Bavaro Palace, S.A. v. Vacation Tours, Inc.

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
OCTOBER 2, 2006
No. 05-14824 THOMAS K. KAHN
________________________ CLERK

D. C. Docket No. 04-20422-CV-JLK

BAVARO PALACE, S.A., a foreign corporation,

Plaintiff-Counter-
Defendant-Appellant,

BAVARO BEACH, S.A., a foreign corporation, et al.,

Plaintiffs-
Counter-Defendants,

versus

VACATION TOURS, INC.,
a.k.a. Vacation Store of Miami, Inc.,
VACATION TOURS OF SOUTH BEACH, INC.,
a dissolved Florida corporation,
ROSANNA METZ-MENDEZ,
an individual,
ALEXANDRA ALVAREZ,
an individual,

Defendants-Counter-
Claimants-Appellees.
 ________________________

Appeal from the United States District Court
for the Southern District of Florida
_________________________

(October 2, 2006)

Before TJOFLAT and CARNES, Circuit Judges and HODGES,* District Judge.

CARNES, Circuit Judge:

The plaintiff, Bavaro Palace, appeals the district court’s entry of final

judgment on all claims in favor of the defendants, Vacation Tours and Rosanna

Metz-Mendez. The entry of judgment followed a bench trial. We affirm the

district court on the Lanham Act and Anticybersquatting Consumer Protection Act

claims, but we vacate the district court’s decision on the Florida Deceptive and

Unfair Trade Practices Act claim and remand for entry of fact findings and

conclusions of law in compliance with Rule 52(a) of the Federal Rules of Civil

Procedure.

I.

The Barceló Bavaro Palace is one of five hotels in a complex known as the

Barceló Bavaro Beach Resort located on Bavaro Beach in the Punta Cana region of

*
The Honorable William Terrell Hodges, United States District Judge for the Middle
District of Florida, sitting by designation.

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the Dominican Republic. Opened in 1992, the hotel is part of an international

chain owned and operated by the plaintiff, Bavaro Palace, S.A. The Barceló

Bavaro Palace is marketed under a two-tier advertising system. The first tier

targets corporate clients and involves the distribution of pamphlets, brochures and

promotional videos. The second tier of promotion is through “co-op marketing”

where authorized distributors work together to market certain hotels using printed

ads, brochures, television and radio. In the joint pretrial stipulations, the parties

agreed that the proper name of the hotel is “Barceló Bavaro Palace.”

Vacation Tours is a wholesale and retail travel agency offering travel

packages to the Dominican Republic and other locations. It has offices in both

Miami Beach and Coral Gables, Florida. In past years, Vacation Tours contracted

with the plaintiff’s parent company to become an authorized distributor for

accommodations at the Barceló Bavaro Palace. Those contracts ended sometime

between 2002 and 2003. While Vacation Tours is no longer an authorized dealer

for the plaintiff, it is for several hotels in the area that compete with the plaintiff.

Even after the distributorship agreement dissolved, Vacation Tours continued to

book rooms at the Barceló Bavaro Palace for its customers through other agencies,

such as Hotel Beds and Go Go Tours.

The plaintiff claims that Vacation Tours engaged in a “bait and switch”

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scheme whereby it would convince customers who specifically requested a Barceló

brand hotel to reserve rooms with a competing property instead. The trial court,

however, found that Vacation Tours honored specific customer requests, even if it

meant booking a hotel that it did not promote.

In 2001 a consultant for Vacation Tours registered the domain name

bavaropalace.com to advertise the Barceló Bavaro Palace and competing hotels on

Bavaro Beach. The website lists the phone numbers for Vacation Tours. Clicking

on the individual hotels also directs browsers to Vacation Tours’ phone numbers.

Vacation Tours does not use the term “bavaropalace.com” as any part of its

business name.

On February 1, 2004, Vacation Tours ran a series of advertisements in The

Miami Herald and El Nuevo Herald for tour packages that included

accommodations at the Barceló Bavaro Palace. The advertisements included

Vacation Tours’ phone numbers and the web address, bavaropalace.com. Two

days later, a promotions and marketing representative for the plaintiff traveled

from the Dominican Republic to Miami to meet with Rosanna Metz-Mendez, the

president, chief officer, and sole director of Vacation Tours. The representative

asked Metz-Mendez to stop running the print ads, and she agreed. The parties

dispute whether the representative also asked Metz-Mendez to discontinue use of

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the web address. The plaintiff asserts that he did but Metz-Mendez denies that.

On February 5, 2004, the ad again ran in The Miami Herald. The plaintiff

sent a cease and desist letter on February 11, 2004, demanding that within two days

of receipt Vacation Tours send written confirmation that it had stopped using the

bavaropalace.com web address. Vacation Tours did not respond to the letter and

continued to use the domain name.

On February 20, 2004, the plaintiff filed a complaint against Vacation Tours

and Metz-Mendez, alleging, among other things, violations of the Lanham Act, the

Anticybersquatting Consumer Protection Act, and the Florida Deceptive and

Unfair Trade Practices Act (“FDUTPA”). Vacation Tours filed a counterclaim, but

it was voluntarily dismissed during trial. After a three day bench trial, the court

entered judgment in favor of the defendants on all claims. The district court found

that the plaintiff failed to introduce evidence at trial indicating that the hotel was

advertised or promoted as “Bavaro Palace” without the “Barceló” modifier. All

marketing materials offered by the plaintiff referred to the hotel as the “Barceló

Bavaro Palace,” and that is how the hotel is known in the industry. The district

court found no evidence that the hotel had ever been marketed under the name

“Bavaro Palace.”

The district court concluded from the evidence that “Bavaro Palace” was a

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descriptive mark, composed of the geographic term “Bavaro,” which refers to a

specific segment of beach, combined with the generic industry term “palace,”

which means an upscale hotel. The court reasoned that the plaintiff could not

prevail on its Lanham Act claim because it could show neither secondary meaning

nor likelihood of confusion. The court also determined that the plaintiff had failed

to prove any of the elements necessary for its Anticybersquatting Consumer

Protection Act claim. Although the district court failed to discuss the FDUTPA

claim in its opinion, it did enter judgment for Vacation Tours on all counts.

II.

We review a district court’s conclusions of law de novo, and we review

findings of fact for clear error. MiTek Holdings, Inc. v. Arce Eng’g Co., Inc., 89

F.3d 1548, 1554 (11th Cir. 1996). Rule 52(a) requires that the facts be found

specifically and that the conclusions of law be stated separately; the purpose of

those requirements is to “provide a sufficiently definite predicate for proper

appellate review.” Hydrospace-Challenger, Inc. v. Tracor/MAS, Inc., 520 F.2d

1030, 1033–34 (5th Cir. 1975).

III.

A.

The Lanham Act unfair competition claim arises under 15 U.S.C. § 1125(a).

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In order to establish a protect able mark, a plaintiff must show that the mark is

either inherently distinctive or has acquired secondary meaning. Montgomery v.

Noga, 168 F.3d 1282, 1300 (11th Cir. 1999). Because the mark in this case was

not inherently distinctive, the plaintiff’s case depended on showing that it had

secondary meaning, defined as “the connection in the consumer’s mind between

the mark and the product’s producer.” Gift of Learning Found., Inc. v. TGC, Inc.,

329 F.3d 792, 800 (11th Cir. 2003).

We have held that the “[p]laintiff has the burden of sustaining a high degree

of proof in establishing a secondary meaning for a descriptive term.” Investacorp,

Inc. v. Arabian Inv. Banking Corp. (Investcorp) E.C., 931 F.2d 1519, 1525 (11th

Cir. 1991). There are four factors to consider in determining whether a mark has

acquired secondary meaning: “(1) the length and manner of its use; (2) the nature

and extent of advertising and promotion; (3) the efforts made by the plaintiff to

promote a conscious connection in the public’s mind between the name and the

plaintiff’s product or business; and (4) the extent to which the public actually

identifies the name with the plaintiff’s product or venture.” Conagra Inc. v.

Singleton, 743 F.2d 1508, 1513 (11th Cir. 1984).

The district court properly determined that the actual protect able name is

“Barceló Bavaro Palace,” while the asserted mark, “Bavaro Palace,” is merely

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descriptive. “Bavaro” refers to a specific section of beach in the Punta Cana area

of the Dominican Republic, and “Palace” is a common industry term for a high-end

hotel. The district court concluded that the plaintiff had failed to establish the

necessary consumer connection between the mark and the hotel, as all marketing

materials and even the sign on the hotel itself read “Barceló Bavaro Palace” not

“Bavaro Palace.” There is simply no secondary meaning in the mark “Bavaro

Palace.”

We see no clear error in the district court’s determination that both the

industry and the public at large know the hotel as the “Barceló Bavaro Palace,” nor

in its conclusion that there is no protect able interest in the asserted mark “Barceló

Palace. Because there was no protect able interest in the asserted mark, the

consumer confusion analysis is immaterial. Gift of Learning Found., 329 F.3d at

801(“The confusion that plaintiff claims exists is irrelevant unless the mark is

protect able in the first instance.”).

B.

The district court did not err in rejecting the plaintiff’s Anticybersquatting

Consumer Protection Act (“ACPA”), 15 U.S.C. § 1125(d), claim. To prevail under

the ACPA, a plaintiff must prove that (1) its mark is distinctive or famous and

entitled to protection; (2) the defendant’s domain name is identical or confusingly

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similar to the plaintiff’s mark; and (3) the defendant registered or used the domain

name with a bad faith intent to profit. Shields v. Zuccarini, 254 F.3d. 476, 482 (3d

Cir. 2001).

The district court did not clearly err in the fact findings underlying its

conclusions that the plaintiff had not proven any of the three elements necessary to

make out a viable ACPA claim. Any error in the district court’s thinking that a

mark must be both distinctive and famous for these purposes is harmless. The

plaintiff failed to prove that the mark “Bavaro Palace” was either distinctive or

famous, and as we have noted, it is not entitled to protection as a descriptive mark.

Nor did the plaintiff establish that “bavaropalace.com” was confusingly similar to

“Barceló Bavaro Palace” or that Vacation Tours acted with bad faith. The district

court properly dismissed this claim.

C.

The district court also entered judgment against the plaintiff on the FDUTPA

claim. Because the court did not explain its reasoning, however, we do not know

the basis for its ruling.

The Florida statute protects against any “[u]nfair methods of competition,

unconscionable acts or practices, and unfair or deceptive acts or practices in the

conduct of any trade or commerce . . . .” Fla. Stat. Ann. § 501.204(1) (West 2006).

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We said in Gift of Learning, 329 F.3d at 802, that a FDUTPA claim fails where the

plaintiff is unable to show a protect able mark, but that case focused on trademark

infringement and did not involve any allegations of a “bait and switch” scheme.

Id. at 797. A Florida court has yet to apply this statute to facts like these.

Still, this Court noted parenthetically in Gift of Learning “that the analysis of

the Florida statutory and common law claims of trademark infringement and unfair

competition is the same as under the federal trademark infringement claim.” Id. at

802 (citing Investacorp Inc., 931 F.2d at 1521); see also Planetary Motion, Inc. v.

Techsplosion, Inc., 261 F.3d 1188, 1193 n.4 (11th Cir. 2001) (“Courts may use an

analysis of federal infringement claims as a ‘measuring stick’ in evaluating the

merits of state law claims.”). FDUTPA specifically notes that “due consideration

and great weight shall be given to the interpretations of the Federal Trade

Commission and the federal courts,” Fla. Stat. Ann. § 501.204(2) (West 2006).

The Code of Federal Regulations defines “bait advertising” as:

an alluring but insincere offer to sell a product or service which
the advertiser in truth does not intend or want to sell. Its
purpose is to switch consumers from buying the advertised
merchandise, in order to sell something else, usually at a higher
price or on a basis more advantageous to the advertiser. The
primary aim of a bait advertisement is to obtain leads as to
persons interested in buying merchandise of the type so
advertised.

16 C.F.R. § 238.0 (2006). Additionally, the Florida legislature’s purpose in

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drafting FDUTPA may guide the district court’s decision about this claim. The

statute was enacted “[t]o protect the consuming public and legitimate business

enterprises from those who engage in unfair methods of competition, or

unconscionable, deceptive, or unfair acts or practices in the conduct of any trade or

commerce.” Fla. Stat. Ann. § 501.202(2) (West 2006).

Because the district court failed to set out findings of fact about the

allegations that Vacation Tours ran a “bait and switch” scheme and did not specify

the conclusions of law underlying its decision about that claim, we vacate the part

of the decision disposing of the FDUTPA claim and remand it for compliance with

Rule 52(a).

The judgment of the district court is AFFIRMED insofar as it concerns the

Lanham Act and Anticybersquatting Consumer Protection Act claims, but it is

VACATED insofar as it concerns the Florida Deceptive and Unfair Trade

Practices Act claim, and the case is REMANDED for further proceedings related

to that claim as specified in this opinion.

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