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Heron Development Corporation v. Vacation Tours, Inc.

United States District Court, S.D. Florida, Miami Division

November 30, 2017

HERON DEVELOPMENT CORPORATION, Plaintiff,
v.
VACATION TOURS, INC., MEDIA INSIGHT GROUP, INC., ROSANNA M. MENDEZ and GEORGE A. ALVAREZ, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS THE VERIFIED SECOND AMENDED COMPLAINT

          FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE.

         I. Introduction

         This is an intellectual property case involving alleged violations of The Lanham Act, Florida's Registration and Protection of Trademarks Act, and Florida's Deceptive and Unfair Trade Practices Act. The two Plaintiffs-the owner and the exclusive licensee of certain hotel-and resort-related trademarks-contend that Defendants infringed those trademarks by registering, and transacting business on, domain names strikingly similar to the protected marks. Plaintiffs filed a seven-count Verified Second Amended Complaint challenging Defendants' conduct, and Defendants subsequently filed a motion to dismiss the Complaint in its entirety.

         For the reasons discussed below, this Court holds that Defendants' Motion to Dismiss the Verified Second Amended Complaint and Demand for Jury Trial is GRANTED in part and DENIED in part.

         II. Background

         A. Parties and Relevant Non-Parties

         1. Relevant Non-Party

         a. Palace Holding, S.A. de C.V. ("Palace Holdings")

         Palace Holdings is a Mexican corporation in the hospitality industry. It owns and operates hotels, resorts, and spas, and sells wedding, meeting, and vacation packages. Although not a party to this case, it has conducted business with Plaintiff and Defendants at various times. Defendant Vacation Tours, Inc. previously had a wholesaler relationship with Palace Holdings until Palace Holdings terminated the agreement in 2014. Palace Holdings previously licensed the trademarks at issue in this case to Heron. However, in February 2016, Palace Holdings assigned those trademarks and the licensing agreement to Palace Resorts, S.A. de C.V.

         2. Plaintiffs

         a. Palace Resorts, S.A. de C.V. ("Palace Resorts")

         Palace Resorts is a Mexican corporation in the hospitality industry. It owns and operates hotels, resorts, and spas, and sells wedding, meeting, and vacation packages. Heron currently holds the exclusive license to use, enforce, and protect certain Palace Resorts' trademarks in the United States.

         b. Heron Development Corporation

         Heron is a Panamanian company with its principal place of business in Panama City, Panama. It is a wholesale commercial retailer of unsold resort inventory for resorts in Mexico and the Caribbean, including the following properties owned by Palace Resorts:

(1) Beach Palace - located in Cancun, Mexico (opened October 1985);
(2) Cozumel Palace - located in Cozumel, Mexico (opened in May 2005);
(3) Isla Mujeres Palace - located in Isla Mujeres, Mexico (opened in January 2007);
(4) Le Blanc Spa Resort - located in Cancun, Mexico (opened in August 2005);
(5) Moon Palace Gold & Spa Resort - located in Cancun, Mexico (opened January 1997);
(6) Moon Palace Jamaica Grand - located in Ocho Rios, Jamaica (opened in June 2015);
(7) Playacar Palace - located in Playa del Carmen, Mexico (opened in December 2005); and
(8) Sun Palace - located in Cancun, Mexico (opened in December 1990).

         Heron and Palace Holdings entered into an exclusive license agreement on December 5, 2015. The contract granted Heron an exclusive license to use certain trademarks owned by Palace Holdings in the United States for the purpose of marketing and promoting the eight resort properties listed above. The licensing agreement also granted Heron the exclusive right to enforce and protect the trademarks from dilution and infringement in the United States. On February 1, 2016, Palace Holdings assigned the trademarks as well as the licensing agreement with Heron to Palace Resorts.

         3. Defendants

         a. Vacation Tours, Inc. ("Vacation Store")

         Vacation Tours, Inc.-which operates as "Vacation Store of Miami" and "Vacation Store"-is a Florida Corporation with its principal place of business in Coral Gables, Florida. For a period of time, Vacation Store maintained a wholesaler relationship with Palace Holdings.

         b. Media Insight Group

         Media Insight Group, Inc. is a Florida Corporation with its principal place of business in Miami Beach, Florida. It is the registrant of forty domain names that allegedly infringe Palace Resorts' trademarks.[1]

         c. George Alvarez

         George A. Alvarez is the registered agent and officer/director of Media Insight.

         d. Rosanna M. Mendez

         Rosanna M. Mendez is an officer/director of Media Insight and Vacation Store.

         B. Summary of Facts

         Around 2008, Defendants began a marketing, advertising, and reservation referral service. Reservation referral services often have multiple wholesaler commission-based business relationships with hotels, resorts, and other travel-service providers. For every referral-service customer who ultimately purchases a vacation package or books the hotel, the referral service receives a commission payment.

         On June 10, 2012, Vacation Store and Palace Holdings entered into the most recent wholesaler contract and addendum ("Final Contract") that specified rates and terms for booking rooms at properties owned and operated by Palace Resorts. The Final Contract prohibited the unauthorized use or reproduction of Palace Holdings' trademarks and provided that infringement-including the use of confusingly similar domain names-would be grounds for terminating the Final Contract.

         At some point, Media Insight began registering the 40 domain names listed in the chart below-all of which include the exact name (or a slight variation) of a Palace Resorts property.[2] Vacation Store uses those domain names to operate live websites-designed to resemble authentic Palace Resorts websites-to market its reservation referral business and sell travel services to consumers. Notably, Vacation Store sells reservations at Palace Resorts properties through these domain names without any authorization from, or affiliation with, Palace Resorts.

         The following chart lists thirteen trademarks owned by Palace Resorts and licensed by Heron, their registration and incontestability[3] information, and the allegedly infringing domain names registered and used by Defendants to market and sell travel products and services.

Palace Resort Corporation's Trademarks

Registration & Incontestability

Defendant's Allegedly Infringing Domain Names

1. BEACH PALACE

Reg. no. 3622187, (Registered on May 19, 2009) (Incontestable on May 19, 2015)

1. beachpalacecancunhotel.com

2. beachpalacecancunresort.com

3. beachpalace.tv

4. beachpalacegrand.com

2. COZUMEL PALACE

Reg. no. 3154935, (Registered on Oct. 10, 2006) (Incontestable on Oct. 21, 2011)

5. palacecancunhotel.com

6. palacecozumel.com

3. ISLA MUJERES PALACE

Reg. no. 3611002, (Registered on Apr. 28, 2009) (Incontestable on May 20, 2015)

7.islamujerespalace.com

8.islamujerespalacegrand.com

9.palaceislamujeres.com

10.islamujerespalaceresort.com

4. LE BLANC BED

Reg. no. 3790516, (Registered on May 18, 2010), (Incontestable on May 16, 2010)

11.leblanc-cancun.com

12.leblanc-hotel.com

5. LE BLANC SPA RESORT

Reg. no. 3160152, (Registered on Oct. 17, 2006) (Incontestable on Nov. 29, 2011)

13.leblancancunspa.com

14.leblanccancunresort.com

15.leblancresortspa.com

6. MOON PALACE

Reg. no. 2453148, (Registered on May 22, 2001), (Incontestable on May 18, 2007)

16.moonpalacecancunresort.com

17.moonpalacepuntacanahotel.com

- 18.moonpalaceresortpuntacana.com

19.moonpalacepuntacanaresort.com

20.moonpalacejamaicagrand.com

21.moonpalacejamaicaresort.com

- 22. moonpalaceochorios.com

23. moonpalacerivieramaya.com

7. MOON PALACE GOLF & SPA RESORT

Reg. no. 3611003, (Registered on Apr. 28, 2009), (Incontestable on May 19, 2015)

8. MOON SPA & GOLF CLUB

Reg. no. 3611001, (Registered on Apr. 28, 2009), (Incontestable on May 22, 2015)

9. PALACE RESORTS

Reg. no. 3738725, (Registered on Jan. 19, 2010), (Incontestable on Jan. 19, 2016)

24.palacejamaicagrande.com

25.palaceresortsguide.com

26.xpu-hapalaceresort.com

10. PLAYACAR PALACE

Reg. no. 3163633, (Registered on Oct. 24, 2006), (Incontestable on Oct. 24, 2011)

27.palaceplayacar.com

28.playacarpalace.com

29.playacarpalacegrand.com

30.playacarpalaceresort.com

31.palaceplayacarresort.com

11. SUN PALACE

Reg. no. 3622188, (Registered on May 19, 2009), (Incontestable as of May 19, 2015)

32.sunpalacecancunresort.com

33. sunpalaceresort.com

34.sunpalace.tv

12. CANCUN PALACE

Serial no. 86659415

35.palacecancunresort.com

36.cancunandbeachpalace.com

37. cancunpalace.tv

38.cancunpalacelasamericas.com

39.cancunpalacespecials.com

40.palacecancun.com

13. CANCUN PALACE

Serial no. 86656713

         On March 14, 2014 Plaintiffs' lawyer sent a letter to Vacation Store and Rosanna Mendez terminating the Final Contract because of Vacation Store's use of the allegedly infringing domain names. According to Plaintiffs, the use of these domain names violated the Final Contract's intellectual property restrictions. Five days later, Plaintiffs' lawyer sent a second letter demanding that Vacation Store cease and desist using Palace Holdings' protected marks.

         Vacation Store did not comply with Plaintiffs' requests. Rather, it responded on April 1, 2014 by sending Plaintiffs a proposed domain names license agreement. The proposed agreement sought payment from Plaintiffs in exchange for transferring the challenged domain names, or permitting Plaintiffs to use those domain names. Plaintiffs declined.

         Plaintiffs' counsel sent Defendants Rosanna Mendez and George Alvarez a final cease and desist letter on June 15, 2015. This letter cited Defendants' intellectual property infringements and detailed seven instances of actual customer confusion resulting from Defendants' use of the domain names at issue. Defendants refused to comply. On February 1, 2016, Palace Holdings assigned "all of its rights, interests, and obligations in and to the Palace Resort Marks and the License Agreement" to Palace Resorts. (Second Am. Compl. ¶ 22.) The assignment also transferred the licensing agreement with Heron to Palace Resorts.

         III. Analysis

         A. Motion to ...


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