Dorpan, S.L. v. Hotel Meliá, Inc.

Reverse confusion was considered when determining trademark infringement, despite incontestable registration under section 15 of the Lanham Act.

Opinion (Lipez): The Defendant-appellant, Hotel Meliá, Inc. ("HMI"), has operated the Hotel Meliá in Ponce, Puerto Rico, for more than a century but has never registered that mark with the United States Patent and Trademark Office ("USPTO"). The Plaintiff-appellee, Dorpan, S.L. ("Dorpan") has held several registered trademarks using the mark "Meliá" in connection with the hotel industry in the United States. In 2007, Dorpan's parent company, Sol Meliá, opened Gran Meliá, an all-inclusive resort in Coco Beach, Puerto Rico, approximately eighty miles from the Hotel Meliá in Ponce. HMI was immediately concerned that having a hotel called Gran Meliá in Puerto Rico would inevitably lead to consumer confusion. HMI filed a complaint in late 2008 against Sol Meliá in the Superior Court of Puerto Rico, asserting that it was the senior user of the Meliá mark, and that it had the sole right to use the Meliá mark. Dorpan moved for summary judgment on its declaratory judgment claim. The district court granted that motion, concluding that no reasonable jury could find a likelihood of consumer confusion between Hotel Meliá and Gran Meliá. HMI appealed, arguing that the district court incorrectly treated HMI as the junior user of the Meliá mark rather than the senior user. HMI also argues that this mistake led the court to consider only evidence of "forward confusion," and to overlook the compelling evidence submitted of "reverse confusion." The appellate court reviewed the case de novo. Dorpan held the federal registration for the Meliá mark and that registration has become "incontestible" within the meaning of Section 15 of the Lanham Act. When analyzing the facts of the case in light of the factors found in Pignons S.A. de Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 487 (1st Cir. 1981) , the Court made the following findings: The marks "Hotel Meliá" and "Gran Meliá" are essentially identical for trademark purposes because both marks have the word "Meliá" as their most salient word. The hotels offer substantially similar services to substantially similar customers. The hotels use similar advertising methods and conduct business through similar channels of trade. A reasonable jury could conclude that HMI has demonstrated at least some level of actual confusion. There is no evidence that Dorpan decided to use the mark Meliá in order to cause market confusion. Evidence in the record suggests that both marks have certain strengths, and the relevant question at trial will be whether their relative strengths contribute to consumer confusion. Due to a number of errors in the district court's analysis, and genuine issues of material fact on the likelihood of confusion, this Court VACATES the district court's entry of summary judgment for Dorpan on its declaratory judgment action seeking a declaration of non-infringement and REMANDS for further proceedings consistent with this opinion.