On July 16, 2015, in Arrowpoint Capital Corp. v. Arrowpoint Asset Management, LLC, the US Court of Appeals for the Third Circuit reversed the US District Court for the District of Delaware's denial of a motion for preliminary injunction under the Lanham Act because the district court ignored the trademark owner's evidence of non-customer actual confusion and improperly focused on the lack of customer confusion (No. 14-3063, (July 16, 2015)).

Arrowpoint Capital Corp. and its subsidiaries (Capital) provide insurance and investment-related financial services under the Arrowpoint Capital name. Capital owns six registered trademarks for its services featuring the words Arrowpoint Capital or a related logo. Arrowpoint Asset Management, LLC and its related partners (AAM) also provide investment-related services, and use a logo that, like Capital's, includes the word "Arrowpoint." Capital sued AAM in the district court for trademark infringement and unfair competition under the Lanham Act. It also moved for a preliminary injunction prohibiting AAM from using the name Arrowpoint in connection with any investment-related products and services.

While Capital's motion for preliminary injunction was pending in the district court, Capital twice moved to supplement the record to introduce 11 instances of actual confusion. Though it considered the motions for four years, the district court eventually denied Capital's motions without holding an evidentiary hearing, discounting Capital's evidence of actual confusion because it was among brokers and dealers, rather than by actual customers.

In reviewing the district court's denial of Capital's preliminary injunction, the Third Circuit evaluated whether Capital was likely to succeed in showing that AAM's use of Arrowpoint was likely to cause confusion. In making this determination, the Third Circuit considered the non-exhaustive Lapp factors, which govern this analysis in the Third Circuit (see Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3rd Cir. 1983)). It noted that the sixth factor, evidence of actual confusion, was most relevant here, and that all of the factors are only proxies for the fundamental question of whether there is a likelihood of confusion.

On appeal, Capital argued that the district court:

The Third Circuit agreed, noting that likelihood of confusion under the Lanham Act is not limited to confusion of products among purchasers. The Third Circuit reiterated its well-established rule that the Lanham Act:

The Third Circuit rejected AAM's arguments that the district court's decision was entitled to deference as an evidentiary determination. It held that, because consideration of Capital's injunction motion was influenced to a significant degree by credibility issues and factual disputes, the district court erred by failing to:

Because the district court erred in its actual confusion analysis and its treatment of Capital's evidence of confusion, the Third Circuit reversed and remanded the case for consideration of the remaining Lapp factors and the remaining preliminary injunction factors.