1-800-SKI-VAIL found not to infringe VAIL ski resort mark

Vail Associates, Inc. v. Vend-Tel-Co., Ltd., — F.3d —-, 2008 WL 342272, (10th Cir. February 7, 2008)

[Brian Beckham is a contributor to Internet Cases and can be contacted at brian.beckham [at] gmail dot com.]

Vail Associates, owner of the incontestable service mark VAIL (which is used in connection with a wide variety of skiing and resort-related services), sued Vend-Tel-Co, the operator of the “1-800-SKI-VAIL” phone number, for infringement. After trial, the District Court entered judgment in Vend-Tel-Co’s favor, and Vail Associates sought review.

The Court of Appeals for the Tenth Circuit affirmed the lower court’s judgment, holding that use of Vend-Tel-Co’s “1-800-SKI-VAIL” mark (registered in 2001) was not likely to cause confusion with Vail Associates’s VAIL mark (registered in 1989).

Key to the appellate court’s decision was witness testimony from the proceedings. Vail Associates’s vice-president of marketing and sales testified that customers dialing the phone number would mistakenly think they were reaching Vail Associates, but acknowledged “hundreds of uses of the letters V-A-I-L in the names of [other] businesses in the Vail Valley.” As for the descriptive term “ski,” testimony from another witness revealed ownership of no less than 23 vanity phone numbers incorporating that term. Also important was the testimony of a travel agent who fielded calls to the number 1-800-SKI-VAIL. She testified that the typical caller would ask questions of a general nature (e.g., about products, directions, lift prices, ski conditions, etc.).

Vend-Tel-Co’s main witness, trademark attorney Kenneth Germain, testified that in the context of ski resorts, the VAIL mark was a “world renowned” strong mark, but that in the context of goods and services offered by businesses in the Vail area, it was weak (being geographically descriptive). Germain further testified that he did not deduce an intent to infringe (Vend-Tel-Co’s advertising materials promoted area businesses), and that use of the VAIL mark was a necessary, good faith component of the Vend-Tel-Co’s marketing activities.

Viewing the evidence in the light most favorable to the Vail Associates, the Court of Appeals was satisfied that the District Court did not err in finding that consumers perceive the VAIL mark as referring to a particular geographic location, namely, a Colorado skiing destination. It held that Vail Associates failed to prove consumers associate the word “Vail” exclusively with its resort services.

As to the likelihood of confusion factors, the court found none favored Vail Associates. It observed that (1) Vail Associates offered little evidence of actual confusion, and the testimony reflected that consumers recognized Vail as a destination, not a specific service provider, (2) despite some showing of secondary meaning, the VAIL mark was found to be “not particularly strong”, (3) Vail Associates did not prove that in creating the phone number Vend-Tel-Co intended to deceive the public, trade on Vail Associates’s goodwill or reputation, or infringe its mark, (4) the marks were not similar in sight, sound, or meaning, (5) the parties’ services were not similar, but rather “symbiotic”, and were not marketed in a similar manner, or with similar connotations, and (6) consumers exercised great care in purchasing Vail Associates’s services which the court termed “first class accommodations at first class prices” in contrast to dialing a toll-free number.

The dissenting opinion offered that: (1) the marks were confusingly similar (indeed, the additional “1-800-SKI” elements furthered consumer confusion), (2) Vend-Tel-Co intended to trade on the goodwill and reputation of Vail Associates, (3) there was ample testimonial evidence of actual confusion (namely the travel agent’s testimony), (4) the services and their marketing “appeal to exactly the same class of consumers,” (5) despite care exercised by consumers in purchasing ski packages, there was significant, uncured initial interest confusion, and (6) VAIL is an incontestible descriptive mark whose strength was proven by evidence of secondary meaning, and that Vend-Tel-Co did not take VAIL out of the ski resort services context; instead, it emphasized that context with their choice of mark.

Alienware goes after “free” computer offer

Alienware Corporation v. Online Gift Rewards, No. 08-1560, S.D.N.Y. (Filed February 14, 2008).

High-performance computer manufacturer Alienware has filed suit against an online marketer alleging trademark infringement, dilution, and other theories of unfair competition. Alienware claims that the defendant has “disseminated mass unsolicited electronic solicitations” and posted Web pages offering “free” Alienware laptops, when in reality, one has to perform some “onerous” tasks to get them.

According to Alienware, after accepting the offer, users must purchase a specified amount of goods from various other sites. And this obligation is not clearly communicated, but is “presented to the consumer, if at all, only after he or she expends significant time and effort in responding to inquiries and navigating the multiple prompts.”

One may be tempted to speculate that the defendant in this case could raise some kind of defense based on fair use of the trademark. (How could you let people know what you’re offering unless you tell them; and giving away actual Alienware computers also seems like it could be protected under the first sale doctrine.)

And Alienware may have anticipated this defense, by alleging that it’s only “Alienware” serving as the source identifier for the offer, and “[t]here is no other recognizable or identifiable indication of source.” The defendant is an entity called “Online Gift Rewards.” Alienware claims that the designation is “likely to be perceived as a generic description of the offering rather than a source indicator.”

[Download the complaint]

Sponsored listing trademark action survives motion to dismiss

T.D.I. Intern., Inc. v. Golf Preservations, Inc., (Slip Op.) 2008 WL 294531 (E.D.Ky. January 31, 2008)

Plaintiffs T.D.I. International and XGD Systems sued their former employee Samson Bailey and his company Golf Preservations for, among other things, violation of the Lanham Act, 15 U.S.C. §1051 et seq. Plaintiffs alleged that defendants’ purchase of plaintiffs’ trademarks to trigger competitive advertising on Google and Yahoo was trademark infringement and unfair competition.

Defendants moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the complaint, but the court denied the motion. It found that under the Twombly standard, plaintiffs had alleged facts sufficient to state a claim to relief that was plausible on its face.

Predictably, defendants had argued that the purchase of plaintiffs’ marks as keywords did not constitute a “use” of the marks as provided in the Lanham Act at 15 U.S.C. § 1127. They relied heavily on Interactive Products Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 695 (6th Cir.2003) (a case involving the appearance of a mark in the post-domain path of a URL), and 1-800 Contacts, Inc. v. When U.com, Inc., 414 F.3d 400 (2d Cir.2005) (involving pop-up advertisements triggered by page content and user activities).

Plaintiffs relied on a number of cases to argue that the purchase of keywords was a use as defined in the Lanham Act, and also (correctly) asserted that the scenario of buying keywords to trigger advertising is notably different from use in a post-domain URL (as in Interactive Products) and unseen triggering of pop-up advertisements (as in 1-800 Contacts). Given the split of authority and the corresponding “uncertain state of the law on the specific issue presented in [the] case,” the Court sided with plaintiffs and found that defendants’ arguments were not sufficient to warrant dismissal.

Anonymous alleged infringer identified with little substantive inquiry into infringement claim

[In re Subpoena Issued Pursuant to the Digital Millennium Copyrigt Act to: 43SB.com, No. 07- 6236, 2007 WL 4335441 (D. Idaho, December 7, 2007).]

When the general counsel for Melaleuca, Inc. saw some negative content someone had posted about the company on the Web site 43rdstateblues.com, he sent a cease and desist letter demanding the content be removed. The letter, however, did not accomplish its intended purpose. Instead, the site owner posted the entire letter.

Melaleuca did not give up, but just adapted its strategy. It served a DMCA subpoena [see 17 U.S.C. §512(h)] on the site, seeking to identify the person who posted the letter “so that [Melaleuca] might seek redress for copyright infringement.” Melaleuca claimed that its copyright rights in the letter were infringed when it was posted online. (Claiming copyright in cease and desist letters is not a new tactic.  See, e.g., here and here.) 

The website moved to quash the subpoena, asserting, among other things, that the letter was not subject to copyright protection, and that the failure by Melaleuca to establish a prima facie case of copyright ownership was fatal to the subpoena.

The court denied the motion to quash. The Web site had argued that Melaleuca could not own a copyright in the letter, according to 17 U.S.C. 102(b)’s exclusion of “any idea, procedure, process, system, method of operation, concept, principle or discovery” form copyright protection. But the court rejected that argument.

Declining to “go into an in-depth analysis of the merits of a copyright infringement claim in determining whether to quash [the] subpoena,” the court found that Melaleuca’s copyright registration in the letter was sufficient to establish ownership of a valid copyright.  As for alleged copying, the court found that posting of the entire letter was sufficient.

There are a couple of interesting observations to be made from this decision.  First, unlike cases in which plaintiffs seek to uncover the identity of anonymous defendants accused of defamation [see here], this court gave – relatively speaking – little inquiry into the merits of the plaintiff’s case.  Perhaps it felt that such an analysis was not necessary given that the Copyright Office had already determined copyrightable subject matter to exist (when it issued the registration certificate).

A second interesting question arises when one considers how the court might have ruled had the defendant asserted fair use as a basis for the motion to quash. (Doesn’t it seem like posting a cease and desist letter on the Internet, ostensibly for eliciting public ridicule, is a transformative use?) Given the fact intensive inquiry of a fair use analysis, the court would have probably reached the same conclusion, if anything to put off the factfinding until later.  But would a court do that in other cases where the offending, anonymous use is more obviously fair?     

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