On November 12, 2008, Fractional Villas, Inc. (“FVI”) filed a trademark infringement lawsuit against LVPalmsplace, LLC and Las Vegas residents Yvonne Milko and Janet Armkenect (“Defendants”) in the U.S. District Court for the Southern District of California. See Fractional Villas, Inc. v. LVPalmsplace, LLC. et al, Case No. 08-cv-02072 (S.D. Cal. November 12, 2008). A copy of the complaint can be viewed here.
FVI, a company based in Del Mar, California, is in the business of marketing fractional ownership of luxury properties. The company markets its services on its website http://www.fractionalvillas.com/ and has two federal service mark registrations for the mark FRACTIONAL VILLAS – a supplemental registration for the word mark alone for “Real estate consultation; Real estate equity sharing, namely, managing and arranging for co-ownership of real estate” and a principal registration for the FRACTIONAL VILLAS logo pictured above (with the words “FRACTIONAL VILLAS” disclaimed) for two classes of services (“Real estate marketing services in the field of high-value properties” and “Real estate consultation; Real estate equity sharing, namely, managing and arranging for co-ownership of real estate; Real estate time-sharing; Vacation real estate time share exchange services; Vacation real estate time-sharing; Vacation real estate timeshare services.”).
According to the complaint, FVI has been marketing its services since 2003 – although according to the Internet Archive, the website has only been up since December 2005 (which FVI pretty much admits by claiming on its website that its contents are Copyright 2005-2008). The complaint is not specific about the extent of FVI’s marketing efforts prior to the website – it does mention that FVI’s owner, Robert Vicino, was a guest on Fox News and several radio programs and has been featured in numerous print and online articles, but such appearances came after the launch of the website.
Sometime around August 2008, Defendants began marketing fractional ownership of luxury properties under the website http://www.lvfractionalvillas.com/. The Defendants also own the website http://www.lasvegasfractionalvillas.com/, which is currently focused on marketing the Palms Place Hotel & Spa at the Palms Casino Resort in Las Vegas.
FVI argues that as a result of its ongoing advertising and promotion, the “FRACTIONAL VILLAS” mark has acquired a secondary meaning (i.e., has come to be a unique identifier of FVI’s services) and the Defendants’ use of the similar mark Las Vegas Fractional Villas (and the http://www.lvfractionalvillas.com/ domain name) is likely to cause confusion.
Since FVI’s trademark registration for the word mark FRACTIONAL VILLAS is only on the Supplemental Register, the registration provides no additional rights beyond what FVI has under the common law and reinforces that the mark is not inherently distinctive (and thus FVI must make a case for acquired distinctiveness). And FVI, in its registration on the Principal Register, concedes that it does not have exclusive rights to use the mark FRACTIONAL VILLAS apart from that mark as shown.
FVI will have an uphill battle in attempting to show that FRACTIONAL VILLAS has acquired a secondary meaning in the marketplace as identifying FVI’s services. The greater the degree of descriptiveness of a mark, the heavier the burden is on the mark holder to prove that the mark has acquired a secondary meaning. In this case, FRACTIONAL VILLAS is no doubt very descriptive of the services offered by FVI under the mark. As the PTO stated in rejecting registration of FRACTIONAL VILLAS on the Principal Register on the basis that it was merely descriptive:
The wording FRACTIONAL VILLAS describes luxury villa properties having a fractional, or shared, ownership. See web sites previously provided describing FRACTIONAL VILLAS. When the mark is applied to the applicant’s services, the consumer is immediately informed that the real estate consultation is specifically in the area of FRACTIONAL VILLAS, and that the equity sharing is specifically for FRACTIONAL VILLAS. See attached pages from applicant’s own website.
Curiously, while the complaint notes that the contents of the http://www.fractionalvillas.com/ website, authored by Vicino, have been registered with the U.S. Copyright Office (TX-6-613-055 and TX-6-856-810 ), the complaint does not go on to make any claims for copyright infringement. Most likely because there is not enough content on the http://www.lvfractionalvillas.com/ to make out a prima facie case that the Defendants copied any part of the http://www.fractionalvillas.com/ website (other than maybe the concept itself, which copyright does not protect).
But the inclusion of these copyright registrations may have been a carryover from another lawsuit complaint – it turns out that this particular lawsuit is one of many that FVI has filed in the last few months. It would appear that FVI has decided to mount an aggressive intellectual property enforcement campaign against other competitors involved in the “fractional” ownership business.
Filed November 12, 2008
Fractional Villas, Inc. v. WorldFractionals.com et al
Fractional Villas, Inc. v. Paine et al
Fractional Villas, Inc. v. Harbor Light Villas et al
Fractional Villas, Inc. v. Windsor Capital Mortgage Corp. et al
Fractional Villas, Inc. v. Friedman et al
Filed September 23, 2008
Fractional Villas , Inc. v. MWS Fractional et al
Fractional Villas, Inc. v. Panama Fractional Real Estate et al
Fractional Villas, Inc. v. The Fractional Concierge, LLC. et al
Fractional Villas, Inc. v. Walker et al
Fractional Villas, Inc. v. Desert Quarters et al
Filed July 25, 2008
Fractional Villas, Inc. v. Rodgers et al
Filed July 22, 2008
Fractional Villas, Inc. v. Katz et al
Filed May 30, 2008
Vicino et al v. Allen et al
Vicino et al v. Starfish Coastal Properties, LLC et al
Vicino et al v. Coastal Resort Homes LLC et al
But with the exception of the above lawsuit against the Defendants, FVI’s lawsuits have all been copyright lawsuits (of course, trademark claims may have been asserted, but the lawsuits were classified primarily as copyright infringement lawsuits). FVI may be reaping the benefit of having registered its website with the U.S. Copyright Office since, with registered copyrights, FVI can assert statutory damages (rather than having to prove actual damages) against any other website that may have copied its website’s protected content. Of course, this also presumes that the infringement began after registration and not beforehand in which case statutory damages might be unavailable if the websites copied FVI’s website before registration even if such infringement continued after registration – see Derek Andrew, Inc. v. Poof Apparel. Corp., 528 F.3d 696 (9th Cir. 2008).
And one final unrelated note -- I wonder if the owners of Palms Place (Fiesta Palms, LLC -- see pending trademark applications here, here and here) will try to stop the Defendants from operating under the company name LVPalmsPlace, LLC.