Arrowpoint Capital Corp. v. Arrowpoint Asset Management, LLC
793 F.3d 313
| 3rd Cir. | 2015Background
- Arrowpoint Capital Corp. (Capital), a Delaware holding company that provides insurance and investment services under the Arrowpoint Capital name, owns several federal trademarks incorporating "Arrowpoint Capital" and markets investment services; it alleges use of the Arrowpoint name in investment services dating back to 2007.
- Arrowpoint Asset Management, LLC and related Denver-based entities (AAM) began using the mark "Arrowpoint" between 2007–2009 to provide investment management and hedge-fund services; AAM manages substantial assets and targets high-net-worth investors.
- Capital sued under the Lanham Act and Delaware law seeking a preliminary injunction to stop AAM’s use of the Arrowpoint name in investment-related products and services; the District Court denied the preliminary injunction after extensive delay and denied two motions to supplement with additional evidence of post-briefing "actual confusion."
- Capital presented multiple instances (dozens spanning 2009–2013) of alleged actual confusion among brokers, banks, analysts, and other market intermediaries (misallocated trades, mistaken inquiries, reporter confusion, syndicate desk errors); District Court discounted these as broker/dealer or hearsay inquiries rather than "customer" confusion and refused an evidentiary hearing.
- The Third Circuit held the District Court applied an overly narrow view of actionable confusion under the Lanham Act, erred in discounting non-purchaser confusion and hearsay affidavits at the preliminary injunction stage without an evidentiary hearing, vacated the denial of the injunction and the denials of the motions to supplement, and remanded for reconsideration; it denied Capital’s request to reassign the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Lanham Act requires purchaser/point-of-sale confusion for liability | Capital: actionable confusion includes non-purchaser confusion (brokers, analysts) and initial-interest/investor confusion that harms goodwill | AAM: only purchaser/consumer confusion showing mistaken transactions is actionable; non-purchaser confusion insufficient | Court: Lanham Act covers confusion of any kind, including non-purchasers and persons who influence purchasing; District Court’s narrow view was erroneous |
| Weight/admissibility of self‑serving hearsay affidavits of actual confusion at preliminary injunction stage | Capital: affidavits and contemporaneous emails are probative and appropriate at PI stage; delay justifies supplements | AAM: affidavits are self-serving hearsay and unreliable; prejudice from late supplementation | Court: affidavits and hearsay may be considered at PI stage; District Court erred in summarily discounting them and in unexplained denials of supplementation |
| Need for an evidentiary hearing before resolving disputed factual credibility on PI motion | Capital: credibility disputes about confusion required an evidentiary hearing | AAM: credibility could be assessed from the paper record | Court: where PI turns on disputed factual issues and credibility, an evidentiary hearing ordinarily required; District Court should have held one or adequately explained refusal |
| Whether judicial delay and adverse rulings warrant reassignment on remand | Capital: long delay and evidentiary rulings show partiality; reassignment warranted | AAM: rulings and delay do not evidence bias; no basis for reassignment | Court: reassignment is exceptional; delay and adverse rulings alone do not show bias; reassignment denied |
Key Cases Cited
- Kos Pharmaceuticals, Inc. v. Andrx Corp., 369 F.3d 700 (3d Cir. 2004) (discusses Lapp factors and scope of actionable confusion beyond purchasers)
- Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 269 F.3d 270 (3d Cir. 2001) (initial-interest confusion actionable; investor confusion may be relevant)
- Country Floors, Inc. v. Partnership Composed of Gepner & Ford, 930 F.2d 1056 (3d Cir. 1991) (non-customer confusion among suppliers and business contacts can be evidence of actual confusion)
- Mid‑State Aftermarket Body Parts, Inc. v. MQVP, Inc., 466 F.3d 630 (8th Cir. 2006) (Lanham Act protects confusion among persons who influence purchasing and harms goodwill)
- Morningside Group, Ltd. v. Morningside Capital Group, L.L.C., 182 F.3d 133 (2d Cir. 1999) (financial-industry confusion often occurs pre-transaction and is actionable; evidence of inquiries and lost opportunities probative)
- A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198 (3d Cir. 2000) (courts may view employee‑collected confusion reports skeptically but must explain credibility-based rejections)
- Beacon Mut. Ins. Co. v. OneBeacon Ins. Grp., 376 F.3d 8 (1st Cir. 2004) (confusion among those influencing sales may present significant risk to trademark owner)
- Ferring Pharms., Inc. v. Watson Pharms., Inc., 765 F.3d 205 (3d Cir. 2014) (no presumption of irreparable harm under Lanham Act; movant must show likely irreparable harm)