La Quinta Worldwide v. Q.R.T.M.

With regard to trademark infringement, consumer confusion must be analyzed by weighing eight factors in order to determine the likelihood of confusion; and, before a permanent injunction may be granted, the court must take into account all relevant facts, balancing each party’s interests.

Q.R.T.M., S.A. de C.V. ("Quinta Real"), a luxurious Mexican hotel chain, appealed from a permanent injunction preventing them from expanding their hotel chain into the United States due to trademark infringement. La Quinta Worldwide LLC ("La Quinta") is an American Hotel chain, which argued that Quinta Real’s expansion would lead to consumer confusion. The district court ruled that there was a likelihood for confusion and ordered a permanent injunction. On appeal, Quinta Real argued, among other things, that there was no likelihood for confusion among American consumers. The Ninth Circuit analyzed this issue by using the following factors as guideposts: “(1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) the type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product lines.” The panel held that six of the eight factors weighed in favor of La Quinta, and that the remaining two were neutral and did not necessarily weigh against anyone. Accordingly, the panel agreed with the district court’s conclusion that there is a likelihood for confusion between the two brand names. However, the panel found that the district court did not adequately balance the equities involved in issuing a permanent injunction. The panel directed the district court to review their decision, while keeping in the mind the totality of circumstances bearing weight on each party. AFFIRMED in part; VACATED and REMANDED in part.