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Tenth Circuit: 1-800-SKI-VAIL does not infringe VAIL service mark
February 12, 2008

In a decision last week, the Tenth Circuit affirmed a district court's ruling in a trademark case in favor of the defendant, finding the defendant's use of the vanity telephone number "1-800-SKI-VAIL" for marketing services relating to the ski industry was not likely to be confused with the Plaintiff's service mark registration for "VAIL" encompassing the gamut of commercial recreational activities and accompanying amenities available in and around the Town of Vail, Colorado. In so holding, the court found no error in the district court's holding that the ordinary consumer did not associate the word "VAIL" exclusively, if at all, with the Plaintiff VA or its ski resort, and that VA's evidence of actual confusion lacked credibility. In a spirited dissent, Judge Tymkovich argued that the totality of factors strongly confirmed that the Defendant's mark was likely to cause consumer confusion.More detail of Vail Assocs., Inc. v. Vend-Tel-Co. after the jump.Plaintiff Vail Associates (VA), owner of the Vail Ski Resort, is the owner of an incontestable serve mark for "VAIL" for "downhill skiing facilities, ice skating facilities, cross-country ski trails and expeditions, hiking and back-packing trails, and horseback riding, . . . resort hotel and restaurant services, and retail store services in the field of recreational equipment." Defendant Vend-Tel-Co (VTC) meanwhile has a registered service mark on the "vanity" or alphanumeric telephone number "1-800-SKI-VAIL" for "marketing services related to the ski industry, namely providing an automated phone switching system to offer services available in or near Vail, Colorado and nearby resort locations. VA's claim in support of infringement was that VTC's use of the geographically descriptive term "Vail" in combination with the descriptive term "Ski" infringed its "VAIL" mark, making VTC's use of 1-800-SKI-VAIL likely to cause confusion. Specifically, VA asserted that VTC's use of the vanity number was likely to cause consumers to believe that VA or its ski resort was the source of VTC's phone service, and the consumers were therefore more likely to dial the number because they perceived it as associated with VA's services. This, in turn, allegedly allowed VTC to divert business from VA by referring consumers elsewhere. Following a bench trial, the district court concluded VA failed to meet its evidentiary burden for likelihood of confusion, and entered judgment of no infringement.In reviewing the evidence at trial, and in viewing the evidence in the light most favorable to the district court's findings, the Tenth Circuit first analyzed the alleged evidence of confusion provided through VA's witnesses. VA presented three witnesses in support of its case at trial, the third of whose testimony the court characterized as "the most telling" of the witnesses. This witness was a resident of Vail and the owner of a travel agency that booked a substantial number of reservations with VA and earned a substantial amount of commissions from those bookings. VA asked her to sign an affidavit in support of its motion for summary judgment. Her initial affidavit asserted there were "many callers," "numerous cases," and "several callers" that believed that they were calling VA when they dialed the 1-800-SKI-VAIL number. The witness, however, revised her affidavit substantially to delete these phrases (as she believed they were inaccurate), after which VA ceased doing business with her travel agency. Subsequently, she signed a revised affidavit attesting to incidents of actual confusion, but testified at trial that she had felt coerced into signing the revised affidavit. VTC's witnesses at trial in turn attested to the geographically descriptive nature and therefore weak nature of the Vail term, and further noted that consumers were unlikely to exercise a high degree of care in calling 1-800-SKI-VAIL.After reviewing the evidence, the Tenth Circuit found no clear error in the district court's finding that VA failed to prove the ordinary consumer, looking for winter recreation in and around the Town of Vail, Colorado, associated the word "Vail" exclusively, if at all, with VA or its ski resort. Rather, the ordinary consumer merely viewed Vail as a place to ski, i.e., as a ski destination, without associating it with any particular entity or service provider. The court noted that VA offered little evidence of actual confusion on the part of consumers phoning 1-800-SKI-VAIL, and that what little evidence offered, namely the testimony of witness above, was discounted as being untrustworthy. Further, VA's survey evidence was thrown out on the grounds that it "suffered from question bias, interviewer bias, location bias, participant bias, and timing bias," and as such was unreliable.In addition, even though VA's federal registration had ripened into incontestable status, the court found little evidence to support the conclusion that the mark was strong. In this regard, the court noted that extensive use of the word "Vail" by third parties weighed against a holding that VA's mark was strong. Moreover, the court held that the record evidence supported the district court's finding that there was nothing in the record to suggest VTC intended to trade on VA's service mark or deceive the public into believing that the operator of the Vail ski facilities provided VTC's marketing service. The court also rejected the contention that VA could prevail on an initial interest confusion theory, as it offered insufficient evidence that such confusion was likely. In summary, the court held that none of the six fact-bound factors it had to consider in determining the likelihood of confusion, when viewed in light of the record before the court, favored VA to any significant degree and, thus, the district's court finding that VA failed to prove likelihood of confusion was not clearly erroneous. In his dissent, Judge Tymkovich disagreed with the decision of the majority, arguing that the totality of the six likelihood of confusion factors strongly confirmed that VTC's mark was likely to cause consumer confusion. With regard to the first factor, similarity of the marks, Judge Tymkovich concluded that the total effect of the two marks was similar, and that the additional elements of VTC's mark only served to emphasize the meaning for which VA trademarked VAIL. With regard to the second factor, intent, the dissent noted that the record supported VTC's intent to derive benefit from VA since, by its own admission, VTC intended to procure telephone numbers that use "the name of a major ski resort or other marketable word." Further, any doubt about intent must be resolved against the party adopting a mark similar to one already established.With respect to the third factor, evidence of actual confusion, the dissent refused to merely dismiss the testimony of the travel agent, but instead relied upon her testimony that "more often than not, there was questions with regard to general ski related products, location questions" to support a finding in favor of VA on this factor. On factor four, similarity of the products and manner of marketing, the dissent argued that the parties' services were marketed to the same class of consumers - people seeking a ski vacation in Vail. Thus, this favor all favored VA.With regard to factor five, degree of care likely to be exercised by purchasers, the dissent noted that the services at issue, namely ski vacations, are expensive luxury items many consumers plan carefully and take extra care in selecting. Nonetheless, people simply exploring ski vacation options will not exercise such extraordinary care when simply dialing a toll-free number. Thus, this factor did not appear to favor VA. Finally, on factor six, strength of the mark, the dissent found that VA had created a strong mark for skiing resort services due to its vigorous promotion of the mark in conjunction with the services. The dissent argued that the majority erred in concluding that VA's mark was not strong simply because it was also the name of a geographical location, and that the majority failed to give proper deference to the incontestable status of the registration.To read the full decision in Vail Assocs., Inc. v. Vend-Tel-Co., click here.

Eric Goldman offers his thoughts on the case here, and the Vegas Trademark Attorney offers this summary.

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