United Country Real Estate, LLC v. United Realty Group, Inc.
Filing
151
ORDER/FINDINGS OF FACT AND CONCLUSIONS OF LAW. Signed by Judge Beth Bloom on 9/29/2017. (pes)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-cv-60154-BLOOM/Valle
UNITED COUNTRY REAL ESTATE, LLC,
Plaintiff,
v.
UNITED REALTY GROUP, INC.,
Defendant.
_____________________________________/
FINDINGS OF FACT AND CONCLUSIONS OF LAW
THIS CAUSE is before the Court following a four-day bench trial that began on May 8,
2017 and ended on May 15, 2017. Pursuant to this Court’s Order, ECF No. [138], the parties
submitted proposed findings of fact and conclusions of law following the filing of the trial
transcripts. See ECF No. [149] (Defendant’s Proposed Findings of Fact and Conclusions of
Law); ECF No. [150] (Plaintiff’s Proposed Findings of Fact and Conclusions of Law). The
Court has carefully considered the evidence presented at trial, the applicable law, and the parties’
submissions. Set forth below are the Court’s relevant findings of fact and conclusions of law.
I.
INTRODUCTION
Plaintiff United Country Real Estate, LLC (“Plaintiff” or “United Country”) and
Defendant United Realty Group, Inc. (“Defendant” or “URG”) are both real estate companies
that do business in Florida. United Country filed this lawsuit on January 26, 2016, alleging that
URG is infringing on two federal trademark registrations United Country holds for the word
“UNITED.”
United Country maintains that URG’s advertisement of real estate brokerage
services to prospective real estate agents using its UNITED REALTY GROUP mark is likely to
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cause confusion with United Country’s advertisement of real estate brokerage services to
prospective real estate agents and brokers using the UNITED mark. United Country asserts two
counts of trademark infringement in violation of the Lanham Act—one under 15 U.S.C. § 1114
(Count I) and another under 15 U.S.C. § 1125(a) (Count II)—for which it seeks declaratory and
injunctive relief, disgorgement of URG’s profits, and an award of attorneys’ fees and costs.
Defendant URG maintains that United Country has failed to establish the requisite likelihood of
confusion between the marks at issue, and that, in any event, United Country’s claims are barred
by URG’s assertion of the affirmative defense of laches.
II.
FINDINGS OF FACT
A. United Country’s History and Current Corporate Structure
United Country is a limited liability company that exists under the laws of Delaware, is
headquartered in Missouri, and has offices nationwide. United Country’s predecessor-in-interest
was founded in 1925 as United Farm Agency. In 1987, United National Real Estate, Inc.
purchased the trademark assets and goodwill of United Farm Agency. The trademarks and
goodwill were acquired by First Horizon Corporation, which later changed its name to United
Country Real Estate, Inc. Five D, Inc. acquired all the stock of United Country Real Estate, Inc.,
and in 2015, transferred all of its assets to a newly formed entity, Five D I, LLC (“Five D I”).
Also in 2015, United Country Real Estate, Inc. transferred all of its assets—including trademarks
and goodwill—to newly-formed United Country (i.e., Plaintiff). Currently, Five D I is the sole
member of United Country.
B. The Two Trademarks at Issue and their Use by United Country and its Affiliates
United Country owns U.S. Trademark Registration Number 1,109,683 (the “’683
Registration”) for the standard character UNITED word mark issued on December 19, 1978 in
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connection with real estate brokerage services. United Country also owns U.S. Trademark
Registration Number 3,063,245 (the “’245 Registration”) for the standard character UNITED
word mark, which was filed on March 1, 2005 and issued on February 28, 2006, in connection
with franchisee services, namely offering technical assistance in the establishment and/or
operation of real estate brokerages. Both the ‘683 Registration and the ‘245 Registration for
UNITED (collectively, the “UNITED marks”) are valid, subsisting, and incontestable. United
Country owns all right, title, and interest in the ‘683 Registration and the ‘245 Registration for
the UNITED marks. The UNITED mark is incorporated by United Country’s logo, which
appears as follows:
Further, the United States Patent and Trademark Office (“PTO”) has accepted United Country’s
declarations of use for UNITED as a standalone mark since 1978, when the ’683 Registration
issued.
United Country and its affiliates, including Five D I as a non-exclusive licensee (d/b/a
“United Real Estate”), provide real estate brokerage services under two brands.
United
Country’s services focus on country and vacation properties, whereas United Real Estate’s
services—central to this lawsuit—focus on urban, residential properties. With respect to the
United Real Estate brand, United Real Estate has a non-exclusive license from United Country to
use the UNITED Marks, with a right to sublicense the UNITED Marks in connection with the
advertising, promoting, and rendering the services recited in the ‘683 Registration and the ‘245
Registration. United Real Estate in turn sublicenses the rights to use the UNITED marks to its
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franchisees. The UNITED mark is also incorporated by United Real Estate’s logo, which
appears as follows:
United Country and its affiliates, including United Real Estate, use the UNITED marks in
commerce. As examples, United Country uses the UNITED marks—either in stylized or basic
text form—in its publicly available franchise disclosure documents, on its websites, and in its
advertisements to prospective brokers and agents. See Plaintiff’s Exhibits (“Pl. Exhs.”) 35-36,
40-41, 44-48.
Further, United Country offered evidence reflecting its efforts to enforce its rights under
the UNITED marks against third parties. That evidence related to cease and desist letters to third
parties, settlement agreements whereby third parties agreed to rebrand, judgments from five U.S.
District Courts that enjoined third party defendants from using marks that are similar to the
UNITED marks, and proceedings in the PTO whereby United Country opposed a mark or sought
to cancel a registration that it perceived as likely to cause confusion. See Pl. Exhs. 68, 69A-72A,
73-75, 76A-77A, 78, 79A, 80-85, 88, 94A-95A, 96A.
C. United Real Estate
United Real Estate began marketing its real estate brokerage services in the Florida
market in 2013. The first of United Real Estate’s franchises for the urban market in Miami
opened as operational in August of 2016 by franchisee International Gateway Realty
Corporation, owned by Elizabeth Diaz de Villegas. At the time of trial, the United Real Estate
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brand had four franchises in Florida: two in Miami, one in Fort Meyers, and one outside of
Orlando. 1 The real estate brokerage services provided by United Real Estate under the UNITED
marks include recruiting brokers to start a United Real Estate franchise, recruiting real estate
agents to join United Real Estate franchises and assisting broker-owners in their recruitment of
agents, and providing resources to both brokers and agents to assist in advertising, marketing,
and ultimately closing transactions for buyers and sellers. At trial, Peter Giese, the President of
United Real Estate, testified that the cost for purchasing a new United Real Estate franchise can
range from approximately $54,000 to $360,000 and that the process, which includes the
execution of a lengthy franchise agreement, typically takes between 30 and 60 days. With
respect to agent compensation, United Real Estate utilizes a 100% commission model with a flat
transaction fee.
Of particular importance in this case is United Real Estate’s recruitment of brokers and
agents. United Real Estate primarily recruits prospective franchisees (i.e., brokers) through
targeted emailed marketing pieces, as well as through its broker-facing websites. United Real
Estate also assists franchisees in the recruitment of agents through marketing done for individual
franchises as well as through setting up agent-facing websites for each franchise to recruit
agents. The marketing pieces are mass emailed to brokers and agents, and usually contain a link
to one of United Real Estate’s websites, where prospective brokers or agents can fill out a form
to learn more about United Real Estate’s offerings. If a broker receives a marketing piece and
requests additional information, United Real Estate follows up directly on the lead. If an agent
receives a marketing piece and requests additional information, United Real Estate forwards that
submission to the nearest United Real Estate franchise so the broker of that franchise can follow
up on possible recruitment of the agent. As an example, Ms. Diaz de Villegas testified that after
1
In total, United Real Estate has 66 franchise territories throughout the United States.
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becoming a franchisee, United Real Estate provided her referrals for prospective agents and set
up a recruitment website for prospective agents to join her office.
In addition to the above mentioned recruitment efforts, United Real Estate has advertised
in Florida Realtor Magazine and other print media, on social media platforms, and on third-party
websites.
The extent of United Country’s advertisement—including that for United Real
Estate—has been substantial, ranging from approximately $6 million to $10 million annually
over the previous nine years.
D. United Realty Group
Defendant URG is a family-managed corporation that exists under the laws of Florida.
Defendant URG was incorporated in 2002 and obtained its license as a real estate company on
July 18, 2005.
After obtaining its license, URG subsequently began providing real estate
brokerage services under the trade name “United Realty Group.” Defendant URG operates
primarily in southern Florida and Orlando, with a total of 18 offices located throughout the
Miami-Dade, Broward, and Palm Beach Counties, and Orlando.
Defendant URG has two
qualified brokers and, at the time of trial, approximately 2,000 real estate agents who assist
individuals seeking to buy, sell, or rent property in primarily urban areas. Defendant URG uses
the UNITED REALTY GROUP mark in logo form:
and in basic text form—separate and apart from its logo—on its website, signage, and
advertisements to agents. See Defendant’s Exhibits (“Def. Exhs.”) 6, 30, 114; Pl Exhs. 52, 56,
62-63.
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Defendant URG does not sell franchises and does not recruit real estate brokers, but
instead targets only agents. Like United Real Estate, URG offers prospective agents a 100%
commission model with a flat transaction fee. Defendant URG advertises to prospective agents
in select regions of Florida—a list of which is provided to URG by a third-party vendor—
through marketing pieces that are mass emailed to agents. The emails typically display the
UNITED REALTY GROUP mark, either in text or logo form, and inform the targeted agents of
URG’s compensation model. In addition, URG, like United Real Estate, has advertised in
Florida Realtor Magazine. The majority of URG’s agent referrals, however, result from word of
mouth, as is reflected by URG’s relatively modest advertising costs; over the past five years,
URG spent approximately $60,000 annually on advertising, which includes the salary for its
recruiting director. Finally, before becoming associated with URG, a prospective agent must
usually go through an in-person or verbal interview process with URG’s recruiting director or
another member of the company and must fill out paperwork.
At trial, principals and employees of URG testified that URG recruits only “seasoned”
agents, although no uniform standard was presented for what qualifications or experience would
be required of a prospective agent to be considered “seasoned” by URG. See, e.g., ECF No.
[146] at 134-39, 195-96; ECF No. [147] at 67-71, 115-16, 134-35, 170-71. Michael Brownell,
URG’s Vice President and one of its two licensed brokers, confirmed that URG’s advertisements
are sent to all agents in a targeted region based on the agent list provided by the third-party
vendor, and that URG has no control over the type of agent its advertisements are sent to. See
ECF No. [147] at 174-75. Also, URG’s recruiting director testified that it is possible that URG
has hired over 100 agents with less than one year of experience. See ECF No. [148] at 67-71.
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E. The Instant Trademark Dispute
On July 11, 2014, United Real Estate sent an initial cease and desist letter to URG,
alleging that URG’s use of the mark UNITED in connection with services similar to United Real
Estate’s services constituted infringement on the UNITED marks, and therefore demanding that
URG cease and desist from such further use of the mark UNITED. Prior to receiving the July
11, 2014 cease and desist letter, URG had never heard of United Real Estate. United Real Estate
sent a follow-up cease and desist letter to URG on August 14, 2014. Following URG’s receipt of
the second cease and desist letter, David Chambless, a co-owner of URG, called and spoke with
Jessica Barnard, the signatory on the cease and desist letters. Ultimately, URG did not comply
with United Real Estate’s requests, and this lawsuit commenced on January 26, 2016.
i. Potential Confusion Related to the UNITED Marks
United Country presented evidence of four specific instances—each instance relating to
interactions between United Real Estate and unrelated individuals—which United Country
argues amounts to actual consumer confusion as to whether United Real Estate and URG are
affiliated. First, Mr. Giese testified that in June of 2014—before United Real Estate had any
offices or franchises in Florida—he spoke on a panel at a national real estate conference about
new business models in the real estate industry, such as United Real Estate’s 100% commission
model. Following the panel discussion, Mr. Giese was approached by Christine Hansen, a fellow
panelist and the broker/owner of Century 21 Hansen Realty in Fort Lauderdale, Florida. On the
witness stand, Mr. Giese recalled that Ms. Hansen had indicated to him her belief that United
Real Estate already had a presence in Florida, which of course was not the case. Mr. Giese
believed that Ms. Hansen must have been referring to URG. When called as an impeachment
witness, Ms. Hansen testified that she could not recall whether or not she spoke to Mr. Giese at
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the June 2014 conference. All that Ms. Hansen could recall is that she had a conversation with
one of the panel members, and that during that conversation she stated either: “You guys are in
Florida” or “Aren’t you guys in Florida?” ECF No. [146] at 140. Ms. Hansen also testified that
she did not specifically refer to URG during the conversation, id. at 137, but she did confirm that
she has known Mr. Chambless (one of URG’s owners) in a professional context for
approximately fifteen years and that her most recent real estate business dealing with Mr.
Chambless was in 2013, see id. at 144-46.
Second, Mr. Giese testified that in July of 2016 he received a form submitted through one
of United Real Estate’s websites from an individual identifying himself as Clay Hyslop. The text
in the “message field” of the form indicated that Mr. Hyslop was interested in “joining as an
agent,” that he had been a “realtor in Florida since 2005,” that he was considering moving his
license from his current broker, and that he recalled “seeing United Realty’s adverts and
attractive commission schedule.” Pl. Exh. 51. Mr. Giese forwarded the form submission to
United Country’s CEO and legal department the same day he received it, stating: “Confusion
with us and United Realty in Florida. We haven’t started marketing our commission schedule in
Florida yet, just our franchise opportunity.” Id. Mr. Giese testified that at that time, no United
Real Estate offices were open in Florida, and also that United Real Estate’s 100% commission
model would not have been advertised until an office opened and United Real Estate and a
franchisee were actively recruiting agents.
Third, Ms. Diaz de Villegas testified that she received an email marketing piece from
URG in July of 2013 that advertised URG’s “100% commission” and “$299 Transaction Fee”
model, and that she saved the email in her folder consisting of advertisements from other
realtors. Ms. Diaz de Villegas forwarded that email to Orlando Pedrero, United Real Estate’s
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Executive Vice President of Franchise Development, more than two years later in August of
2015—when franchise negotiations between her and United Real Estate began to intensify. The
text of Ms. Diaz de Villegas’ email to Mr. Pedrero reads: “I’m confused? These people are
advertising like crazy ! Is this you?” Pl. Exh. P052. Ms. Diaz de Villegas testified that although
she had previously been made aware that United Real Estate and URG are two separate entities,
she was still confused as to whether there was an affiliation because of the URG marketing
email, particularly given the shared use of “United” in the company names and that both
companies utilize a 100% commission model. Ms. Diaz de Villegas further testified that she
reached out to Mr. Pedrero because she did not want to be affiliated with URG.
Fourth, Mr. Pedrero received reports in early 2016 from his sales director in south Florida
in which the sales director expressed his perception that certain prospective franchisees that he
had spoken with were confused as to United Real Estate and “the locally based real estate
company with a similar name.” Pl. Exh. 53.
ii. Third Party Use of “United” in Florida’s Real Estate Brokerage Field
Defendant URG presented evidence in the form of printouts from the Florida Department
of Business and Professional Regulation’s (“DBPR”) website demonstrating that at least 45 other
businesses in Florida use the word “United” in their company name and have a license from the
state of Florida to provide real estate services. The DBPR records establish that the listed
businesses are smaller in size compared to United Real Estate and URG, as none of them have
more than 26 agents and brokers. To show that these 45 businesses were operational and
actively conducting business in Florida’s real estate brokerage field, URG introduced: testimony
by its principals and employees who personally visited several of the identified businesses’
locations; licensing records from the DBPR demonstrating active brokerage licenses and licensed
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real estate agents; evidence of active real estate listings from the Multiple Listing Service
(“MLS”), which is the trade directory used to list properties for sale or rent; directory listings for
many of the identified businesses in the Florida Yellow Pages listings; and screenshots of many
of the identified businesses’ websites. 2
Finally, URG offered Dr. Wayne D. Hoyer, Ph.D., as an expert witness, who testified that
widespread third-party usage of the word “United” in various industries makes the UNITED
marks at issue weak. Dr. Hoyer elaborated that when a word mark—especially one that is a
common word such as “United”—is used by many different businesses, it is more difficult to
build within the minds of consumers a strong brand association with that mark. It is therefore
unlikely, in Dr. Hoyer’s opinion, that consumers will draw an association between either the
UNITED mark and United Country, or between United Country and URG. Dr. Hoyer testified
that he based his opinion as to the widespread third-party usage of the word “United” on a
Google internet search he performed prior to trial, which revealed a number of websites owned
by businesses with “United” in their company name. 3
2
Defendant URG also introduced evidence in the form of website printouts of at least 100 other
businesses in the real estate industry throughout the United States that use the word “United” in their
company name. Additionally, URG offered certified copies of 32 different trademarks granted by the
PTO that include the word “United,” several of which belong to businesses that provide some form of real
estate services.
3
Previously, the Court found that the methodology originally employed by Dr. Hoyer—which involved
his reviewing of a Thompson Search Report and counting the number of times “United” appeared
therein—was inadequate and did not rise to the “same level of intellectual rigor that would have
accompanied such an analysis had it been conducted outside the litigation context under normal time
constraints.” ECF No. [92] (granting in part United Country’s Motion to Strike). On that basis, the Court
precluded Dr. Hoyer from offering at trial any opinions that he formed based on the Thompson Search
Report. Id. at 15-16.
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III.
CONCLUSIONS OF LAW
A. United Country is the Proper Plaintiff
As a preliminary matter, use of the UNITED marks by United Real Estate—as a non-
exclusive licensee and the sole member of United Country—as well as by United Real Estate’s
sub-licensees, inures to the benefit of United Country—the owner of the UNITED Marks. See
15 U.S.C. § 1055. Such use of the UNITED marks therefore constitutes use by United Country,
and United Country as the owner of the UNITED marks is the proper party and the only party
with rights to sue for enforcement of rights under the Lanham Act. See generally Geltech
Solutions, Inc. v. Marteal, Ltd., 2010 WL 1791423, at *3 (S.D. Fla. May 5, 2010) (“In order to
bring a trademark infringement suit under 15 U.S.C. § 1114, the plaintiff must be a ‘registrant,’
a term that only encompasses the trademark registrant and its ‘legal representatives,
predecessors, successors and assigns.’”) (quoting 15 U.S.C. § 1127) (emphasis added).
B. Trademark Infringement under 15 U.S.C. §§ 1114(1)(a), 1125(a)
A defendant is liable for trademark infringement under the Lanham Act if it, without
consent, “uses ‘in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark’ that ‘is likely to cause confusion, or to cause mistake, or to deceive.’” Fla. Int’l
U. Bd. of Trustees v. Fla. Nat’l U., Inc., 830 F.3d 1242, 1255 (11th Cir. 2016) (quoting 15 U.S.C.
§ 1114(1)). In order to prevail on a claim for trademark infringement under either 15 U.S.C. §§
1114 or 1125 (unfair competition), a plaintiff must demonstrate (1) that its mark has priority and
(2) that the defendant’s mark is likely to cause consumer confusion. See id. (citing Frehling
Enters., Inc. v. Int’l Select Group, Inc., 192 F.3d 1330, 1335 (11th Cir. 1999)); Babbit Elec., Inc.
v. Dynascan Corp., 38 F.3d 1161, 1181 (11th Cir. 1994) (stating that the analysis under § 1125 is
the same as under § 1114).
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IV.
ANALYSIS
A. Priority
United Country’s ’683 Registration constitutes constructive use and notice of the
UNITED mark, conferring a nationwide priority since December 19, 1978 over any rights that
any third party may assert in or to United Country’s UNITED mark and/or confusingly similar
variations thereof. 4
See 15 U.S.C. §§ 1057(c), 1072.
United Country’s ’245 Registration
constitutes constructive use and notice of the UNITED mark, conferring a nationwide priority
since March 1, 2005 over any rights that any third party may assert in or to United Country’s
UNITED mark and/or confusingly similar variations thereof. See id. The Court finds that
United Country’s UNITED marks have priority over URG’s UNITED REALTY GROUP mark,
as neither URG nor any of its predecessors or affiliates began providing real estate brokerage
services under the UNITED REALTY GROUP mark until after URG obtained its license as a
real estate company on July 18, 2005—after nationwide priority of the ‘683 Registration and the
‘245 Registration was conferred. 5
B. Likelihood of Confusion
The Court considers seven factors in assessing whether or not a likelihood of consumer
confusion exists: (1) the strength of the allegedly infringed mark; (2) the similarity of the
infringed and infringing marks; (3) the similarity of the goods and/or services the marks
represent; (4) the similarity of the parties’ trade channels and customers; (5) the similarity of
advertising media used by the parties; (6) the alleged infringer’s intent in using the infringing
4
For trademark registrations that matured from applications filed before November 16, 1989, constructive
nationwide priority is effective as of the registration date. By contrast, for trademark registrations that
matured from applications filed on or after November 16, 1989, constructive nationwide priority is
effective as of the application filing date. See Trademark Law Revision Act of 1988, Pub. L. 100-667, §
128(b)(1), 102 Stat. 3944.
5
The Court notes that URG did not challenge the priority of either the ‘683 Registration or the ‘245
Registration in its proposed findings of fact and conclusions of law. See ECF No. [149].
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mark; and (7) the existence and extent of actual confusion in the consuming public. Fla. Int’l U.
Bd. of Trustees, 830 F.3d at 1255 (citing Tana v. Dantanna’s, 611 F.3d 767, 774-75 (11th Cir.
2010)). Of these factors, the strength (or type) of mark at issue and the evidence of actual
confusion “are the most important.” Id. These factors, however, do not constitute an exhaustive
list, and courts in this Circuit may consider additional factors where appropriate. See Tana, 611
F.3d at 780.
The Eleventh Circuit has instructed that, in analyzing the above mentioned factors,
special attention might need to be paid to the level of sophistication of the relevant consumer
base. More specifically, courts in this Circuit must recognize that “sophisticated consumers of
complex goods or services . . . are less likely to be confused than casual purchasers of small
items.” Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1256 (quoting Welding Servs., Inc. v. Forman,
509 F.3d 1351, 1361 (11th Cir. 2007)) (alterations omitted); see also Freedom Sav. & Loan
Ass’n v. Way, 757 F.2d 1176, 1185 (11th Cir. 1985) (“The sophistication of a buyer certainly
bears on the possibility that he or she will become confused by similar marks.”); 4 McCarthy on
Trademarks and Unfair Competition [hereinafter “McCarthy”], § 23:101 (4th ed. 2016) (“Where
the relevant buyer class is composed solely of professional or commercial purchasers, it is
reasonable to set a higher standard of care than exists for consumers. Where the relevant buyer
class is composed only of professionals or commercial buyers familiar with the field, they are
usually knowledgeable enough to be less likely to be confused by trademarks that are similar.
Such professional buyers are less likely to be confused than the ordinary consumer.”). For
example, in Fla. Int’l U. Bd. of Trustees, the Eleventh Circuit agreed with the district court’s
“recogni[tion] that students looking for a college to attend are likely to be relatively sophisticated
and knowledgeable because of the nature, importance, and size of the investment in a college
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education.” 830 F.3d at 1256. In finding reasonable the district court’s conclusion that a Florida
university’s adoption of a new name and acronym did not and would not likely cause consumer
confusion with another Florida university’s name and acronym, the Eleventh Circuit emphasized
that the “burden of establishing a likelihood of confusion was higher than usual . . . because, we
repeat, potential college students are relatively sophisticated consumers who are unlikely to be
easily or meaningfully confused by similar-sounding university names.” Id. at 1265.
The heightened standard applied in Fla. Int’l U. Bd. of Trustees is likewise applicable in
this case.
The relevant consumer base here—i.e., real estate agents—is at the very least
relatively sophisticated. 6 This is so because, as demonstrated at trial, real estate agents are
educated, licensed professionals. An individual who aspires to become a licensed real estate
agent in Florida must complete 60 hours of training for a pre-license class, pass a license
examination, and then pass a state-sponsored examination. After becoming licensed by the
Florida DBPR, a real estate agent must continue to participate in a certain number of educational
courses every two years. Moreover, not unlike potential college students—whose important
decision to invest in a college education speaks to their level of sophistication and knowledge,
see Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1256—real estate agents who might be exposed to,
or otherwise seek out, the recruitment efforts of a particular real estate brokerage company face
an important decision. They must consider for whom it is that they will work for or represent,
and essentially the means by which they will make a living. The “nature, importance, and size”
6
To be sure, United Country has based the theory of its case solely on real estate agents—not real estate
brokers and not potential buyers, sellers, or renters of property. See, e.g., ECF No. [150] at 6-7
(“Defendant offers directly competing real estate brokerage services with United Real Estate . . . to an
overlapping consumer base. Namely, the core consumer for Defendant and United Real Estate are agents
who enjoy a 100% commission and flat transaction fee model.) (emphasis added); see also id. at 35
(“Defendant argues there is no overlap because it alleges United [Country] only targets prospective
brokers (as prospective franchisees), and that Defendant only targets prospective agents. However, . . .
while [United Country] does recruit brokers to set up franchises under the UNITED® Marks, those broker
owners then in turn recruit agents under their particular United franchise.”) (emphasis in original).
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of such a decision also bears on the sophistication and knowledge of the relevant real estate agent
consumer base in this case. Id.
Another related consideration bears mention. A real estate agent who is targeted by the
recruitment efforts of a real estate brokerage company is not like the typical buyer or purchaser
seen in the ordinary trademark case. Similarly, his or her decision to either join a particular real
estate brokerage company or not is not like the typical transaction seen in the ordinary trademark
case. To put it simply, recruited real estate agents do not necessarily buy anything. Rather,
down to its simplest form, the transaction contemplated in this case is really an employment
decision.
Accordingly, in analyzing the relevant likelihood of confusion in this case, the Court will
remain “mindful” of both the sophistication of real estate agents generally and the precise nature
of the employment transaction underpinning United Country’s claims against URG. Id.
i.
Strength of the UNITED Mark
The first factor to consider is the allegedly infringed mark's strength, which is “the
second most important factor in the seven-factor balancing test. The stronger the mark, the
greater the scope of protection accorded it[;] the weaker the mark, the less protection it receives.”
Id. at 1256 (citations and internal quotation marks omitted) (alteration in original). Assessment
of the strength of a mark is to be done in two ways. For the first step, the factfinder should
classify the mark as “generic,” “descriptive,” “suggestive,” or “arbitrary” based on the
relationship between the mark and the service or good it describes. Id. Generic marks are the
weakest of the four categories, and they refer to a class of which an individual product is a
member (“for example, ‘liquor store’ used in connection with the sale of liquor”). Id. Generic
marks are not entitled to protection. Id. Descriptive marks describe a characteristic or quality of
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an article or service (“for example, ‘vision center’ denoting a place where glasses are sold”). Id.
Suggestive marks “subtly connote something about the service so that a customer could use his
or her imagination and determine the nature of the service” (“such as ‘penguin’ being applied to
refrigerators”). Freedom Sav. & Loan, 757 F.2d at 1182 n. 5; Fla. Int’l U. Bd. of Trustees, 830
F.3d at 1256. Finally, arbitrary marks are the strongest of the four categories, and they bear no
relationship to the product (“e.g., ‘Sun Bank’ is arbitrary when applied to banking services”).
Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1256-57. Then, after categorizing the nature of the
mark, for the second step the factfinder considers “the degree to which third parties make use of
the mark.” Id. at 1257 (quoting Frehling Enters., 192 F.3d at 1336). “The less that third parties
use the mark, the stronger it is, and the more protection it deserves.” Id. (quoting Frehling
Enters., 192 F.3d at 1336).
Further, a mark’s strength is enhanced if it has “incontestable” status, which means that
the mark has been registered for five years with the PTO, its holder has filed an affidavit as
required by 15 U.S.C. § 1065(3) with the PTO, and the PTO has accordingly declared the mark
“incontestable.”
Id.
“An incontestable mark is presumed to be at least descriptive with
secondary meaning, and therefore a relatively strong mark.” Id. (quoting Sovereign Military
Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Fla. Priory of the Knights
Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, The
Ecumenical Order, 809 F.3d 1171, 1183 (11th Cir. 2015)). This presumption may of course be
rebutted by evidence of extensive third-party use of the mark. See Southern Grouts & Mortars,
Inc. v. 3M Co., 2008 WL 4346798, at *16-17 (S.D. Fla. Sept. 17, 2008); Carnival Corp. v.
SeaEscape Casino Cruises, Inc., 74 F. Supp. 2d 1261, 1265-66 (S.D. Fla. 1999); Michael Caruso
and Co., Inc. v. Estefan Enters., Inc., 994 F. Supp. 1454, 1459-60 (S.D. Fla. 1998); Armstrong
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Cork Co. v. World Carpets, Inc., 597 F.2d 496, 505 (5th Cir. 1979). Here, the parties have
stipulated that the UNITED marks have incontestable status. See ECF No. [125] at 6.
Because the UNITED marks are incontestable, they are presumed to be at least
descriptive and relatively strong. See Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1257. Moreover,
from a conceptual perspective, because the word “United” bears no apparent relationship to real
estate brokerage services, the UNITED marks are properly categorized as arbitrary; indeed, Dr.
Hoyer—URG’s own expert witness—testified that the word “United” does not describe real
estate services. See ECF No. [148] at 24-25; see also, e.g., Sun Banks of Fla, Inc. v. Sun Fed.
Savs. and Loan Ass’n, 651 F.2d 311 (5th Cir. 1981) (categorizing “Sun Bank” as an arbitrary or
fanciful mark when applied to banking services). Defendant URG nevertheless argues that the
strength of the UNITED marks is diluted because (1) from a conceptual perspective, the use of
the marks by United Country and its affiliates is geographically descriptive and the word
“United” is a general and widely used term, and (2) from a commercial perspective, the field is
crowded with similar real estate businesses located in Florida that use the word “United” in their
company name. See ECF No. [149] at 29-32. The Court agrees with the latter argument.
With respect to the former, the Court disagrees with URG that the word “United” as used
by United Country and its affiliates is geographically descriptive. See generally Miller’s Ale
House, Inc. v. Boynton Carolina Ale House, LLC, 2009 WL 6812111, at *8 (S.D. Fla. Oct. 13,
2009) (explaining that geographically descriptive marks are “considered among the weakest
marks and entitled to only a minimal level of protection”). Defendant URG asserts that “[t]he
word United geographically describes a place, such as the United States, United Arab Emirates,
and United Kingdom.” ECF No. [149] at 29 (citing Miller’s Ale House, 2009 WL 6812111, at
*8; HBP, Inc. v. Am. Marine Holdings, Inc., 290 F. Supp. 2d 1320, 1329 (M.D. Fla. 2003), aff'd
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sub nom. HBP, Inc. v. Am. Marine Holdings, 129 F. App'x 601 (11th Cir. 2005)). But in this
case, URG offers no support for the suggestion that United Country’s relevant use of the
UNITED marks has such a geographic nature. To the contrary, the UNITED REAL ESTATE
mark used by United Real Estate has no geographic connotation to it whatsoever. 7 Cf. Miller,
2009 WL 6812111, at *8 (recognizing “Boynton” in the mark “Boynton Ale House” as a “local
geographic identifier”); HBP, 290 F. Supp. 2d at 1329 (“The geographic origin and resulting
widespread third-party use of ‘Daytona’ weighs against the strength of HBP’s marks.”). With
respect to URG’s contention that “United” is an otherwise generic and widely used term—indeed
it is—the Eleventh Circuit has instructed that “the strength of a mark does not turn on its
component words in a vacuum, but instead ‘the relationship between the name and the service or
good it describes.’” Sovereign Military, 809 F.3d at 1186 (quoting Frehling Enters., 192 F.3d at
1335) (emphasis in original). “For example, ‘apple’ is a common word, but it is a strong mark
when used in connection with personal computers. And ‘sun’ is a common word, but it is a
strong mark when used in connection with banking.” Id. (citing 2 McCarthy § 11:11; Frehling
Enters., 192 F.3d at 1335) (internal citation omitted). Looking at the relevant relationship
between name and service in this case, URG has not convinced the Court that the word “United”
is not conceptually a strong mark when used in connection with real estate brokerage services.
That said, URG has successfully shown that the UNITED marks have diminished
commercial strength. Specifically, Defendant URG identified 45 licensed real estate businesses
in Florida that use the word “United” in their company name—examples of which include First
United Realty, Inc., Florida United Realty Corp., and United Realty Services, Inc. Relatively
7
United Real Estate is the only entity affiliated with United Country that, like URG, offers real estate
brokerage services in connection with urban, residential properties in Florida. For that reason, the Court
considers United Country’s claims with an attention only to United Real Estate’s use of the UNITED
marks, rather than United Country’s own direct use of the marks.
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speaking, 45 is a high number of third-party users. See AmBrit, Inc. v. Kraft, Inc., 812 F.2d
1531, 1539 (11th Cir. 1986) (affording lesser protection where 8 third party users in the same
market employed similar trade dress); El Chico, Inc. v. El Chico Café, 214 F.2d 721, 725 (5th
Cir. 1954) (finding 27 instances of third party use of “Chico,” “El Chico,” and similar names
“for various products and articles” was sufficient to classify “El Chico” mark as weak); Homes
& Land Affiliates, LLC v. Homes & Loans Magazine, LLC, 598 F. Supp. 2d 1248, 1261 (M.D.
Fla. 2009) (finding “widespread third-party use” based on 18 instances); see also Fla. Int’l U.
Bd. of Trustees, 830 F.3d at 1257-58 (finding that “[12] third-party uses can be sufficient to
diminish the distinctiveness of a mark” after clarifying that “there is no hard-and-fast rule
establishing a single number that suffices to weaken a mark” and so a court must consider “the
entire name a third party uses, as well as the kind of business in which the user is engaged”)
(citation omitted). Naturally, then, in confronting URG’s evidence of third-party use, United
Country does not focus on the total number of third-party users, but instead argues that URG’s
evidence of third-party use warrants minimal if any weight because URG presented no evidence
as to the extent of the use of the identified third parties’ respective marks. See ECF No. [150] at
24-29. By contrast, United Country points to its “evidence regarding the amount of time, money,
and efforts it expends in marketing, promoting, and advertising . . . under the UNITED® marks.”
Id. at 24.
As mentioned, from a financial perspective, United Country’s marketing efforts has cost
it between $6 million and $10 million annually over the previous nine years. 8 Interestingly,
those figures dwarf URG’s marketing costs, which, annually, have consisted primarily of its
recruiting director’s salary. United Country’s reliance on its substantial marketing costs is not
8
The Court notes, however, that the share of those costs specifically with respect to United Real Estate
was never quantified.
20
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misplaced, especially when viewed in comparison to URG’s modest marketing costs by
comparison. As explained by the Eleventh Circuit in Fla. Int’l U. Bd. of Trustees:
The practical problem with FIU's argument [as to commercial strength] . . . is that
FIU didn't offer any direct evidence of commercial strength. To be sure, FIU has
spent substantial time, energy, and effort in promoting its mark, and has
continually educated students over the past 50 years under the name FIU. The
parties stipulated that FIU spends approximately $15 million annually on
marketing and community outreach and engagement efforts, including advertising
and promoting its mark through its athletic programs, radio advertisements, its
website, and by publishing FIU Magazine. But, in isolation, evidence of
promotion efforts is not sufficient to establish a mark's commercial strength
because it tells us precious little about the efficacy of those efforts in creating
marketplace recognition of FIU's mark. Absent comparative evidence establishing
that FIU has spent substantially more on advertising than its competitors in the
field of higher education, or “direct evidence of consumer recognition,” 2
McCarthy § 11.83, FIU's promotional efforts do not establish that its mark has
acquired “such distinctiveness that it can function as a significant indication of a
particular” university among others in the same market. John H. Harland [Co. v.
Clarke Checks, Inc., 711 F.2d 966, 974 n.13 (11th Cir. 1983)]. There simply was
not sufficient evidence of commercial strength in the record to require the district
court to ignore the substantial third-party usage.
830 F.3d at 1259 (emphasis in original). Here, where United Country has presented “no direct
evidence of consumer recognition, such as by survey[,]” id. (quoting 2 McCarthy § 11.83), it is
significant that United Country has presented “comparative evidence” with respect to its
marketing costs. Aside from URG, United Country points out that the 45 other real estate
businesses in Florida with “United” in their name all have a relatively small number of active
agents—e.g., less than 26—which in turn United Country views as lending “the inference that
those third parties are not very active.” ECF No. [150] at 28. Although the Court does not
necessarily adopt the inference that these smaller businesses are “not very active,” the Court is
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willing to accept the inference that these businesses do not spend nearly the amount of money on
marketing that United Country does with respect to the UNITED marks. 9
Nevertheless, the Court will not, as United Country urges it to, completely ignore the
third-party usage in this case. See Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1259. For one,
United Country’s comparative evidence of marketing costs must be qualified in at least one
respect—namely, the evidence at trial reflected that, in Florida’s real estate brokerage field, word
of mouth can also serve as an effective avenue of recruitment (URG being a prime example).
Further, and more importantly, that these other businesses might be smaller in size than United
Country or URG—even substantially so—does not necessarily render their usage of the word
“United” in Florida’s real estate brokerage field inconsequential. This is especially so given the
total number of third party users identified, that they are scattered throughout the state of Florida,
and that there is evidence reflecting the active nature of many of them (such as websites, real
estate listings, and operational office spaces). At least to some extent, then, these third party
users have had some crowding effect on the field. See, e.g., Century 21 Real Estate LLC v.
Century Ins. Grp., 2007 WL 484555, at *6 (D. Ariz. Feb. 8, 2007), aff'd sub nom. Century 21
Real Estate LLC v. Century Sur. Co., 300 F. App'x 527 (9th Cir. 2008) (“Based on undisputed
evidence showing substantial use of the term ‘Century’ in the real estate and insurance
industries, the Court found no reasonable jury could conclude that the public would expect all
companies with ‘Century’ in their names to be related to C21 [(Century 21)], or that all services
using the name ‘Century’ emanate from a single source.”).
9
Without speculating as to the strength of the correlation, the Court simply observes that URG, as an
example, employs an overwhelmingly larger number of real estate agents than do the identified thirdparty users and spends far less on marketing than does United Country.
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On balance, though it is certainly a close call, the Court finds the UNITED marks to be
relatively weak given the crowded field they occupy. The Court therefore finds that this factor
weighs in favor of URG.
ii.
Similarity of the Marks
Next, the Court must compare the plaintiff’s marks with the defendant’s marks and
measure their similarity. Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1260. “The greater the
similarity, the greater the likelihood of confusion.” Id. The “key question” is “whether the
marks are sufficiently similar ‘to deceive the public.’” Id. (quoting Saxlehner v. Eisner &
Mendelson Co., 179 U.S. 19, 33 (1900)). Rather than simply comparing isolated features, the
Court must consider the “overall impression created by the marks” by comparing “the
appearance, sound and meaning of the marks, as well as the manner in which the marks are
used.” Id. (quoting John H. Harland, 711 F.2d at 975). “If a trademark operates in a crowded
field of ‘similar marks on similar goods or services,’ slight differences in names may be
meaningful because consumers ‘will not likely be confused between any two of the crowd and
may have learned to carefully pick out one from the other.’” Id. (quoting 2 McCarthy § 11:85).
Previously, the Court denied a motion for summary judgment filed by URG, and in doing
so, observed that with respect to the similarity of the marks factor, “the parties [did] not seem to
agree upon which marks are being infringed.” ECF No. [90] at 12. Defendant URG focused
primarily upon a comparison of the parties’ logo marks, arguing that the differences in the
wording and graphic designs weighed against a likelihood of confusion. See id. at 11-12.
Throughout trial and following its conclusion, URG’s focus has remained on the parties’ logo
marks and their purported dissimilarities. See ECF No. [149] at 32-33. The problem with this
focus is that United Country’s claims are based on potential confusion caused by URG’s
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Case No. 16-cv-60154-BLOOM/Valle
UNITED REALTY GROUP mark as it is used in logo or textual form. 10 United Country’s
position is best captured by the following statement: “[G]iven that UNITED is the dominant
element of Defendant’s mark when viewed in any form, consumers are likely to identify
UNITED as the salient portion of Defendant’s mark and thus mistakenly believe that Defendant
is in some way affiliated with United [Country].” ECF No. [150] at 33 (emphasis added).
Interestingly, however, in simply asserting “a likelihood of confusion between its use of
the UNITED[] [m]arks and Defendant’s use of UNITED REALTY GROUP[,]” ECF No. [150]
at 30 (emphasis added), United Country has not identified which of its (or its affiliates’) specific
use or uses of the UNITED marks are likely to be confused when viewed in comparison to
URG’s mark. United Country has not clarified, for example, whether it believes that URG’s
mark is confusingly similar to UNITED as used in UNITED COUNTRY REAL ESTATE or to
UNITED as used in UNITED REAL ESTATE (or both). United Country’s broad focus on its
“use” of the standalone UNITED mark is problematic, because the relevant context for assessing
the similarity of the marks factor is precisely how the marks are encountered by consumers in the
marketplace. See Zaletel v. Prisma Labs, Inc., 2017 WL 877302, at *4 (D. Del. Mar. 6, 2017)
(“Because the test is likelihood of confusion by consumers in the marketplace, the degree of
similarity of the marks is assessed by looking at the marks as encountered by consumers in the
marketplace.”); Isle of Capri Casinos, Inc. v. Flynt, 2016 WL 6495380, at *5 (C.D. Cal. Nov. 1,
2016) (“To address the similarity of the marks, a court considers the “sight, sound, and meaning”
of the marks, taking into consideration how the marks are encountered in the marketplace.”); You
10
United Country owns registrations for UNITED in “standard characters,” meaning that United Country
is entitled to federal trademark protection for “all depictions” of the marks, “regardless of the font style,
size, or color, and not merely ‘reasonable manners’ of depicting” the marks. Trademark Manual of
Examining Procedure § 1207.01(c)(iii); see also Cunningham v. Laser Golf Corp., 222 F.3d 943, 950
(Fed. Cir. 2000) (explaining that protection for standard character registrations—formerly referred to as
“typed” marks—extends to all depictions of the mark and is “not limited to the mark as it is used in
commerce”).
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Fit, Inc. v. Pleasanton Fitness, LLC, 2013 WL 521784, at *5 (M.D. Fla. Feb. 11, 2013) (“In
deciding similarity, the court must ‘not look just at the typewritten and aural similarity of the
marks, but how they are presented in the marketplace.’”) (quoting The Sports Authority, Inc. v.
Prime Hospitality Corp., 89 F.3d 955, 962 (2d Cir. 1996)). As was made clear at trial, the
relevant marketplace in this case consists of real estate agents in Florida looking (or recruited) to
join a real estate brokerage company that provides services in connection with urban, residential
properties in Florida. It is the use of the UNITED marks in this marketplace that matters. And,
as discussed, that use is done by United Real Estate. 11
As such, the Court compares the
similarity between the UNITED REAL ESTATE mark and the UNITED REALTY GROUP
mark—including both the logo and textual forms of the respective marks.
Turning first to the relevant logs, the main similarity is the shared use of the word
“United” in both:
Also, the subsequent descriptors in the marks—i.e., “Real Estate” and “Realty Group”—both
appear below the word “United.” But there are obvious differences as well. In United Real
Estate’s mark, the word “United” is not in all caps, whereas in URG’s mark it is. The United
Real Estate mark is in all blue text, whereas the URG mark displays three different colors.
11
Conversely, United Country does not offer real estate brokerage services in connection with urban,
residential properties in Florida. Additionally, the Court notes that United Country did not suggest, let
alone present evidence, that United Real Estate franchises in Florida recruit prospective real estate agents
using the standalone UNITED mark without reference to the UNITED REAL ESTATE mark, and so the
Court’s comparative analysis will be limited to the UNITED mark as it is specifically used in UNITED
REAL ESTATE.
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Finally, the United Real Estate mark displays two curved lines or arches underneath the word
“United” that are not connected, whereas the URG mark displays an overarching, incomplete
ellipse. In light of these differences, the Court finds that the mere incorporation of the word
“United” in URG’s logo does not render it sufficiently similar to United Real Estate’s logo to
support finding a likelihood of confusion. See, e.g., World Triathlon, 2007 WL 2875456, at *5
(“The mere fact that both marks incorporate a form of the common term ‘Ironman’ does not
render the marks sufficiently similar to establish likelihood of confusion.”); Freedom Sav. &
Loan, 757 F.2d at 1183 (holding “Freedom Realty” and “Freedom Savings and Loan” are not
sufficiently similar); Sun Banks, 651 F.2d at 316 (“Sun Federal and Savings Loan Association”
not confusingly similar to “Sun Banks”); Amstar Corp. v. Domino's Pizza, Inc., 615 F.2d 252,
260 (5th Cir.1980) (“Domino's Pizza” not similar to “Domino sugar”), cert. denied, 449 U.S. 899
(1980); Bell Laboratories, Inc. v. Colonial Prods., Inc., 644 F. Supp. 542, 547 (S.D. Fla. 1986)
(“Final flip” and “Flip” marks for same product are “ultimately different and different
sounding”); In re Hearst Corp., 982 F.2d 493, 494 (Fed. Cir. 1992) (“Varga girl” and “Vargas”
are “sufficiently different in sound, appearance, connotation, and commercial impression, to
negate likelihood of confusion”); Mr. Hero Sandwich Sys., Inc. v. Roman Meal Co., 781 F.2d
884, 888 (Fed. Cir. 1986) (“Romanburger” and “Roman” marks for food products “are not
similar in appearance”); Little Caesar Enterprises v. Pizza Caesar, Inc., 834 F.2d 568, 571
(“Pizza Caesar U.S.A.” not similar to “Little Caesar's”); Conde Nast Pubs., Inc. v. Miss. Quality,
Inc., 507 F.2d 1404, 1407 (CCPA 1975) (“Country Vogues” and “Vogue” publications “do not
look or sound alike”); Pacquin-Lester Co. v. Charmaceuticals, Inc., 484 F.2d 1384 (CCPA 1973)
(“Silk ‘n’ Satin” beauty and bath lotion and oil not similar to “Silk” face cream).
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Case No. 16-cv-60154-BLOOM/Valle
The same cannot be said when comparing the word marks UNITED REAL ESTATE and
UNITED REALTY GROUP.
Considering the overall impression created, both marks are
obviously similar in sound and appearance. In both marks, the word “United” appears first and
is followed by either “Real Estate” or “Realty,” which are essentially synonymous terms;
“realty” is defined by Merriam-Webster as “real estate.” 12 The only meaningful difference
between the marks, then, is that the URG mark contains the word “Group.” But even Dr. Hoyer
testified that the word “Group” is a descriptive term when used in connection with URG’s
services and would not help consumers distinguish between the marks. See also In re Chatam
Int’l Inc., 380 F.3d 1340, 1342-43 (Fed. Cir. 2004) (noting that descriptive or generic aspects of
a mark are given less weight when comparing marks); In re The Paint Prods. Co., 8 USPQ 2d
1863, *2 (T.T.A.B. 1998) (when entity designations such as “company” describe an applicant’s
business type, they do not function as a source identifier and must be disclaimed). Importantly,
this similarity in sound and appearance with the UNITED REAL ESTATE word mark also
applies to URG’s logo. See In re Viterra Inc., 671 F.3d 1358, 1366 (Fed. Cir. 2012) (recognizing
that even in a “composite mark comprising a design and words, the verbal portion of the mark is
the one most likely to indicate the origin of the goods to which it is affixed,” as the “literal
component of brand names likely will appear alone when used in text and will be spoken when
requested by consumers.”). In other words, whether potential consumers are exposed to the
URG logo or the UNITED REALTY GROUP word mark, similarity to the UNITED REAL
ESTATE word mark—whether as read or spoken—is implicated. This is especially so given that
12
The Court also notes that the PTO rejected a third party application for the UNITED REALTY GROUP
mark in connection with real estate brokerage services based on a likelihood of confusion. See generally
Brewing Co. v. Philip Morris Inc., 297 F. Supp. 1330, 1337 (N.D. Ga. 1968) (“While the various Patent
Office decisions referred to are not binding upon this court, they are certainly entitled to the most
respectful consideration because of the Patent Office's day-to-day expertise in adjudicating cases wherein
the ultimate question decided is the question of ‘likelihood of confusion’ as that term is employed in
various parts of the Lanham Act.”).
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URG, by its own admission, achieves most of its recruitment by word of mouth. Thus, although
the Court does not find that the relevant logos themselves are meaningfully similar, the Court
does find sufficient similarity between the URG mark—whether in logo or textual form—and the
UNITED REAL ESTATE word mark so as to weigh this factor in favor of United Country.
iii.
Similarity of the Services
The third factor looks at whether the parties’ services “are the kind that the public
attributes to a single source.” Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1261 (quoting Frehling
Enters., 192 F.3d at 1338).
The proper test is not whether the services can be readily
distinguished, but rather whether the services “are so related in the minds of consumers that they
get the sense that a single producer is likely to” offer both services. Frehling Enters., 192 F.3d at
1338. The focus is on “the reasonable belief of the average consumer as to what the likely
source of the goods [is].” Id.
United Country argues that this factor weighs in its favor because both it and URG offer
real estate brokerage services. See ECF No. [150] at 34-35. Defendant URG counters that “such
a broad-brush description does not satisfy the ‘similar services’ factor . . . .” ECF No. [149] at
33. Rather, according to URG, the real estate services in this case are different: “Plaintiff and
United Real Estate sell franchises to real estate brokers. United Realty Group, on the other hand,
only recruits real estate agents, it does not recruit brokers or sell franchises.” Id. at 34. The
glaring deficiency in URG’s argument is that it completely ignores the undisputed fact that, in
addition to recruiting brokers as potential franchisees, United Real Estate also recruits real estate
agents to join its franchises. Thus, while none of the services offered by URG are franchiserelated, the recruitment of agents by both URG and United Real Estate undoubtedly constitutes a
significant overlap in services. As mentioned above, the relevant question is whether the parties’
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services “are so related in the minds of consumers that they get the sense that a single producer is
likely to” offer both services. Frehling Enters., 192 F.3d at 1338. The Court finds that to be the
case here, and therefore finds this factor to weigh in favor of United Country. See, e.g., Fla. Int'l
Univ. Bd. of Trustees v. Fla. Nat. Univ., Inc., 91 F. Supp. 3d 1265, 1278 (S.D. Fla. 2015) (“It is
clear to the Court that a significant portion of FNU’s student population is receiving a wholly
different kind of education than that offered by FIU. However, it is also clear that FNU offers
several degree programs that overlap with those offered by FIU. . . . [T]he Court finds that,
despite the obvious differences in the educational models offered by the two parties, a reasonable
consumer could conclude that the services provided by FIU and FNU are attributable to a single
source.”), aff'd sub nom. Fla. Int'l Univ. Bd. of Trustees, 830 F.3d 1242.
iv.
Similarity of the Channels of Trade and Customers
“The fourth factor takes into consideration where, how, and to whom the parties' products
are sold.”
Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1261. “Dissimilarities between the retail
outlets for and the predominant customers of plaintiff's and defendant's goods [or services] lessen
the possibility of confusion, mistake or deception.” Frehling, 192 F.3d at 1339 (quoting Amstar,
615 F.2d at 262). While “the parties' outlets and customer bases need not be identical, some
degree of overlap should be present” to weigh in favor of a likelihood of confusion. Frehling,
192 F.3d at 1339.
Similar to the similarity of services factor, United Country’s argument that the fourth
factor weighs in its favor is based on prospective real estate agents: “Both parties solicit agents
by email advertisements and websites with information targeted at agents. . . . [There is]
significant overlap in the relevant consumers between United Real Estate and Defendant for the
services offered under the respective marks, and accordingly this factor weights in favor of
29
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United [Country].” ECF No. [150] at 35-36. Defendant URG likewise points exclusively to the
parties’ respective consumer bases in arguing that this factor does not support finding a
likelihood of confusion: “United Realty Group and Plaintiff serve completely different real estate
consumers. Plaintiff targets franchisees who are broker owners, while Plaintiff [sic] only
employs real estate associates under its own brokerage license.” ECF No. [149] at 34. The
Court is in agreement with United Country on this factor.
Both United Real Estate and URG target agents. And while United Real Estate also
recruits brokers as potential franchisees, United Real Estate only had four franchises in Florida at
the time of trial. United Country has demonstrated that United Real Estate is an “agent-centric
business[,]” whereby agents far outnumber broker-franchisees and generate substantial revenue.
ECF No. [150] at 35. As an example, Dan Duffy, the CEO of United Real Estate Holdings, LLC
(which owns and operates United Country and United Real Estate), testified that when Ms. Diaz
de Villegas first joined United Real Estate as a broker-franchisee, she employed more than 150
agents. See ECF No. [145] at 285-86. As such, for both United Real Estate and URG, it is the
case that agents constitute the predominant consumer. Cf. Fla. Int'l Univ. Bd. of Trustees, 91 F.
Supp. 3d at 1279 (“Because it is clear that the vast majority of customers of FNU’s services are
highly dissimilar from FIU’s customer base, the possibility of mistake or confusion is lessened in
this case.”); Amstar, 615 F.2d at 262 (finding that the likelihood of confusion is dampened where
there are “substantial dissimilarities between the predominant purchasers of plaintiff's and
defendant's products”). Finally, the Court notes the considerable similarity between the channels
of trade used by United Real Estate and URG. As United Country points out, both companies
utilize email advertisements and websites targeted specifically at prospective agents. For these
reasons, the Court finds that this factor weighs in favor of United Country.
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v.
Similarity of Advertising Media
The fifth factor requires a comparison of “the parties’ advertisements and the audiences
they reach.” Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1262. “The greater the similarity, the
greater the likelihood of confusion.” Id. (quoting Sovereign Military, 809 F.3d at 1188). Identity
of advertising methods is not required; rather, “the standard is whether there is likely to be
significant enough overlap in the [audience of the advertisements] that a possibility of confusion
could result.” Id. (quoting Frehling Enters., 192 F.3d at 1340) (alteration in original).
The Court finds that there is significant enough overlap in the audience of some forms of
United Real Estate’s and URG’s respective advertisements that a possibility of confusion could
result, but with one caveat. Both United Real Estate and URG have advertised in the same real
estate publication, and both parties send email advertisements to licensed agents based on lists
provided by third party vendors. See, e.g., Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1263
(agreeing with the district court’s finding that the parties’ advertising on the same radio station
served as “sufficient to create some likelihood that the same consumers would be exposed to
both schools’ marks”).
Importantly, with respect to the latter, the Court notes that both
companies’ email advertisements tout a 100% commission model.
However, there is one
substantial difference between the advertising methods of United Real Estate and URG: the bulk
of URG’s agency referrals are effectuated through word of mouth—particularly by current URG
agents. United Country did not present any evidence that United Real Estate similarly relies on
agency referrals through word of mouth by current agents. The difference is by no means
insignificant, as URG currently employs approximately 2,000 agents. In the Court’s view, this
difference tends to reduce the overall likelihood of confusion. Presumably, current agents of
URG are not confused as to what companies URG may or may not be affiliated with, and so any
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word of mouth done by them on URG’s behalf is unlikely to carry with it such confusion—
especially given the level of sophistication of real estate agents generally. See, e.g., Kensington
Partners v. Cordillera Ranch, Ltd., 1998 WL 1782540, at *8 (W.D. Tex. June 16, 1998) (“Also,
Mr. Engle testified that word of mouth advertising is considered to be Kensington's most
important category of marketing for Cordillera. It is highly unlikely that word of mouth
advertising would create any confusion.”). On balance, the Court finds this factor to weigh in
favor of United Country, though only slightly so, given that a critical form of URG’s
advertising—which appears unmatched by United Real Estate—carries no risk of confusion.
vi.
United Realty Group’s Intent
The sixth factor looks at the defendant’s intent in adopting its mark. “If it can be shown
that a defendant adopted a plaintiff's mark with the intention of deriving a benefit from the
plaintiff's business reputation, this fact alone may be enough to justify the inference that there is
confusing similarity.” Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1263 (quoting Frehling Enters.,
192 F.3d at 1340). United Country concedes that although URG began using its UNITED
REALTY GROUP mark in connection with real estate brokerage services in 2005, it was
unaware of United Country or any of its affiliates until July of 2014, when it received the initial
cease and desist letter. See ECF No. [150] at 37. As such, there is no evidence in the record that
URG adopted its mark in order to capitalize on the reputation of United Country or any of its
affiliates, and this factor therefore weighs in favor of URG.
vii.
Actual Confusion
Finally, as mentioned, evidence of actual confusion by actual or potential consumers—
though not necessary to find a likelihood of confusion—is the best evidence of a likelihood of
confusion. Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1264. “[T]he quantum of evidence needed
32
Case No. 16-cv-60154-BLOOM/Valle
to show actual confusion is relatively small.” Id. (quoting Caliber Auto. Liquidators, Inc. v.
Premier Chrysler, Jeep, Dodge, LLC, 605 F.3d 931, 937 (11th Cir. 2010)) (alteration in original).
That said, “a sole, de minimis instance of consumer confusion is not enough to militate in favor
of [] finding a likelihood of confusion.” Fla. Int'l Univ. Bd. of Trustees, 91 F. Supp. 3d at 1283.
“In assessing the weight of evidence of actual confusion, we must consider who was confused
and how they were confused: ‘Short-lived confusion or confusion of individuals casually
acquainted with a business is worthy of little weight, ... while confusion of actual customers of a
business is worthy of substantial weight.’” Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1264
(quoting Safeway Stores, Inc. v. Safeway Discount Drugs, Inc., 675 F.2d 1160, 1167 (11th Cir.
1982)) (emphasis in original).
United Country presented evidence of four instances of alleged actual consumer
confusion. The first was testimony from Mr. Giese that while at a national conference he was
approached by Ms. Hansen, a broker and owner of her own real estate brokerage company in
Florida, who expressed to him her belief that United Real Estate was operating in Florida’s real
estate brokerage market before it actually was. The Court finds that this evidence is entitled to
minimal weight. To begin with, the evidence depends on a degree of speculation, as neither Mr.
Giese’s nor Ms. Hansen’s testimony demonstrated that Ms. Hansen ever referred explicitly to a
third party company, let alone URG specifically. Aside from that, and more importantly, Ms.
Hansen was not an actual or potential customer of United Real Estate. Rather, as Mr. Giese
testified, Ms. Hansen was a fellow panel member and speaker at the national conference. 13 See
Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1264; Aronowitz v. Health-Chem Corp., 513 F.3d 1229,
1239-40 (11th Cir. 2008) (“With regard to actual confusion, we have specifically accorded
13
There was no indication that Ms. Hansen was interested in purchasing a United Real Estate franchise or
that United Real Estate made efforts to recruit her as a franchisee or agent.
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Case No. 16-cv-60154-BLOOM/Valle
‘substantial weight’ to evidence that actual customers were confused by the use of a mark as
opposed to other categories of people.”).
The second instance of claimed confusion was a form submitted through one of United
Real Estate’s websites in which a real estate agent, Mr. Hyslop, expressed his interest in joining
United Real Estate “as an agent” after seeing “United Realty’s adverts and attractive commission
schedule.” Pl. Exh. 51 (emphasis added). Of course, at the time Mr. Hyslop submitted the
online form, United Real Estate had yet to open any offices in Florida or begin to advertise its
commission model to prospective agents. The Court finds that Mr. Hyslop’s online form is
entitled to considerable weight, as it specifically references a third party company named
“United Realty” and Mr. Hyslop was himself a potential customer of United Real Estate who
was actively seeking with it an agency relationship. See Fla. Int’l U. Bd. of Trustees, 830 F.3d at
1264 (acknowledging that a high school student who sent an email to Florida National University
inquiring about Florida International University was as “an actual prospective student who was
actively looking at potential college options” and therefore “undoubtedly” served as “an ‘actual
consumer’ for purposes of the likelihood of confusion analysis”).
The third instance of claimed confusion involved Ms. Diaz de Villegas, who forwarded a
marketing email she received from URG that advertised URG’s 100% commission model. A
little over two years after receiving the email, while Ms. Diaz de Villegas was negotiating with
United Real Estate for the purchase of a franchise in Florida, Ms. Diaz de Villegas forwarded the
email to United Real Estate. Ms. Diaz de Villegas’ email to United Real Estate literally reads:
“I’m confused? These people are advertising like crazy ! Is this you?” Pl. Exh. 52. On the
witness stand, Ms. Diaz de Villegas testified that she was confused as to whether United Real
Estate and URG were affiliated based on the contents of URG’s marketing email. The Court
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Case No. 16-cv-60154-BLOOM/Valle
finds that Ms. Diaz de Villegas’ email to United Real Estate is entitled to some weight given that
it expresses confusion between United Real Estate and URG by a potential—and later, an
actual—customer of United Real Estate who was actively seeking to purchase a franchise. 14 See
Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1264. Of course, Ms. Diaz de Villegas’ initial
confusion was resolved soon after she forwarded the URG marketing email to United Real Estate
through her subsequent negotiation talks with Mr. Pedrero, and Ms. Diaz de Villegas ultimately
purchased a United Real Estate franchise. Relatedly, Ms. Diaz de Villegas, as a prospective and
eventual franchisee, was not the kind of potential consumer contemplated in this case. As United
Country aptly describes, “the core consumer for Defendant and United Real Estate are agents
who enjoy a 100% commission and flat transaction fee model.” ECF No. [150] at 6-7 (emphasis
added). The Court finds these points also worthy of consideration. 15
Finally, the fourth instance of claimed confusion was a report Mr. Pedrero received from
United Real Estate’s sales director in south Florida in early 2016—merely days before this
lawsuit was filed—wherein the sales director expressed his perception that certain prospective
franchisees he had been in contact with were confused between United Real Estate and “the
locally based real estate company with a similar name.” See Pl. Exh. 53. For example, the sales
director stated to Mr. Pedrero that he “sense[s]” a prospective franchisee “may think that he is
speaking with Florida based URE.” Id. The Court declines to credit this report as it directly
14
Defendant URG attempted to impeach Ms. Diaz de Villegas by pointing out, inter alia, that United
Real Estate waived for Ms. Diaz de Villegas a substantial amount of initial franchise fees and that Ms.
Diaz de Villegas was required by one of her franchise agreements to cooperate with United Real Estate in
any litigation in which it becomes involved. See also ECF No. [149] at 38. The Court was not
persuaded. Ms. Diaz de Villegas forwarded to United Real Estate the URG marketing email before
actually purchasing a franchise or entering into any agreement with United Real Estate, and the Court
otherwise found her testimony at trial to be credible.
15
To illustrate the point further, a prospective United Real Estate franchisee, no matter how confused as
to United Real Estate and URG, could never actually purchase a franchise from URG under the mistaken
belief that URG is, or is affiliated with, United Real Estate. This is because URG does not sell franchises
nor does it recruit brokers.
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reflects the perception of the sales director, who did not testify at trial. See Fla. Int’l U. Bd. of
Trustees, 830 F.3d at 1264-65 (“FIU also provided hearsay testimony from its Rule 30(b)(6)
designee that some of its employees were ‘confused’ by FNU’s new name. . . . The [district]
court did not credit FIU’s hearsay evidence regarding employee confusion . . . . [T]he district
court was well within its right to disregard FIU’s hearsay evidence of confusion among its
employees, which was no more than references by FIU’s Rule 30(b)(6) representative to
ambiguous statements by unidentified employees at some point in the past.”); Holiday Inns, Inc.
v. Holiday Out In Am., 351 F. Supp. 537, 541-42 (S.D. Fla. 1972) (“The brevity of the letters, the
fact that the writers were not called to testify and thus were unavailable for cross-examination,
the unsubstantiated legitimacy of the letters, and the absence of evidence which corroborates the
actual confusion they purport to show, all militate against such an interpretation of these letters.
Without more, it is rank speculation to assume that defendants' advertising or defendants' use of
the mark caused the letter writers or unnamed third parties to believe there to be a business
association between plaintiff and defendants.”), aff’d, 481 F.2d 445 (5th Cir. 1973).
In sum, the Court was presented with evidence of two legitimate instances of actual
confusion: (1) a form submitted online by a prospective real estate agent (the “core consumer” in
this case); and (2) an email sent from a prospective franchisee during negotiations that ultimately
led to her becoming an actual franchisee. But for reasons alluded to above, the Court does not
afford these instances equal weight. Mr. Hyslop’s online form is certainly United Country’s best
evidence of actual confusion. Ms. Diaz de Villegas’ email, on the other hand, has more limited
probative value, as she was not a prospective real estate agent. Ms. Diaz de Villegas’ dealings
with United Real Estate as a prospective and eventual franchisee dispelled what ultimately
proved to be “short lived confusion” on her part. Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1264
36
Case No. 16-cv-60154-BLOOM/Valle
(quoting Safeway Stores, 675 F.2d at 1167); see also Vital Pharm., Inc. v. Am. Body Bldg.
Prods., LLC, 511 F. Supp. 2d 1303, 1318 (S.D. Fla. 2007) (“The Eleventh Circuit has not
embraced [the] principle [of initial interest confusion], and I find it unpersuasive. When the
bottom line is sales of a particular product, initial confusion prior to and concluding before the
point of purchase does not seem dispositive in a likelihood of confusion analysis.”); Suntree
Techs., Inc. v. EcoSense Int’l, Inc., 802 F. Supp. 2d 1273, 1283 (M.D. Fla. 2011) (“Suntree
alleges initial interest confusion, which is not actionable confusion in the Eleventh Circuit.”).
Moreover, the nature of the franchise transaction that followed “requires that the purchasers of
the services … be sophisticated consumers.” See Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1265
(discounting the probative value of a letter purporting to show actual confusion as to an
affiliation of two universities based in part on “the nature of the [universities’] business”).
Overall, viewed in totality, the Court finds these instances of confusion insufficient to
weigh in favor of finding a likelihood of confusion. Mr. Hyslop’s online form, by itself, serves
as “a sole, de minimis instance of consumer confusion [that] is not enough to militate in favor of
[] finding a likelihood of confusion.” Fla. Int'l Univ. Bd. of Trustees, 91 F. Supp. 3d at 1283; see
also See Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1265 (“[W]ith only a single probative instance
of consumer confusion in the years since FNU’s name change, the district court reasonably
decided that this factor did not weigh in favor of a likelihood of confusion.”). And Ms. Diaz de
Villegas’ email does not tip the scale. See, e.g., Hornady Mfg. Co., Inc. v. Doubletap, Inc., 746
F.3d 995, 1004-05 (10th Cir. 2014) (proffered evidence of actual confusion involving only a
handful of instances of confusion was de minimis). Thus, this factor weighs in favor of URG.
viii.
Balancing the Likelihood of Confusion Factors
37
Case No. 16-cv-60154-BLOOM/Valle
After evaluating all of the likelihood-of-confusion factors in light of the relevant evidence
and arguments, the Court finds that United Country has not established that URG’s mark creates
a likelihood of confusion. The Court recognizes that this is a close case. Of the seven factors,
four weigh in favor of finding a likelihood of confusion: similarity of the marks, similarity of the
services, similarity of trade channels and customers, and similarity of advertising media.
Importantly, however, “the two most important factors—evidence of actual confusion and the
strength of the mark—do not.” See Fla. Int’l U. Bd. of Trustees, 830 F.3d at 1265. United
Country’s evidence of actual confusion is essentially de minimis, and the crowded field of real
estate businesses in Florida using the word “United” in their company names weakens the overall
strength of the UNITED marks.
Above all else, the heightened burden applicable in this case due to the sophisticated
nature of the relevant consumer base substantially undercuts finding a likelihood of confusion.
Real estate agents must go through significant training and testing before obtaining a license, and
they must complete continuing educational requirements to retain the license. In addition, the
employment nature of the transaction contemplated in this case ensures that even greater
attention will be paid during the time any alleged confusion might otherwise manifest into actual
harm. As a primary example, prospective real estate agents looking to join URG usually have
direct contact with a URG representative at an interview—conducted either by phone or in
person—and must complete paperwork before officially becoming a URG agent. See EMSL
Analytical, Inc. v. Testamerica Analytical Testing Corp., 2006 WL 892718, at *8 (D.N.J. Apr. 4,
2006) (in analyzing sophistication of customers as a separate likelihood-of-confusion factor,
emphasizing that the relevant consumer group included “hygienists, [] consultants,
environmental specialists, etc.” and that “the sale of the services requires direct and repeated
38
Case No. 16-cv-60154-BLOOM/Valle
personal contact with customers”) (citing Accuride Int’l., Inc. v. Accuride Corp., 871 F.2d 1531,
1537 (9th Cir. 1989)); see also Accuride Int’l., 871 F.2d at 1537 (finding that direct sales by
knowledgeable salespersons weighed heavily against finding a likelihood of confusion). For
these reasons, real estate agents (and real estate brokers for that matter) are less likely to be
easily and/or meaningfully confused by similar-sounding real estate brokerage companies. Thus,
it is unlikely that a prospective real estate agent would inadvertently choose to represent a real
estate brokerage company it never actually intended to. See Blue Bell Bio-Med. v. Cin-Bad, Inc.,
864 F.2d 1253, 1260 (5th Cir. 1989) (“[T]he care with which hospitals purchase medical carts,
including field testing of any unfamiliar product, makes it unlikely that a facility might
inadvertently pick up a brand they did not mean to purchase.”).
As one court has recognized, “the typical client of a real estate brokerage agency is not an
expert in the purchase and sale of real estate or in real estate franchise relationships.” RE/MAX
Int'l, Inc. v. Trendsetter Realty, LLC, 655 F. Supp. 2d 679, 708 (S.D. Tex. 2009). Rather, “the
ordinary consumer of real estate brokerage services. . . . is likely to be a typical buyer exercising
ordinary caution.” Id. (citation and internal quotation marks omitted); see also Vesta Corp. v.
Vesta Mgmt. Servs., LLC, 2016 WL 8710440, at *12 (S.D. Tex. Sept. 30, 2016) (“So too here,
the average renter looking for an apartment is unlikely to understand the relationship between the
two parties to this lawsuit.”) (citing RE/MAX Intern, 655 F. Supp. 2d at 707-708). But in this
case, unlike the ordinary consumer of real estate brokerage services—such as renters, buyers,
and sellers of real estate—a real estate agent is exactly the kind of person who is likely to
understand the relationship between the parties in this case.
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Case No. 16-cv-60154-BLOOM/Valle
Having failed to establish that URG’s mark creates a likelihood of confusion, United
Country’s trademark infringement claims under 15 U.S.C. §§ 1114, 1125(a) must fail.
Defendant URG is therefore entitled to judgment on both Counts I and II of the Complaint. 16
V.
CONCLUSION
For the foregoing reasons, the Court finds that Plaintiff has failed to meet its burden of
establishing a likelihood of confusion so as to prevail on its trademark infringement claims under
the Lanham Act, and judgment must therefore be entered in favor of Defendant. Pursuant to
Rule 58 of the Federal Rules of Civil Procedure, the Court will enter judgment for Defendant by
separate order.
DONE AND ORDERED in Miami, Florida, this 29th day of September, 2017.
______________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record
16
As a final note, URG’s argument that United Country’s claims are barred by laches fails. See generally
Citibank, N.A. v. Citibanc Group, Inc., 724 F.2d 1540, 1546 (11th Cir. 1984) (in order to successfully
assert a laches defense a defendant must show an inexcusable delay in asserting a right or claim that
ultimately causes the defendant undue prejudice). United Real Estate entered the Florida market in 2013,
and United Country filed suit in January of 2016. Although URG presented evidence that United Country
had a presence in Florida long before—namely, through its United Country brand that focuses on country
and vacation properties—there was no evidence that United Country, like URG, dealt with urban,
residential real estate. In other words, United Country had not “expanded into the [alleged] infringer’s
territory such that an action [could] be maintained” until 2013, when United Real Estate entered the
relevant territory and market. Id. (explaining that in a trademark case, “the plaintiff’s rights must be
protectable”) (citing Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358 (2d Cir. 1959)). Thus, on
the facts of this case, the Court does not find that United Country unreasonably and inexcusably delayed
in bringing its trademark infringement claims against URG.
40
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