhibits P-61A, P-146. VS Catalogue also acts as an advertising vehicle for the stores. Fedus, 11/01/95, p.164:10-18. The Catalogue is available from VS Stores and stimulates sales of some items that are also sold by VS Catalogue. Items manufactured and labeled under the VICTORIA'S SECRET tradename, including THE MIRACLE BRA, are only available at VS Stores and VS Catalogue. Exhibit P-127, No. 31.

 41. Defendants believe that THE MIRACLE BRA is consistent with Victoria's Secret image, and that in enhancing a woman's cleavage it makes them feel more attractive. Nichols, 10/31/95, p.128:21-24, p.131:24 to p.132:1; Mabe, 10/31/95, p.241:23-25. Among the responsibilities of VS Stores' marketing department is to "brand extend" where they feel it is appropriate. Nichols, 10/31/95, p.133:1-4. Once THE MIRACLE BRA had also proven successful for VS Catalogue, their merchandising team considered products to which they also could extend the THE MIRACLE BRA. Fedus, 11/01/95, p.166:15-22, p.167:12-15. Felder, 10/26/95, p.57:13-17; Nichols, 10/31/95, p.133:10-12. These additional products included a slip, bodysuit, and nightgown which shared THE MIRACLE BRA's cleavage-enhancement attribute. Nichols, 10/31/95, p.133:14-134:2. On November 29, 1994, VS Stores filed ten trademark applications based on an intent-to-use marks which consisted in part of the word "Miracle." These were withdrawn in April 1995, without having been put into use. Felder, 11/01/95, p.126:2-6; Mabe, 10/31/95, p.233:9-21; Exhibit D-53. By Christmas of 1994 -- approximately four months after VS Stores' application to register THE MIRACLE BRA for swimsuits, bathing suits and bikinis -- VS Catalogue had developed and marketed THE MIRACLE BRA chemise, THE MIRACLE BRA bodysuit, THE MIRACLE BRA demi-cup, THE MIRACLE BRA (bra) in satin, THE MIRACLE BRA halter and THE MIRACLE BRA bikini. Fedus, 11/01/95, p.166:23-167:3. The Court received into evidence examples of THE MIRACLE BRA swimwear, including bikinis (Exhibit P-106), bikinis with a "push-up" feature (Exhibit P-107), and one piece swimsuits (Exhibit P-108).

 42. Defendants termed their decision to broaden the use of the name THE MIRACLE BRA into swimwear "instinctive" -- a way to expose the enhanced-cleavage attribute to potential customers in as many ways as possible. Fedus, 11/01/95, p.175:5-11. Defendants primarily target women who desire to enhance their bust and who are also willing to pay a "premium" price for a swimsuit. These two target consumer pools overlap considerably; Defendants' control study indicates they may do so more frequently in the future. *fn2" B. Waldman, 10/24/95, p.38:18 to p.39:5., p.92:14-18, p.131:17 to p.132:11, p.163:6-18; Exhibit P-331. However, there is no indication that either VS Stores or VS Catalogue currently has any concrete plans to bring such products to market, nor if they did, that such products would be marketed using THE MIRACLE BRA trademark.

 43. MIRACLESUIT swimsuits and THE MIRACLE BRA products are sold through similar channels of trade. Both MIRACLESUIT swimsuits and Defendants' THE MIRACLE BRA swimsuits and lingerie are sold through catalogues. THE MIRACLE BRA swimsuits and lingerie are sold in VS Catalogue; MIRACLESUITs are sold in numerous competitors' catalogues. B. Waldman, 10/24/95, p.7:3-24, p.18:22 to p.19:4, p.21:17 to p.27:17, p.28:8-10; Sacco, 10/24/95, p.50:18-22; Exhibits P-9B(1) to P-9B(12), P-9C. It would be possible for a customer to see both a MIRACLESUIT swimsuit at a department store and THE MIRACLE BRA Bikini at a VS Stores' store within the same shopping mall. Felder, 11/01/95, p.134:3-7.

 F. PRODUCT SIMILARITIES AND DIFFERENCES

 45. Lingerie and women's swimwear are related products to the extent that they both are women's clothing, they both are worn immediately next to the skin, and they share several design features. Swimsuits incorporate bras into their design. Executives of both Defendants and Plaintiffs acknowledged that bras and swimsuits are closely-related products. Weiss Depo, Exhibit P-200, 08/07/95, p.88:10-14; Fedus, 11/01/95, p.189:5-20; B. Waldman, 10/25/95, p.100:24 to p.101:2; p.104:4-22; p.107:16 to p.108:7; Exhibits P-55B, P-55F, P-101, P-102. VS Catalogue's Divisional Merchandise Manager stated that the swimwear business is "very bra-driven" because several bra features are incorporated in swimwear. She also acknowledged that bras and swimsuits share silhouettes and sizing. Weiss Depo, Exhibit P-200, p.88:10-24; 10/30/95, p.131:11-15; Weiss, 11/02/95, p.22:24 to p.23:21. Nichols, 10/31/95, p.138:8-12. Both she and VS Stores' President stated that expansion of THE MIRACLE BRA from bras to swimwear would be a "natural extension" of the mark. Weiss Depo, Exhibit P-200, 08/07/95, p.86:3 to p.87:4; Nichols Depo, Exhibit P-205, p.94:20 to p.95:4; 10/30/95, p.131:24 to p.132:1; Nichols, 10/31/95, p.150:5-12.

 46. MIRACLESUIT swimsuits contain a variety of different bras, including some with pads similar to those incorporated into THE MIRACLE BRA. B. Waldman, 10/23/95, p.105:15 to p.107:7, p.112:1-17; 10/24/95, p.157:1 to p.157:23; Exhibits P-14, P-15. Swimwear and lingerie use some of the same designations. Among these are "bikini" and "thong", which can refer to either swimwear or lingerie bottoms. Nichols Depo, Exhibit P-205, 09/07/95, p.93:15 to p.94:6; B. Waldman, 10/24/95, p.164:21 to p.165:17; 10/25/95, p.106:4-16; Felder, 10/26/95, p.24:8-22. Exhibits P-331, P-332. Both VS Stores and VS Catalogue sell lingerie and swimwear. Nichols Depo, Exhibit P-205, 09/07/95, p.92:7-11; Exhibit P-137, 09/08/95, Nos. 42, 47, No. 131; Berkman Depo, Exhibit P-203, 09/13/95, p.35:21-23. MIRACLESUIT swimsuits also occasionally combine swimwear and lingerie features. B. Waldman, 10/23/95, p.148:17-21. exhibits P-3B, P-3C, P-3D, P-3E. VS Catalogue created THE MIRACLE BRA bikini (a swimsuit) using THE MIRACLE BRA bra (a piece of lingerie) as the two-piece suit's top. Fedus Depo, Exhibit P-201, 08/09/95, p.68:2-14; Weiss Depo, Exhibit P-200, 08/07/95, p.53:11-23.

 47. All of A&H's MIRACLESUIT swimsuits have lower torso control; a few have cleavage enhancement in the form of push-up or padded bras. Most of Defendants' THE MIRACLE BRA products have cleavage enhancement; a few have lower torso control. Weiss Depo, Exhibit P-200, 08/07/95, p.132:19 to p.133:7. The MIRACLESUIT swimsuit line and Defendants' THE MIRACLE BRA bikini control bottom both offer body control of varying degrees. B. Waldman, 10/24/95, p.158:13 to p.159:7; Fedus, 11/01/95, p.190:3 to p.192:9; Exhibits P-5, P-49-A, P-107, P-124. Plaintiffs occasionally offer products under the MIRACLESUIT name with features other than control. For example, the MIRACLESUIT swimsuit line included a push-up bra model for sale in the 1994-95 season, prior to this lawsuit. B. Waldman, 10/26/95, p.165:17 to p.167:1; Exhibit P-3. Defendants similarly have offered products under their THE MIRACLE BRA line that are not cleavage-enhancing. Exhibit P-109 is a sports bra in THE MIRACLE BRA line that apparently offers no such feature.

 48. Two of ten products using the name MIRACLE for which Defendants applied for registration with the United States Patent and Trademark Office in November, 1994, are swimsuits. The remaining eight are lingerie. Deckop, 10/31/95, p.199:19 to p.201:5, Exhibits P-100C to P-100L. A few of Defendants' MIRACLE lingerie items offer lower torso control, such as THE MIRACLE BRA control slip, high-cut control brief, Body Briefer, and panty. B. Waldman, 10/24/95, p.160:3 to p.162:25, Exhibits P-49B, P-49C, P-49D, P-103, P-105, P-111, P-124A; Felder, 11/01/95, p.127:6 to p.128:3. VS Catalogue's description of THE MIRACLE BRA control slip states that it "slims and shapes." VS Stores' control study reflects defendants' interest, as of August 1995, in developing products with control as their principal selling point, similar to Plaintiffs' MIRACLESUIT swimsuits. 10/25/95 p.88:2 to p.98:3, p.120:11-25; B. Waldman, 10/24/95, p.166:11-18; Exhibit P-331, p.25. Mabe, 10/31/95, p.236:22 to p.238:3.

 49. VS Catalogue's President acknowledged that the MIRACLESUIT swimsuit and THE MIRACLE BRA control slip both perform the same posterior-holding function. Fedus Depo, Exhibit P-201, 08/09/95, p.118:13 to p.120:9. It is difficult to distinguish the amount of control offered by these two products. Fedus, 11/01/95, p.200:8 to p.202:17, Exhibit P-49D. THE MIRACLE BRA Body Briefer, like A&H's MIRACLESUIT swimsuits, also offers a bra and a control feature. B. Waldman, 10/25/95, p.80:7 to p.83:12; Fedus, 11/01/95, p.193:18 to p.195:4, Exhibits P-35, P-49C.

 50. The maker of THE MIRACLE BRA (bra) was chosen to make THE MIRACLE BRA swimsuit as well because its expertise with one was applicable to the other. Fedus Depo, Exhibit P-201, 08/09/95, p.113:13-22. Swimwear and lingerie are advertised and promoted in the same media. National circulation magazines commonly feature and advertise both swimwear and intimate apparel. The MIRACLESUIT swimsuit and THE MIRACLE BRA line sometimes appear just pages apart. Stipulation, 10/24/95, p.137:4-14; B. Waldman, 10/24/95, p.107:21 to p.108:7; 10/25/95, p.108:8-19; Felder, 11/01/95, p.142:25 to p.143:2; Exhibits P-18T, P-20A, P-20B, P-20C, P-60A to P-60D. Several brands or trademarks are jointly used in lingerie and swimwear. These include Guess, Wonderbra, Bolero, Calvin Klein, Speedo and THE MIRACLE BRA. B. Waldman, 10/25/95, p.99:22 to p.105:2; Exhibit P-55 A-F.

 G. TRADEMARK SIMILARITIES AND DIFFERENCES

 51. The Principal Register at the United States Patent and Trade Office contains hundreds of registered trademarks incorporating the word "Miracle" as part of their mark. Nevertheless, a majority of the "miracle" marks cited in Defendants' search are either abandoned, canceled or not renewed. Hynak, 11/02/95, p.89:1 to p.90:7; Exhibits D-119 to D-182, D-184, D-186 to D-189, D- 192 to D-197, D-199, D- 201 to D-204B, D-245 A-Q. When A&H applied to register the trademark MIRACLESUIT on July 8, 1991, several other so-called "miracle" marks were already registered. *fn3" Following the registration of MIRACLESUIT, an application for a trademark MIRACLE for "shirts, jackets, caps and hats," was initially rejected on the basis of the Examining Attorney's citation of Plaintiffs' registration. However, a registration did subsequently issue for MIRACLE when applicants qualified their claim to cover only those goods used to promote a professional baseball team. Hynak, 11/02/95, p.74. Exhibit D-278.

 52. If there is a proper response to an Office Action, a trademark Examiner may reverse his or her position even though a refusal to register was issued initially for confusing similarity. Hynak, 11/02/95, p.60. Numerous examples of registered trademarks for apparel, fashion and cosmetic items in actual use that utilize the word "miracle" as part of their trademark or trade name were introduced in evidence during the course of trial. *fn4"

 53. A mark registered on the Principal Register of the Patent and Trademark Office, such as Plaintiffs' MIRACLESUIT Registration (Exhibit P-1), is presumptively valid and enforceable. Hynak, 11/02/95, p.78:3-6. Trademark registrations in classes other than class 25 (covering apparel, including swimsuits) are unrelated to the products at issue in this case. Hynak, 11/02/95, p.87:12 to p.88:25. The word "miracle" is not among the 5,000 most frequently used English words. Ross, 11/03/95, p.44:12 to p.45:15. The Patent and Trademark Office, by not requiring a disclaimer of the word "miracle" in trademark registrations on the Principal Register, recognized that "Miracle," as part of the phrase "The Miracle Bra," is a protectable word. Hynak, 11/02/95, p.95:9-18.

 54. Prior to the filing of the lawsuit by A&H Swimwear, all MIRACLESUIT swimsuits had a sewn-in label bearing the SWIM SHAPER name only. Plaintiffs decided to use a sewn-in tag bearing the MIRACLESUIT name in August or September, 1994. Plaintiffs subsequently commenced actually using the new sewn-in label in June, 1995, to avoid a change in the middle of the swimsuit season. M. Waldman, 10/27/95, p.96:19 to p.94:4; Exhibit P-30. Plaintiffs' decision to use a hangtag on MIRACLESUIT swimsuits came no later than August 15, 1994, the date it placed an ...


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