mistaken calls from nonpurchasers have little weight in real estate TM case

Rampart Resources, Inc. v. Rampart/Wurth Holding, Inc., 2024 WL 195999, No. 23-6895 (E.D. La. Jan. 18, 2024)

The court, grappling with the Fifth Circuit’s rather inconsistent law on misdirected communications, denies a preliminary injunction (subject easily guessable by party names).

Rampart Resources was founded in 1989 in Baton Rouge. It provides land and real estate services including right-of-way acquisition, servitudes, real estate brokerage, permitting, land services, and property management across several industries including utilities, oil and gas, renewable energy, and public works. Most of its current business involves land use issues but does not involve any property management, though it previously managed residential properties for ExxonMobil and multifamily apartment units for the City of Baton Rouge. Its website states: “Our core services include right-of-way acquisition, surveying, permitting, project planning, and E&P land rights management.” Its clients are predominately corporate entities and municipalities. Nonetheless, as part of its business, Rampart Resources regularly interacts with non-client individual landowners to assist its clients in acquiring land. It has a registration for its logo, comprising stylized wording and a graphic of roads. (Note that the current website seems to have removed “resources” from the logo, which I expect is a big enough change that a new registration ought to be required.)

registered RAMPART RESOURCES mark

today's website

Rampart/Wurth Holding is a Louisiana-based real estate company offering: (1) multifamily management services for multifamily units; (2) commercial management services; and (3) single-family and small multifamily management and maintenance services, handled respectively by (1) Rampart Multifamily Management; (2) Rampart Commercial Management; and (3) Wurth Real Estate Services. Its principal clients are owners of commercial and residential real estate, but R/W also occasionally interacts with the residents and tenants of their clients. Its services include rent collection, resident/tenant placement and screening, property maintenance and repairs, property inspections, and eviction services. Its website states: “Property Management is All We Do.” It adopted the Rampart/Wurth branding in 2023. This lawsuit followed after a FedEx delivery driver told Rampart Resources’ president that “another Rampart” had recently opened in Baton Rouge and that she had mistakenly gone to Rampart/Wurth’s office instead of Rampart Resources.

Several Rampart Resources employees told the president that they had received seven telephone calls in September and October 2023 from individuals attempting to contact Rampart/Wurth. The calls generally follow the same pattern: a call asks about services that Rampart Resources doesn’t provide; the caller is informed of their mistake. One caller stated that Jefferson Lakes Apartments had given her Rampart Resources’ phone number to refund a deposit.

Rampart Resources’ mark was legally protected and arbitrary. The evidence didn’t (at this stage) support a finding of geographic descriptiveness based on the prominence of Rampart Street in New Orleans, where Rampart Resources was not based. “Unlike, say, ‘Carondelet,’ ‘Tchoupitoulas,’ or a host of other well-known New Orleans streets, ‘Rampart’ has no inherent connection to New Orleans or to any specific geographical feature.”

Strength of mark: weighed in plaintiff’s favor, though not heavily so, given the arbitrariness of the mark balanced against substantial third-party use of “Rampart,” albeit perhaps only one in real estate. “Plaintiff’s sponsorship of certain events and promotion of branded items does little on its own to counteract Defendant’s evidence of widespread usage of the key portion of Plaintiff’s mark.”

Similarity: Defendant used “a key design with its branding of Rampart Multifamily Management and Rampart Commercial Management,” along with an unchallenged key design with two Rs and no other text. The only similarity between the two marks was the term “Rampart.” That was not substantial given the other elements of the marks. The total effect of the marks was dissimilar, favoring Rampart/Wurth.

not sure this is exactly what is litigated but it's what I found

Similarity of services: Where the respective services “are noncompeting, the [possible] confusion at issue is one of sponsorship, affiliation, or connection.” “The danger of affiliation or sponsorship confusion increases when the junior user’s services are in a market that is one into which the senior user would naturally expand.” Importantly, “[t]he actual intent of the senior user to expand is not particularly probative of whether the junior user’s market is one into which the senior user would naturally expand...Consumer perception is the controlling factor.”

Rampart/Wurth pointed out that Rampart Resources didn’t even bother to register its mark for “property management.” There was only a “minor overlap” in services. Property management constituted “only a small and infrequent portion of Plaintiff’s business.” Still, an expansion into the property management market was plausible, especially since Rampart Resources had done it in the past. “Moreover, the diverse array of services offered by the Plaintiff increases the likelihood of confusion among the consuming public.” This somewhat weighed in favor of finding confusion.

Similarity between parties’ consumers/clients: There was minimal overlap. “Plaintiff’s clientele includes municipal and corporate entities, particularly those in the utilities, oil and gas, renewable energy, and public works sectors. Meanwhile, Defendant’s customers are real estate developers and owners of commercial and multifamily property.” It was plausible, nonetheless, that there was some overlap.

Advertising campaigns: Rampart Resources alleged that it promotes its services primarily through its website, its “sponsorship of prominent charity and other events,” through branded marketing items such as shirts, cups, jackets, banners, signage at its offices, fliers, and folders, and, on occasion, print advertising. Both parties are findable online, and “both parties indicated that word-of-mouth advertising among their respective customer bases is perhaps their strongest form of advertising.” This factor wasn’t particularly probative, even though reliance on word-of-mouth might “diminish the importance of the dissimilarity between the trademarks.” Without much evidence, this factor was neutral.

Intent: There was no evidence of bad faith, making this factor neutral. Failing to stop use after receiving a C&D doesn’t mean bad faith.

Actual confusion: “[T]the Fifth Circuit requires more substantial evidence of confusion where the confusion does not result in swayed purchases,” and this should be weighed against the parties’ total sales volume. “[I]solated instances of confusion about the affiliation of two companies that do not result in redirected business are not enough to sustain a finding of actual confusion.”

The evidence here was entirely anecdotal. The FedEx driver wasn’t a customer/potential customer of either party and was only “briefly confused” about the names. “Proof of actual confusion requires more. For the seven phone calls, since they weren’t about overlapping services, Rampart Resources’ employees quickly identified the mistake. Maybe they were even calling about Rampart Apartments; there was limited evidence that they conflated the defendant with the plaintiff.

Even assuming they were all trying to reach Rampart/Wurth, this wasn’t particularly weighty, given the lack of evidence that actual customers were confused or swayed into doing business with Rampart/Wurth. Rampart/Wurth averred that it hadn’t received any mistaken inquiries or questions about association. Thus, the examples showed only a “fleeting mix-up of names” by persons who weren’t direct customers of either party. Also, when weighed against the volume of business conducted by the parties, the weight of seven phone calls was lessened. “[B]oth parties operate in several states, provide complex services to sophisticated clients, and interact with a wide swath of the public. Moreover, the Defendant claims to manage over 10,000 multifamily units and over eighteen million square feet of commercial real estate space.”

After all that, the court still weighed this factor slightly in Rampart Resources’ favor.

Consumer care: High, given the expense and sophistication of the relevant transactions. Rampart Resources argued that it “routinely works with property owners who are laypersons.” But none of these allegedly “unsophisticated” persons were actual clients or customers; rather they are persons whom Rampart Resources interacts with “in order for [its] clients to successfully acquire land.” This factor would become moot if this argument were accepted, given that “nearly every company, no matter how sophisticated their customers are, necessarily interacts in some capacity with unsophisticated members of the public.” The factor was the care exercised by potential purchasers, not the care exercised by anyone who interacts with the plaintiff. (This argument would be bolstered if the court were to talk about the reason we care about potential purchasers and not random people—the potential for harm.) Plus, even if landowners are unsophisticated, there was no evidence that they had been confused, even fleetingly.

Ultimately, the plaintiff showed only a “mere possibility” of confusion, not a “probability.” “The Court finds it is unlikely that the parties’ sophisticated clientele would confuse Plaintiff’s mark with that of the Defendant, especially given the limited similarity of the marks.”