Indianapolis, Ind. -- The Indiana Court of Appeals has vacated a trial court's judgment in favor of the LaPorte County Convention and Visitors Bureau (the "Bureau") of LaPorte, Ind., holding that neither trademark infringement nor cybersquatting had been committed by Serenity Springs ("Serenity") of LaPorte, Ind.
On September 9, 2009, the Bureau announced at a public meeting that it planned to adopt the phrase "Visit Michigan City LaPorte" as its branding identifier for the area. A representative of Serenity was in attendance. Immediately afterward, an employee for Serenity registered the domain name "visitmichigancitylaporte.com" and set it up to redirect internet traffic to Serenity's website.
The Bureau sent a cease-and-desist letter claiming trademark infringement and cybersquatting. Serenity responded that (1) it had registered and begun using the domain name before the Bureau had made any commercial use of it and (2) the designation was not protectable as a trademark because it was merely descriptive and had not acquired distinctiveness.
In April 2010, the Bureau filed an application with the Indiana Secretary of State to register "Visit Michigan City LaPorte" as a trademark under the Indiana Trademark Act. In its application, the Bureau indicated that it had first used the mark in commerce on September 9, 2009. The application was approved. Nonetheless, Serenity continued using the visitmichigancitylaporte.com domain name.
The Bureau sued Serenity in the LaPorte Superior Court alleging, inter alia, trademark infringement, cybersquatting and unfair competition by Serenity. The trial court permanently enjoined Serenity from using "Visit Michigan City LaPorte" and ordered the transfer of the domain name "visitmichigancitylaporte.com" to the Bureau.
Serenity appealed the trial court's holding that it had committed trademark infringement and cybersquatting. The trial court had held that, due to the Bureau's status as a governmental entity, it was entitled to a different application of trademark law. Specifically, it held that there was a lesser requirement for using the mark to acquire trademark rights.
The appellate court disagreed. It has long been held that the exclusive right to use a mark is acquired through adoption and use of the mark in commerce. The appellate court also held that this mark was clearly geographical in nature and that it was "difficult to conceive of a mark that falls more squarely within the category of geographically descriptive marks." Geographically descriptive designations generally fall within the descriptive category; thus, to be protected, the must have acquire secondary meaning.
The trial court considered the entirety of the time that the Bureau had been using the mark in considering whether the Bureau had established secondary meaning. It found that such secondary meaning had been established. However, the correct test for secondary meaning is to evaluate whether secondary meaning had been established by the senior user immediately prior to the time and place that the junior user began to use the mark. As this was, on its face, entirely unsupported by evidence, the appellate court held that the trial court erred in its determination that the Bureau had acquired secondary meaning in the mark. The appellate court reversed the trial court's judgment, holding that the Bureau had not established that it held a valid and protectable trademark in the designation "Visit Michigan City LaPorte."
The appellate court did, however, point out that additional claims had been made by the Bureau which had not been reached by the trial court. One of the claims, unfair competition, does not require the existence of a protectable trademark. Instead, it is an open-ended category of torts designed to protect "commercial values." The appellate court remanded with instructions to the trial court to vacate its judgment as to trademark infringement and cybersquatting and to adjudicate the Bureau's remaining claims.
Practice Tip #1: While the Indiana Trademark Act and the Lanham Act have many similarities, the former does not provide all of the protections afforded by the latter. While the Lanham Act provides that federal registration of a mark provides prima facie evidence of its validity, the Indiana Trademark Act contains no such provisions. A certificate of registration with the Indiana Secretary of State is proof of registration only (although such a registration is necessary to support a claim of infringement under the Indiana Trademark Act).Practice Tip #2: One wonders if the entirety of this litigation might have been avoided by taking one simple step: registering the domain name before making the public announcement.