Dorpan, S.L. v. Hotel Melia, Inc.
728 F.3d 55
1st Cir.2013Background
- HMI (Hotel Meliá, Inc.) has continuously operated the Hotel Meliá in downtown Ponce, Puerto Rico since at least the 1890s but never registered the mark with Puerto Rico or the USPTO.
- Dorpan (a Sol Meliá subsidiary) owns several federally registered "Meliá" marks that became incontestable and opened the Gran Meliá resort in Coco Beach, Puerto Rico in 2007.
- HMI objected to Dorpan's local registration attempt and sued, asserting senior common-law rights to exclusive use of "Meliá" throughout Puerto Rico; Dorpan sought a declaratory judgment of non-infringement under the Lanham Act.
- The district court granted summary judgment to Dorpan, ruling that HMI was limited to use in Ponce while Dorpan could use the mark elsewhere in Puerto Rico and the U.S.
- On appeal the First Circuit vacated and remanded, holding that genuine issues of material fact exist on likelihood of confusion (including actual confusion and reverse-confusion concerns) and that summary judgment was improper.
Issues
| Issue | Plaintiff's Argument (Dorpan) | Defendant's Argument (HMI) | Held |
|---|---|---|---|
| Whether Dorpan's incontestable federal registrations preclude HMI's prior-common-law rights in Puerto Rico | Federal incontestability presumptively grants nationwide exclusive rights | HMI is the senior user in Puerto Rico; Section 15 limits federal rights where a valid pre-existing state right exists | Section 15 can limit incontestable federal rights; HMI's preexisting common-law rights must be assessed under Puerto Rico law |
| Whether Dorpan's use in Coco Beach creates a likelihood of confusion with HMI's Ponce hotel | No reasonable consumer confusion exists; hotels serve different niches and geographic zones | Marks/services/customers/advertising are similar; evidence of actual confusion and risk of reverse confusion | Genuine disputes of material fact exist on likelihood of confusion under the Pignons factors; summary judgment improper |
| Proper legal test / factors to apply | Federal Lanham Act standards govern; mark strength favors Dorpan's international brand | Puerto Rico common-law trade area depends on likelihood-of-confusion analysis; hotels' reputations can extend beyond city limits | Apply the Pignons factors; territorial scope of HMI's rights tied to areas where confusion would likely occur |
| Whether summary judgment was appropriate | Factors split; district court froze HMI's rights to Ponce and found coexistence possible | District court underweighted actual confusion and reverse-confusion risk; factual issues remain | Summary judgment was erroneous; remand for further proceedings (possibly more discovery) |
Key Cases Cited
- Cabán Hernández v. Phillip Morris USA, Inc., 486 F.3d 1 (1st Cir.) (summary-judgment inference rule)
- Colt Def. LLC v. Bushmaster Firearms, Inc., 486 F.3d 701 (1st Cir.) (de novo review of summary judgment)
- I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27 (1st Cir.) (purpose of trademark protection to prevent source confusion)
- Beacon Mut. Ins. Co. v. OneBeacon Ins. Grp., 376 F.3d 8 (1st Cir.) (relevant confusion is that which threatens commercial injury)
- Pignons S.A. de Mecanique de Precision v. Polaroid Corp., 657 F.2d 482 (1st Cir.) (the Pignons multi-factor likelihood-of-confusion test)
- Thrifty Rent-A-Car Sys., Inc. v. Thrift Cars, Inc., 831 F.2d 1177 (1st Cir.) (constructive notice from federal registration and territorial considerations)
- Allard Enters., Inc. v. Advanced Programming Res., Inc., 249 F.3d 564 (6th Cir.) (senior-user territorial rights limit federal registrant)
- Bos. Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1 (1st Cir.) (analysis of dominant/most salient mark element)
- Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700 (3d Cir.) (even a few incidents of actual confusion can be highly probative)