Serenity Springs, Inc. and Laura Ostergren v. The LaPorte County Convention and Visitors Bureau, by and through its Board of Managers
13 N.E.3d 487
Ind. Ct. App.
2014
Check Treatment

*1 SPRINGS, and Laura INC. SERENITY

Ostergren, Appellants-Defendants, LaPORTE COUNTY CONVEN- BUREAU, by AND

TION VISITORS through its BOARD OF MANAG-

ERS, Appellee-Plaintiff.

No. 46A04-1309-MI-470. of Indiana. Appeals

Court of

July 2014.

Rehearing Denied Sept. *2 Watson, Passaro, &

Jonathan A. Kahne Harbor, MI, Taylor, for Attorney Benton Appellants. Mi- Bergerson,

Michael S. Law Office of IN, Bergerson, Michigan City, chael S. Attorney Appellee.

OPINION MAY, Judge. appeals a Springs judgment County

favor of the LaPorte Convention (“the Bureau”) and Visitors Bureau permanently enjoined Serenity Springs from using the internet domain name visit- michigancitylaporte.com and transferred domain name the Bureau. As “Visit Michigan City protect- LaPorte” was not a able Springs’ trade name and of it was not unfair we re- verse.

FACTS AND PROCEDURAL HISTORY We set forth the facts this underlying v. LaPorte appeal Bureau, Cnty. & Convention Visitors N.E.2d (Ind.Ct.App.2013) 317-19 (hereinafter ”):1 “Serenity Springs I ... The Bureau “the official desti- marketing organization rep- nation industry resents the and commu- visitor growth nities to create economic expenditures.” visitor The Bureau’s goal is to increase tourism in LaPorte so, doing County, and in 1. We presented, directed the trial court on remand Bureau had limit its to evidence and receive consideration claims no new evidence. attrac- reau made commercial a number of hotels and use of the promotes Serenity operates a designation in the area. tions Visit (2) County, which is Porte, in LaPorte hotel resort that the promoted by the of the businesses one as a trademark because *3 Bureau. merely descriptive it was and had not 2009, acquired the Bureau contracted early

In distinctiveness. marketing firm to conduct private with a 29, 2010, April On the Bureau filed an purposes branding study a application Secretary of State “ ways pro- to identifying new and better register to Visit Septem- in the area. On mote tourism logo” Porte’ and as a trademark under 9, 2009, Bureau held a ber the Indiana Trademark appli- Act. its which the results of the meeting at cation, the Bureau indicated that announced, study were and a branding mark was first used in commerce on Serenity in attend- representative of was 2009, September any and disclaimed representatives an- ance. The Bureau’s rights “Michigan City” to the words phrase Michigan nounced that the “Visit “LaPorte.” The Bureau received a cer- as the City LaPorte” had been identified May tificate dated indicating area. branding identifier for the City that Michigan “Visit LaPorte” had meeting, after an Immediately registered been aas trademark with the employee Serenity registered the do- Secretary of State. The certificate also “visitmichigancityla- main name indicated that the mark first was used behest and porte.com” [the owner’s] 9, 2009, September and the words it redirect internet traffic up set to to “Michigan LaPorte” had been dis- Serenity’s day, website. Later that an claimed. employee attempted of the Bureau 26, 2011, May On the Bureau sent register the same domain but dis- another cease-and-desist letter to Seren- pur- covered that it had been ity, again asserting Serenity used to being chased and was direct infringing rights its now-regis- Serenity’s internet traffic to website. tered trademark. The Bureau attached register The Bureau was able to a num- copy of the certificate of trademark names, including ber of similar domain registration to the letter and informed visitmiehigancitylaporte.org, visitmiehi- Serenity that the letter would be its final gancitylaporte.net, michigancityla- attempt to resolve the matter before porte.com. taking legal action. Thereafter, the Bureau sent cease- Serenity response sent a letter to the Serenity claiming and-desist letter letter, Bureau on June 2010. In the Serenity infringed had its trade- Serenity again asserted that it was the cybersquatting by mark and committed commerce, party first to use the mark in registering visitmichigancitylaporte.com. argued further that the Bureau’s Serenity responded that it had been un- registration of the mark did affect able to find federal or state trade- common-law to use the registrations mark for Visit mark or confer retroactive trademark City LaPorte and further claimed that (1) Serenity rights. stated that it was will- Serenity had not committed trade- assign the domain name to the infringement registered mark because it if began using visitmichigancityla- provide proof Bureau it could that it name the Bu- used the mark in commerce on or porte.com domain before first remand, September Serenity ar- On the trial court found gued that if the Bureau had not used the had committed seven date, mark in commerce it had common-law torts: common-law trade fraudulently misrepresented the date of name infringement, a common-law tort application first use on the for trade- based on Springs’ intent to de ceive, registration, which would result in common-law amounting cy- acts registration. bersquatting, cancellation of the value, form intangible of conversion of tor- 4, 2011, January On filed tious interference with a contract or busi complaint against alleging ness relationship, tortious behavior in the infringement, cybersquatting, *4 off,”2 “palming nature of general un and unfair competition. The Bureau fair competition. permanently enjoined It sought preliminary also and obtained a using from the mark injunction prohibiting Serenity from us- Michigan City “Visit LaPorte” or the do ing the pro- domain name. The matter main name visitmichigancitylaporte.com. 8, ceeded to a bench trial on March The case now before us is an appeal from 2012, and judg- the trial court entered the trial court’s decision on remand. 1, ment in favor May of the Bureau on 2012. The trial court concluded that

Serenity had violated Indiana law DISCUSSION AND DECISION committing infringement The trial court sponte en sua “cybersquatting approaches cyber- that findings tered of fact and conclusions of piracy[.]” permanently The trial court law. When the trial court enters such enjoined Serenity using the Visit findings sponte, sua specific findings the Michigan City LaPorte designation or only cover, control as to the issues the domain name visitmichigancityla- general judgment and a applies standard porte.com, and further ordered issue on which the court has not to transfer the registration domain name Scoleri, findings. Scoleri v. entered to the Bureau. N.E.2d (Ind.Ct.App.2002). 1214-15 (Citations omitted.) and footnote In reviewing judgment, the we determine I,

In Serenity Springs we determined whether the evidence supports findings the the designation “Visit and the findings support the judgment. Porte” not subject protection be- Id. at 1215. only We will reverse when cause it was merely descriptive geo- judgment erroneous, ie., is clearly graphic location of the goods and services when unsupported by it is findings promotes, and it had not ac- fact and conclusions entered on the find quired secondary meaning through actu- ings. findings Id. For clearly of fact to be erroneous, al use of the prior mark probative record must lack Springs’ first use. Id. at 325. As the evidence or reasonable inferences from the claims, Bureau had asserted additional in- evidence to support them. Id. In deter cluding common-law unfair mining validity of the findings judg addressed, yet ment, the trial court not had only we consider the evidence favor we remanded. Id. at 327. able to judgment and all reasonable (also "passing (Ind.2006). 2. The "palm- tort off” called Under this off”) doctrine, species liability is a of unfair imposed is for the intention- emerged century misrepresentation nineteenth as a al or services as Keaton, type of fraud. Keaton & Keaton those of another. Id. therefrom, we net traffic to its main website drawn inferences to be claimed Septem- or assess credi- date. Bureau also reweigh evidence will the date of first use of general judg- Id. A ber 2009 as its bility of witnesses. any theory sup- may application be affirmed on the mark in its for trade- ment at trial. presented the evidence ported registration, and trial court found Id. that the Bureau first used the mark in Assuming commerce on that date. ar- Infringement Name

1. Trade guendo finding that the trial court’s evidence, regard supported by “Tort in this is The trial court first addressed Infringement,” of Trade Name the Nature the Bureau’s and first uses of 6), “the Bureau’s (App. determining virtually the mark were simultaneous. which the brand is a trade name under Secondary meaning acquired through mark, business” and the Bureau Bureau conducts simply actual use of a and there is of the brand as a trade “made first use no supporting evidence the record (Id. doing gave and in so it value.” name conclusion that the mark became associ- 9.) Michigan City LaPorte” is at As “Visit ated with the Bureau the minds of could not a there *5 September consumers on 2009 infringement. have been no trade name prior Serenity’s registration hours the domain name. word, name, “a A trade name is Id. at 326. device, symbol, designation, or other or a designations, that is

combination of such holding We decline to revisit our “Visit business or other person’s distinctive of Michigan City protectable, LaPorte” is not used in a manner enterprise and is question phrase as the whether the is “dis- or enterprise that identifies that business expressly adjudicated tinctive” was in Ser- or distinguishes and it from businesses See, enity Springs e.g., Indianapolis I. enterprises of others.” Keaton & Keaton Downs, Herr, 699, LLC v. 834 N.E.2d 704 (Ind.2006) Keaton, 820 (former (Ind.Ct.App.2005) adjudication is (quoting Restatement of Unfair actually litigated conclusive as to issues 12). Competition We determined subsequent and determined therein in a I that “Visit action if the two even actions are on differ- City LaPorte” not “distinctive”: “We claims), ent trans. denied. As there was difficulty accepting Serenity’s have little name, no the trial court primarily that the is argument in determining erred there was a “tort in geographically descriptive goods and infringement.” the nature of trade name services with which it has been associat 6.) (App. at Accordingly,

ed.... the mark must have secondary acquired meaning order to be Competition Unfair protectable.” 986 at 324. N.E.2d Serenity The trial court found presented noted the Bureau no evi- We Springs had committed six more torts it the mark at acquired dence issue explicitly of un characterized as variants secondary meaning competition: fair a common-law tort based Springs began using it: deceive, on Serenity Springs’ intent cybers- acts undisputed purchased amounting

It is common-law in the form of visitmichigancityla- quatting, the domain name value, in porte.com September intangible 2009 and im- conversion of tortious with a contract or rela- mediately began using it to direct inter- terference business 492 fact, in the

tionship, tortious behavior nature of the name or mark used defen- off,” “palming “general previously and a unnamed dant has come to indicate (Id. 32.) or, designate plaintiffs competition.” goods, tort of unfair defendant, phrase way, As the state it another whether “Visit fact, Porte,” as a matter of is his conduct had not become identified with the Serenity Springs began passing goods plaintiffs goods, Bureau before us- off his as it, plaintiffs it was error for the trial court to or his business as business. n n n : n : n n : Serenity Springs’ phrase find use of the competition. was unfair descriptive generic Even names I, In Serenity Springs we said this in may not be used in such a manner as to addressing the Bureau’s trademark in- pass goods off the or business of one fringement claims: man as and that of another. Where long This court has held that the exclu by long such words or names use have right sive acquired to use a mark is become in the minds identified through adoption and of the mark in public goods or business aof commerce. See v. Glassley, Johnson trader, particular it is unfair (1949) Ind.App. 88 N.E.2d 488 tion for subsequent trader to use them (“[t]he adoption mere particular goods connection with similar or busi- name as a trade without actual ness in such a manner as to deceive the market, confers no thereof pass off his business thereto, though even such adoption for that of his rival. declared”); publicly Hartzler v. Goshen 799-800) 104 N.E. at 38 (quoting Cyc. Co., C hurn Ladder IndApp. *6 added). (emphasis As 34(1914). 104 N.E. bought began using the domain name added.) 986 (emphasis N.E.2d at 320 immediately after the Bureau announced it Hartzler was an competition ac- public in a meeting, the name could not tion. Goshen Churn Ladder Company have “previously come to indicate and des- manufactured and sold a stepladder under ignate goods,” [the Bureau’s] nor could it “Security the name alleged Ladder.” It have, use,” by “long become identified in Hartzler the minds of the public with the Bureau. conspired corporation to create a which acknowledge We authority pretended should have a color of other jurisdictions suggests “single use” ‘Security use the name Ladder’ for the sufficient, or an “initial use” is e.g., Blue purpose of deceiving the public into the Bell, Co., Inc., Inc. v. Farah Mfg. 508 F.2d belief were the original makers 1260, 1265(5th Cir.1975) (use of trademark ladders, create, ... of such by and thus gained need not have wide public recogni means of the deception, an unfair and tion and even a single may use in trade tricky competition in with trade [Gosh- sustain if by followed en]. utilization). continuous commercial But N.E. 104 at 36. even that standard is not met in the case

There we noted: us; only we have the Bureau’s question every to be in determined statement of its intention to commence not, case is whether or as a matter of using phrase.3 Serenity Springs’ ac- 3. The dissent would Michigan find the Bureau "estab- lished a bona initial use of ‘Visit Hartzler, solely reject did not amount to unfair focuses on a find- tions therefore competition error for the trial of unfair in competition, and it was con- buying and using to so hold. duct the domain name court immediately after the Bureau announced it LaPorte,” was As “Visit during public meeting. See Op. p. 492. name and protectable not a trade Springs’ use of it was not unfair Hartzler, one of the first Indiana cases tion, we reverse. names, dealing with trademarks and trade

Reversed. was prior issued to the enactment of the federal and state trademark statutes. VAIDIK, C.J., concurs. case, this Goshen & Churn Ladder Co. (Goshen) brought an unfair competition RILEY, J., in part concurs dissents Hartzler, against claim asserting that the part. corporation name of Hartzler’s RILEY, Judge, concurring part and “wrongfully unlawfully selected in the dissenting part. imitation of trade name [Goshen’s] ‘Securi- Although agree majority’s I ty Ladder’ purpose for the fraudulent sparse analysis rather that Visit deceiving and appropriating LaPorte’ is not a trade good reputation.” will and [Goshen’s] Id. therefore no name in- name and Relying general on “the principles exist, respectfully I fringement can dissent competition of the law of unfair as deduced from its treatment of the Bureau’s com- jurisdictions, from cases in other and col- competition mon law unfair claim. textbooks,” lected the Hartzler court noted, majority, as alluded to competition generally defined Unfair general rule that attempt as “the to create confusion con cerning competi the source of the unfair A coming dealer into a field Rader v. goods.” Derby, tor’s Ind. by a occupied repu- rival of established (1950). App. A claim tation nothing must do which will unnec- for unfair can be instituted essarily create or increase confusion be- *7 acquired a who party has a trade name goods tween his or business and the right designation against party a who sub good or business of his rival. sequently used an identical or similar phrase. See Hartzler v. Goshen Churn Co., (Ind.1914).

Ladder 104 N.E. Even descriptive generic and names only person applied desig But a who has a may not be used in such manner as to priority nation as trademark first has in pass the goods off or business of one the use of the over another man as and for that of another. Where (Third) § user. See Restatement 19. such by long words or names use have bar, the case at both and Ser become in the minds identified enity priority usage rights claim in Visit public goods or business aof Michigan City LaPorte.’ trader, particular competi- it is unfair In its discussion of the Bureau’s claim tion a subsequent for trader to use them majority based on unfair in connection goods with similar or busi- ” 495.) by "allocating paying study LaPorte’ funds to con- We decline to hold for a marketing announcing announcing tract with a firm and and its results amounts to even a meeting." (Op. single the results in a televised or initial "use in trade.” general extremely in to deceive the Indiana case law in is ness such a manner as trademarks, goods sparse respect off his or business with to let pass Although factually that of rival. alone trade names. his close, might some cases come no court added). Ultimately, (emphasis Id. at 38 before us has dealt with the almost simul- Hartzler concludes its recitation of these registrations taneous domain names principles by declaring question in “[t]he the context of common law unfair every case is whether the defendant is in tion. goods fact as the attempting sell his Also, goods of someone else.” “[u]nfair In an to keep up effort with the modern always a of fact. question is technology,4 advances in the Restatements question every to be determined in and some out-of-state case law seem to not, fact, case is as a matter of whether away rigid requirement move from the by the name or mark used defendant has “long acquire establish a use” in order to previously designate come to indicate and priority exchange of use for “[t]he bona or, plaintiffs goods, it another to state nature of the use rather than its ex fide defendant, way, whether aas matter of frequency tent or is determinative.” See fact, passing goods is his conduct off his (Third) Therefore, § Restatement foods, plaintiffs plain- as or his as business “initial a designation use of can be suffi tiffs business.” Id. cient to constitute bona commercial use if the circumstances indicate an inten Hartzler, day,

To this decided ordinary tion to continue the use in the However, good still law. Hartzler dealt course of business.” See Restatement with advertisements and circulars. In the 18; See also La Societe Ano bar, upon case at we are called to evaluate nyme des le Galion v. Pa Jean domain names registrations. and internet Parfums tou, Inc., (2d Cir.1974) (The 495 F.2d 1265 words, In other principles Hartzler’s appropriates user who first the mark ob “long requirement” were enunciated in tains an enforceable to exclude oth a time when men drove a cart and horse it, using long ers from as as the initial proceeded slowly and life more but appropriation accompanied by and use are are difficult apply to an era where mes- an exploiting intention to continue sages speed light can be sent at the Bell, commercially.); Blue Inc. v. purchased by push can be of a Co., (5th Mfg. Farah 508 F.2d button. Although “frequently it is feasible Cir.1975) (Even single may bottles,” pour legal new wine into old sustain if followed here, the old rule —albeit still valid—sim- utilization.). continuous commercial ply cannot with keep up the modern ad- *8 technology. vances in See Felsher v. Uni- trademarks, Within the context of the Evansville, versity 599 (Third) of § Restatement 18 notes as follows: (Ind.2001). goods, In the case of trademark claims Despite my state —and nationwide re- based on a of the in mark advertis- search, single no similar typically attempt case exists—even are raised in an to 4. Similar person efforts have been made in the area use if the "has a bona intention [ ] fide (Restate- of trademark law. Until the federal to use a trademark in commerce.” 18). See, (Third) pre- e.g., § trademark statute made "actual use” a ment 15 U.S.C.A. However, 1057(c) requisite protection. provides filing § to the 1988 which that the of an recognized application registration the amendments to Lanham Act constitutes "con- acquisition rights prior the to the of actual structive use” of the mark. Arnett, director, prior to the initiation of tifier. Jack the Bureau’s rights establish designation The use of a marketing campaign actual sales. testified that a the of solicitations, presentations, or pre-sales phrase begin immediately would after the can result in the cre- advertising other public meeting by securing the domain the good symbolized by ation of will name, changing letter head and visitors designation even before actual sales. guides, employ the services of the law, although always de- The case local radio stations and newsletters. In the in a nominating user’s interest fact, the record reveals that business trademark, frequently recognizes guides cards and visitor had been the user’s such circumstances prepared with the new designation in an- protection against re- ticipation of the securing Bureau the sulting from a use of the rights ‘Visit LaPorte.’ pre-sales activity another. Such can [ ] undisputed It is furthermore a trademark use if the use is qualify as purchased the domain name ‘visitmichi- the produce required calculated to asso- gancitylaporte.com’ immediately upon the ciation between the and the user’s unveiling September Bureau’s on ordinary is done in the user’s goods and instantaneously began using it to di- course of business. rect internet traffic to its main website. light away of this move emerging By following protocol internal in allocat- rigid “long the adherence to a established ing funds to marketing contract with a of the or I use” announcing firm and results a tele- would consider the Bureau’s bona fide meeting vised in compliance Open during ordinary of the domain name provisions, Door the Bureau established a course of its business. bona initial use of ‘Visit Although acknowledging this new trend during ordinary LaPorte’ its course law, majority in the case rather non- project prospec- business calculated to chalantly opinion declared in its that “even significance tive tourists “the of the desig- single that standard is not met in [of use] nation an identifying symbol.” as Restate- us; only we have the Bu- case (Third) § ment subsequently 18. A reau’s statement of its intention to com- planned marketing campaign sufficiently using mence that phrase.” Op. p. 492. beginning marked the of commercial ex- relying heavily Rather than on the sani- ploitation identifying phrase. of the See tized version of the facts used the ma- (use desig- Restatement of a jority considering but instead the actual nation in the various advertising media can me, record before I find that the evidence designation’s significance now establish the presented reflect otherwise. The Bureau symbol an identifying surely as as as its private marketing that it contracted with a labels). appearance packaging Only early branding firm in 2009 to conduct unveiling designation, after the but study purposes identifying for the new during on-going meeting, still did Ser- ways better promote tourism the enity purchase of the corre- morning September area. On the name. sponding designa- domain Use of 2009, the Bureau held televised *9 merely marketing tion to frustrate the meeting, pursuant compliance to its with plans preparing of another seller who is Open provisions, during the Door which it a similar mark is not a branding the results of its bona announced study ordinary course of business. Restate- and introduced the to ‘Visit reasons, unique LaPorte’ ment 18. these I as its iden- For priority Serenity’s

conclude that of use in Mich- strategy ‘Visit made was to di- away vert internet traffic from the igan City LaPorte’ the Bureau. Bu- lies with website, reau’s which contained links and Moreover, Serenity’s recommendations to order to make out of [i]n a case unfair tors, by having potential vacationers view necessary it is not to show Serenity’s accommodations first. To make any person actually has been de- outspoken, confusion even more Seren- ceived conduct defendant’s and ity included links on its website to the purchase led to goods his belief natural attractions of the neigh- area and plaintiff, are the or to boring county, much like the ones found on deal with' defendant that he thinking Thus, the Bureau’s website. instead of dealing with the It plaintiff. is suffi- comparing contrasting and all available ac- deception cient to show that such will be County, commodations LaPorte Sereni- probable natural and result of defen- ty’s potential web site deceived the vaca- dant’s proba- acts. But either actual or purchasing tioner into its vacation from shown, ble confusion must be for if there Serenity. By appropriating the Bureau’s probability is not of deception, there is linking trade name and it to its own web- competition. no unfair site, Serenity created this probable confu- Hartzler, 104 (emphasis N.E. at 37-38 deception sion and and consequently com- added). While the parties present competition did not mitted unfair with the Bureau. I would affirm finding evidence that the trial court’s attempting visitors in favor of the Bureau. access the actually Bureau’s website were Serenity’s deceived into visiting website light sparse of Indiana’s and outdated purchasing and package, a vacation Sereni- law, I urge Legislature case would our and ty’s availment of this particular domain court, arises, supreme opportunity if the name poses nevertheless the risk of a beyond look the man and cart method “probability of confusion.” See id. promoted by Hartzler approved by an majority, out-of-touch and instead usher

By registering the domain name ‘visitmi- Indiana into the technological realities of chigancitylaporte.com’ linking it to its Century the 21st by formulating tools ap- website, Serenity ensured that Web sur- propriate complexities to handle the fers searching for information about the internet’s realm. diverse attractions and accommodations lo- cated LaPorte County promoted by

the Bureau were diverted to

own page Web instead. Ostergren, Laura

Serenity’s proprietor, testified that

company developed a three-day guest GRAFFENREAD, Appellant- Carlin package stay which directly was linked Defendant, the domain name and encouraged “which people [things] to do (Ap- [ ] the area.” 55). pellant’s App. p. page also in- Indiana, Appellee-Plaintiff. STATE a link cluded to the Bureau’s website as No. 49A05-1310-CR-499.

well as to Harbor Country, neighbor- Appeals Court of of Indiana. ing county. Based timing on the July and circumstances of the acquisition of the domain name

Serenity, a reasonable inference can be

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