This week, a Pennsylvania jury is hearing argument in a trial that will decide The Pennsylvania State University's trademark infringement claims against Vintage Brand, LLC, its affiliated company, and its owner. According to court records, Vintage Brand selects and scans images from sports memorabilia to print them on blank products, such as apparel and other items. It then sells the printed products through its website to consumers across the United States. From 2018 to 2021, Vintage Brand offered consumers a choice of "Penn State Nittany Lions Vintage Designs," which could be printed on merchandise sold through its website. Penn State took issue with Vintage Brand's use of the "Penn State" designs, as Penn State did not license or otherwise approve the designs for use by Vintage Brands. So Penn State initiated the present lawsuit.
So now the parties dispute whether consumers are likely to be confused by Vintage Brand's "Penn State" designs as somehow being authorized by, approved by, or affiliated with Penn State. Trademark practitioners and brand owners should monitor the outcome of this dispute closely, because if the answer is no, the jury's decision could have a ripple effect throughout the entire sports licensing industry, in addition to other industries.
To establish trademark infringement, "a plaintiff must demonstrate that (1) it has a valid and legally protectable mark; (2) it owns the mark; and (3) the defendant's use of the mark to identify goods or services causes a likelihood of confusion." A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3d Cir. 2000) (internal citations omitted). Prior to trial, both sides agreed to various facts, essentially narrowing the issues to be decided by the jury. Among the agreed-upon facts are those related to Vintage Brand's ownership, website, founding, and business model, as well as facts related to Penn State's ownership of various U.S. trademark registrations. The parties have even agreed on the Penn State-related images that Vintage Brand has depicted on merchandise and sold, and the number of products and revenues received by Vintage Brand in connection with the "Penn State Nittany Lions" storefront on Vintage Brand's website. Practically, these agreements would make it difficult for Vintage Brand to either challenge Penn State's ownership of the asserted registered trademarks or the assertion that it sold merchandise bearing the Penn State-related images, essentially leaving only a major factual question of likelihood of confusion for the jury to establish trademark infringement liability.
To answer that question, both sides intend to present experts to the jury who have studied the likelihood of confusion among consumers involving Vintage Brand's products. Whatever decision the jury arrives at, given the wide-reaching effect it may have on the sports licensing industry, there will likely be a timely appeal to the U.S. Court of Appeals for the Third Circuit.
But that appeal may not be straightforward, because both sides submitted various motions for judgment as a matter of law. In response, the court granted Defendants' motion for judgment as a matter of law as to Sportswear, Inc., the entity involved with manufacturing the allegedly infringing merchandise. And the court granted Sportswear, Inc.'s request for judgment in its favor by concluding that manufacturing the alleged infringing merchandise was insufficient for direct infringement liability—an issue likely to be appealed as to whether the court's application of law was correct. Since that ruling, Penn State moved for reconsideration, arguing that Sportwear, Inc. was not merely a manufacturer but the exclusive distributor of the allegedly infringing products, and that "[t]he Lanham Act expressly identifies such distribution of infringing merchandise as a form of direct infringement." Dkt. 313, at 1. In turn, Penn State has also moved for judgment as a matter of law with respect to Vintage Brand's counterclaims and affirmative defenses, including affirmative defenses for nominative fair use and functionality. Dkt. 321. On appeal the Third Circuit will analyze the denials of requests for judgment as a matter of law under plenary review. When analyzing a judgment as a matter of law, "[t]he question is not whether there is literally no evidence" supporting the movant, but whether "a reasonable jury would…have a legally sufficient evidentiary basis to find" for the movant. Lontex Corporation v. Nike, Inc., 107 F.4th 139, 151 (3d Cir. 2024) (citing Fed. R. Civ. P. 50(a); internal citations omitted). And the Third Circuit will view the evidence in the light most favorable to the verdict winner. Lontex Corp., 107 F.4th at 151. Accordingly, the Third Circuit does not "weigh the evidence, determine the credibility of witnesses, or substitute [its] version of the facts for the jury's version." Id.
The trial and motion practice are ongoing. Please watch for further updates and analysis by the Venable team.