Thursday, January 12, 2012

Incontestability not enough to help weak mark

Holding Company of the Villages, Inc. v. Power Corp., 2012 WL 39395 (M.D. Fla.)
Eric Goldman has often made the point that a non-famous TM owner runs a risk in bringing edgy TM claims: if the court isn’t interested in pushing the limits, that can end with a negative judgment on the strength of the mark itself, and that’s often just deserts.  Here’s an example.
Plaintiff alleged infringement, federal dilution, false advertising, and unfair competition based on defendant’s use of “Villages of Lakeside Landings” in connection with the sale of real estate, in competition with plaintiff’s federally incontestably registered “The Villages,” in use since 1992.  (Federal dilution?  Really?)
Defendant developed a residential community in Sumter County, Florida.  Plaintiff bought adjacent property about two years after defendant began its development.  In 2004, defendant sent a letter asking whether plaintiff had any objections to defendant’s use of “The Villages” as part of its proposed mark, and plaintiff did.  Nonetheless, defendant began using the name “Lakeside Landings at The Villages.”  After threats, defendant renamed the development to “Lakeside Landings,” but still used “Villages of Lakeside Landings” in its signs, ads and website.
In a fruitless effort to avoid litigation, defendant removed the “s” to make the name “Village of Lakeside Landings,” and uses a sailboat logo with almost all its uses of the name in ads and signs.
Plaintiff only argued infringement in its analysis of likely success on the merits in its motion for preliminary injunction (why did it bring that dilution claim, again?) so the court analyzed only infringement.
The most important factors the court considered were the type of mark and evidence of actual confusion.  Incontestability serves to enhance a mark’s strength. However, defendant documented extensive third party use in Florida and throughout the US, both in real estate and in other industries (thousands of businesses registered in Florida use “Villages” in their names, for example).  A neighboring residential development, Villages of Parkwood, has used the term in its name for at least five years, advertising itself as being “Near the Heart of The Villages.”  The PTO noted that “[t]he term village, or its plural, is a common industry term which describes or names a residential community. The term village is routinely disclaimed or registered under Section 2(f) in registrations for names containing such wording.”  Thus, plaintiff’s mark was weak and deserved only narrow protection.
Similarity: both parties used a family of “Village(s)” marks.  In addition to “The Villages,” plaintiff used “Village of Ashland and Lynnhaven.”  However, in overall impression, the marks were distinctly different.  Defendant uses “Lakeside Landings,” along with a different font, color, and style, and an image of a sailboat.  The court also noted plaintiff’s position before the PTO when it was distinguishing other Village(s) marks from its mark: plaintiff argued that “The Village at Bear Trap Dunes” and design, “The Villages of Taylor” and design, “The Village” and design, “The Villages at Turning Stone” and “The Villages at Turning Stone” and design, “contain very different words, and four out five include unique designs which set them apart from [Plaintiff's] [m]ark in sound, connotation, overall appearance, and accordingly, commercial impression.”  As a result, plaintiff couldn’t turn around and claim that marks in substantially the same form were similar to its mark.  This favored defendant, and the court cited precedent that, where the primary word in the mark was weakly protected to begin with, minor alterations could negate any confusing similarity.
Similarity of services, advertising, and target customers thus didn’t help plaintiff much, especially since the customers were sophisticated and buying real estate isn’t a knee-jerk purchase, something plaintiff had also told the PTO in its quest to register.
Plaintiff argued that the similarity of the marks and services plus the parties’ geographic proximity indicated bad faith. The court disagreed.  Defendant backed off “Lakeside Landings at the Villages” despite its belief in its right to use the term based on numerous third-party uses, and made further changes to avoid litigation.  There was no evidence of intent to infringe.
There was also no compelling evidence of actual confusion.  A former resident of Lakeside Landings (the place) drove past the entrance to defendant’s property and noticed the “Villages of Lakeside Landings” sign, and assumed that plaintiff bought defendant’s development.  A week later, he contacted plaintiff’s counsel and his confusion was clarified.  The court gave this little weight, because he found the testimony self-serving, and the resident wasn’t a customer or potential buyer.
No likely success on the merits.

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