Daily Business Review July 18, 2005

Case: Bavaro Palace S.A. v. Vacation Tours Inc.

Case no.: 04-20422-CIV-King, U.S.District Court, Miami

Description: Trademark infringement,unfair competition

Filing date: February 2004Trial date: April 6-8, 2005

Judge: James Lawrence King

Plaintiff attorney: Wilfredo Rodriguez, Holland & Knight, Miami

Defense attorney: Raymond V.Miller, Jr., Gunster Yoakley & Stewart,Miami

Details: Barcelo Bavaro Palace is a hotel on Bavaro Beach in the Punta Cana region of the Dominican Republic. It’s owned by Dominican Republic-based Barcelo Hotel & Resorts through a subsidiary, Bavaro Palace S.A.Vacation Tours is a wholesale and retail travel agency with offices in Miami and Coral Gables that offers vacation packages, hotel accommodations and other travel-related services to a number of locations, including the Dominican Republic. In 2003, Vacation Tours contracted with a firm called Viajes Barcelo, a company related to Barcelo Hotel & Resorts,to purchase hotel room accommodations at hotels in the Dominican Republic, including the Barcelo hotels. As part of the deal, Vacation Tours could resell the rooms to consumers through two Internet sites.Vacation Tours then set up a third website. In 2001, George Alvarez, a marketing consultant to Vacation Tours, registered the domain name to take reservations for the Barcelo Bavaro Palace and other hotels along the same stretch of Bavaro Beach. The website was advertised in various newspapers. Bavaro Palace S.A., the owner and operator of the Barcelo Bavaro Palace Hotel, then filed suit demanding that Vacation Tours cease using the website and stop advertising the website.

Plaintiff’s case: Rodriguez could not be reached for comment. But accordingto the judge’s final order, Bavaro Palace S.A. alleged that the travel agency’s use of the hotel name on its website violated a trademark and also constituted unfair competition with the hotel.

Defense case: Miller argued that use of the website constituted fair and legitimate use of the hotel’s name and was not trademark infringement. “If you have a business where you sell Coca-Cola, then you have a legitimate right to use the Coca-Cola name to let people know what you’re selling,” Miller said.“That isn’t trademark infringement.”Miller also argued that two other hotels listed on the website also used the Bavaro name, which describes a distinct geographic region of the DominicanRepublic, and that the website nameonly used part of the Barcelo BavaroPalace trademark.

Outcome: The key issues in the case were when does a name become a trademark,and when does the use of that name by another party constitute trademark infringement? After a 2 1/2-day bench trial, Judge King agreed with Miller’s argument and found for the defense.In his June 10 order, King said that to sustain a trademark infringement action, a plaintiff must demonstrate that the defendant’s use of a name would create a likelihood of public confusion.No such circumstance existed in this case, the judge ruled. Moreover, he wrote, a commercial user of a geographic term like Bavaro must meet a high legal standard to prove that the term should be considered its exclusive property.“At trial,” the judge wrote in his ruling,“plaintiff failed to demonstrate that the alleged mark, Bavaro Palace, was famous and distinctive, that the defendant’s domain name was identical orconfusingly similar to plaintiff’s alleged marks, and that defendants registered or used the domain names with bad faith intent to profit.”


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