Vail Associates, Inc. v. Vend-Tel-Co., Ltd.

FILED
United States Court of Appeals
Tenth Circuit

February 7, 2008
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

VAIL ASSOCIATES, INC., and
VAIL TRADEMARKS, INC.,

Plaintiffs-Appellants,
v. No. 05-1058
VEND-TEL-CO., LTD., and
ERIC A. HANSON,

Defendants-Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 01-CV-1172-RPM)

Glenn K. Beaton (Stephen C. McKenna with him on the briefs), Gibson, Dunn &
Crutcher, L.L.P., Denver, Colorado, for Plaintiffs-Appellants.

Luke Santangelo, Santangelo Law Offices, P.C. (Kay L. Collins, Santangelo Law
Offices, P.C., and Thomas R. French, Thomas R. French, P.C., with him on the
brief), Fort Collins, Colorado, for Defendants-Appellees.

Before BRISCOE, BALDOCK, and TYMKOVICH, Circuit Judges.

BALDOCK, Circuit Judge.
 This service mark infringement case is about the use of a purely descriptive

term, “Ski,” in conjunction with a geographically descriptive term, “Vail,” or more

precisely, “Ski Vail.” Plaintiff Vail Associates (VA), owner of the Vail Ski Resort,

has a registered incontestable service mark in the latter, but not the former term. 1

VA’s service mark registration describes “Vail” as encompassing the gamut of

commercial recreational activities and accompanying amenities available in and

around the Town of Vail, Colorado, save maybe golf. According to the registration,

VA’s mark encompasses “downhill skiing facilities, ice skating facilities, cross-

country ski trails and expeditions, hiking and back-packing trails, and horseback

riding, . . . resort hotel and restaurant services, and retail store services in the field

of recreational equipment.” United States Patent and Trademark Office (PTO), Reg.

No. 1,521,276 (Jan. 17, 1989). 2 Defendant Vend-Tel-Co (VTC) meanwhile has a

registered service mark on the vanity or alphanumeric telephone number “1-800-SKI-

VAIL,” which offers “marketing services related to the ski industry, namely

1
The Trademark Act of 1946, codified at 15 U.S.C. §§ 1051-1127 (as
amended) and commonly referred to as the Lanham Act, covers both trade and
service marks. See id. § 1053. The Act defines “service mark” as a word or
name used “to identify and distinguish the services of one person, including a
unique service, from the services of others and to indicate the source of the
services.” Id. § 1127. The term “trademark” includes a word or name “to identify
and distinguish . . . goods, including a unique product, from those manufactured
or sold by others and to indicate the source of the goods.” Id.
2
VA also holds a symbol mark incorporating the name “Vail.” PTO, Reg.
No. 848,623 (May 7, 1963). Importantly, that stylized logo, often used in
combination with the “Vail” mark, is not at issue here.

2
providing an automated phone switching system to offer services available in or near

Vail, Colorado and nearby resort locations.” PTO, Reg. No. 2,458,894 (June 12,

2001).

VA’s essential claim is that VTC’s use of the geographically descriptive term

“Vail” in combination with the descriptive term “Ski” infringes its “Vail” mark,

making VTC’s use of 1-800-SKI-VAIL violative of the Lanham Act. Specifically,

VA claims direct confusion, that is to say VTC’s use of the vanity number is likely

to cause consumers to believe that VA or its ski resort is the source of VTC’s phone

service. See Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1238 (10th Cir. 2006)

(distinguishing direct from indirect confusion). Consumers, so goes VA’s theory of

the case, are more likely to dial the number because they perceive it as associated

with VA’s services. This, in turn, allows VTC to divert business from VA by

referring consumers elsewhere.

I.

Of course, VA’s claim of service mark infringement under 15 U.S.C.

§ 1114(1)(a), based on the likelihood of confusion between the two marks, is a

factual inquiry upon which VA bore the burden of proof at trial. See Universal

Money Ctrs., Inc. v. AT&T, 22 F.3d 1527, 1530 (10th Cir. 1994). 3 Following a

3
Section 1114(a)(1) of the Lanham Act proscribes the unauthorized use in
commerce of any reproduction of a registered mark in connection with the
marketing of any goods or services where “such use is likely to cause confusion.”
(continued...)

3
bench trial, the district court concluded VA failed to meet its burden. Specifically,

the district court found VA failed to prove VTC’s use of its 1-800 service mark

posed a likelihood of consumer confusion between the services offered by VA and

VTC. Viewing the evidence in a light most favorable to the district court’s finding,

our careful review of the trial record reveals ample support for the court’s judgment. 4

See Sanpete Water Conserv. Dist. v. Carbon Water Conserv. Dist., 226 F.3d 1170,

3
(...continued)
While an incontestable service mark is “conclusive evidence . . . of the
registrant’s exclusive right to use the registered mark in commerce[,]” such
evidence “shall be subject to proof of infringement as defined in section 1114.”
15 U.S.C. § 1115(b); see KP Permanent Make-Up, Inc. v. Lasting Impression I,
Inc., 543 U.S. 111, 117 (2004).
4
The district court also rejected VA’s false designation of origin claim
under 15 U.S.C. § 1125(a), and its cancellation claim under 15 U.S.C. § 1064. To
establish a false designation of origin claim, a plaintiff must establish such
designation “is likely to cause confusion, or to cause mistake, or to deceive.” Id.
§ 1125(a)(1)(A). The district court held VA’s claim failed for lack of proof on
these elements. Our likelihood of confusion analysis herein necessarily defeats
VA’s false designation claim. As to its cancellation claim, VA asked the district
court to cancel VTC’s service mark registration based on two purportedly
fraudulent misrepresentations of fact in VTC’s 1997 registration application. See
id. § 1064(3) (providing for cancellation of a mark if “obtained fraudulently”).
On its application, VTC indicated it had employed the 1-800-SKI-VAIL mark
from 1992 forward when in fact VTC’s predecessor had used the mark from 1992-
1997. VTC acquired the mark in 1997. Second, VTC represented it was using
the mark as shown in a 1994-1995 advertising directory when, in fact, VTC at the
time of the application was no longer using the directory as a method of
marketing its product. The district court held VA failed to establish by clear and
convincing evidence that these apparent misstatements of fact were material to
PTO’s issuance of the registration. See Beer Nuts, Inc. v. Clover Club Foods Co.,
711 F.2d 934, 942 (10th Cir. 1983) (“Any deliberate attempt to mislead the Patent
Office must be established by clear and convincing evidence.”). We do not
“lightly undertake cancellation on the basis of fraud,” id., and are loathe to infer
fraud on the basis of the scant record before us.

4
1178 (10th Cir. 2000) (explaining that on appeal from a bench trial, “we view the

evidence in the light most favorable to the district court’s ruling and must uphold any

district court finding that is permissible in light of the evidence”).

On an appeal from a bench trial, we may not set aside the factual findings of

the district court “unless clearly erroneous.” Fed. R. Civ. P. 52(a). A court bound

by the clearly erroneous standard cannot simply reject findings with which it does

not agree:

A finding is clearly erroneous when although there is evidence to
support it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed. This
standard plainly does not entitle a reviewing court to reverse the finding
of the trier of fact simply because it is convinced that it would have
decided the case differently. In applying the clearly erroneous
standard[,] appellate courts must consistently have in mind that their
function is not to decide factual issues de novo.

Estate of Trentadue v. United States, 397 F.3d 840, 859-60 (10th Cir. 2005)

(emphasis added) (internal quotations, citations, and ellipses omitted). For reasons

to become readily apparent, that standard of review sounds the death knell of VA’s

Lanham Act claim.

II.

We begin with a comprehensive appraisal of the trial evidence, viewed through

the proper evidentiary prism. That is to say, we review the record evidence in a light

most favorable to both the district court’s subsidiary and ultimate findings. At the

close of VA’s case-in-chief, the district court cautiously deferred ruling on VTC’s

5
motion for judgment as a matter of law on VA’s Lanham Act claim. See Fed. R. Civ.

P. 52(c). Yet the court in doing so accurately described VA’s claim as “very weak.”

Appellants’ App. at 748 (hereinafter App.).

A.

VA’s first witness was Chris Jarnot, Vice-President of Marketing and Sales for

VA. After describing VA’s corporate structure, Jarnot testified about his

“impression” of 1-800-SKI-VAIL: “[T]o me [it] would be confusing to a customer

who saw the number. They would perceive it to be our company that were [sic]

answering the number.” App. at 471-72. On cross examination, Jarnot testified he

was not “aware of any instance where consumers were actually confused by the use

of 1-800-Ski-Vail.” App. at 485. Jarnot further acknowledged “the hundreds of uses

of the letters V-A-I-L in the names of businesses in the Vail Valley.” App. at

486-87.

VA’s next witness was Eric Hanson, a named Defendant along with VTC, and

former shareholder and president of VTC. Hanson testified as to the ownership

history of 1-800-SKI-VAIL. In 1992, a company known as 1-800-Ski-Numbers,

with which Hanson was affiliated, held rights to the number. Hanson stated VTC

acquired rights to the number in 1997 and later had the number registered as a mark.

VTC transferred ownership of the number to him along with rights to the mark

during the pendency of this lawsuit. Throughout the vanity number’s history, calls

had been routed to various businesses, including at least three travel agencies. At

6
various times, the number was promoted through print directories, print ads,

electronic media, and email solicitations. After VA expressed concern about VTC’s

use of the number in the summer of 1995, callers, at least sporadically, heard a

disclaimer stating the number was not affiliated with VA.

On cross examination, Hanson explained 1-800-Ski-Numbers had held the

rights to twenty-three vanity numbers all incorporating the word “Ski.” The purpose

of the company was to use 1-800 numbers as a conduit for pointing consumers to

ski-related services in Colorado, among other places. The business plan was to sell

advertising as part of print directories and to earn commissions on reservations made

through the conduit. Hanson stated that in August 1995, 1-800-Ski-Numbers

received a cease and desist letter from VA. The letter stated: “You will not use the

expression Ski, or any similar expression together with the word Vail as part of your

800 number advertising or merchandising.” App. at 585.

The third, and by far the most telling, witness that VA called to the stand was

Joyce Newton. Newton is a resident of the Vail region and the owner of a local

travel agency known as Vacation Coordination. In August 2001, Newton’s agency

agreed to answer calls placed to 1-800-SKI-VAIL. Vacation Coordination began

taking calls in September 2001. Newton testified that her agency received

“anywhere from ten to twenty calls” per week. App. at 618. The typical caller asked

questions “with regard to general ski related products, [or] location questions.” App.

at 620. Newton stated the caller “would ask perhaps the price of a season pass, [or]

7
directions to get to the Vail destination. There were inquiries about the weather,

grooming, just some general location related things. Sometimes it would be about

a restaurant or ski rental, or something like that.” App. at 621. On cross-

examination, Newton responded “yes” when asked whether “it would be fair to say

. . . that you get questions all the time in your capacity as a travel agent about

grooming and ski passes regardless of whether it was a call from 1-800-Ski-Vail?”

App. at 631.

Because Vacation Coordination booked a substantial number of reservations

with VA and earned a substantial amount of commissions from those bookings,

Newton inevitably became caught in the cross-fire. Mark Manley, VA’s Associate

General Counsel, delivered to Newton, for her signature, an affidavit to be used in

this litigation. The relevant portions of that proposed affidavit read:

9. . . . . When Vacation Coordination originally began answering calls
to the 1-800- SKI-VAIL telephone number many callers indicated that
they thought they were calling the entity that operates the Vail Resort.
Individuals would inquire regarding the purchase of ski season passes,
ski lift tickets, ski instruction, or in numerous cases, the person asked
if they had reached Vail Resorts.

10. . . . . Since December of 2001, several callers have still indicated
that they were attempting to reach Vail Resorts or were confused that
they had not reached Vail Resorts.

Appellees’ Supp. App. at 4, 74 (hereinafter Supp. App.).

Newton testified that upon receipt of the affidavit, she made certain additions

and deletions, including striking the phrases “many callers,” “numerous cases,” and

8
“several callers,” to more accurately reflect her views. The deletions (stricken) and

additions (italicized) Newton made to paragraphs nine and ten are as follows:

9. . . . . When Vacation Coordination originally began answering calls
to the 1-800- SKI-VAIL telephone number many callers indicated that
they thought they were calling the entity that operates the Vail Resort.
Individuals would inquire regarding the purchase of ski season passes,
ski lift tickets, ski instruction, or in numerous cases, the person asked
if they had reached Vail Resorts. on occasion, however, with no
reference to any specific company. In my opinion, most people can’t
necessarily identify a specific company with the purchase of their ski
vacation products. They are familiar with [a] place to ski, as a place,
not a company.

10. . . . . Since December of 2001, several callers have still indicated
that they were attempting to reach Vail Resorts or were confused that
they had not reached Vail Resorts.

Supp. App. at 7, 74 (underscore in original). Newton subsequently told Manley to

leave her alone and never delivered her changes to him. App. at 640.

Troubled by Newton’s unwillingness to cooperate, VA ceased doing business

with Vacation Coordination. To restore her travel agency’s business relationship

with VA, Newton promptly signed a revised affidavit:

9. . . . . When Vacation Coordination originally began answering calls
to the 1-800-SKI-VAIL telephone number some callers indicated that
they were calling Vail Mountain or Vail the place to ski. Some
individuals would inquire regarding the purchase of season ski passes,
ski lift tickets, ski instruction at Vail Mountain or Vail the place to ski.

9
 10. . . . . Since December of 2001, callers have occasionally indicated
that they were attempting to reach Vail Mountain or Vail the place to
ski.

Supp. App. at 74 (emphasis added). Newton testified she “felt coerced” into signing

the revised affidavit. App. at 644; see also App. at 624-46 (detailing the facts

surrounding the three versions of the affidavit).

Manley testified next. Manley stated he was responsible for “policing” VA’s

registered service mark. App. at 668. Like Jarnot, another officer of VA, Manley

stated his “impression” of 1-800-SKI-VAIL was that “it would be something that

would immediately confuse our customers.” App. at 670. Manley, on behalf of VA,

informally opposed registration of the vanity number with the PTO based on a

“concern” that “consumers would see this number published, and would use the

number thinking it was going to get them to my company, when it in fact was not.”

App. at 673. 5 About the affidavit controversy, Manly testified he did not want

Newton to say anything “other than the truth.” App. at 677. On cross examination,

Manley acknowledged both Vail Pass and the Town of Vail were geographic

5
Manley explained why VA did not formally oppose registration of the 1-
800-SKI-VAIL trademark before the PTO:

An opposition proceeding before the Patent and Trademark Office . .
. wouldn’t get us to where we wanted. It could only serve to cancel
that particular application. There’s no provision for injunction.
[VTC] would be free to continue to use the phone number. It seemed
to me to be an incomplete and inadequate means to deal with this.

App. at 678.

10
locations. Vail Pass was named in 1945 in honor of Charles Vail, a Colorado state

engineer. Seventeen years later in 1962, the Vail ski area opened. The Town of Vail

was incorporated in 1965. VA registered the word Vail in 1989.

VA’s final two witnesses were Gerald Moore and Richard Hansen,

respectively. Moore was a shareholder in 1-800-Ski-Numbers between 1992 and

1997. Moore testified the company published two directories, the first during the

1994-1995 ski season and the second during the 1995-1996 season. He also stated

that 1-800-SKI-VAIL was first routed to a travel agency in Winter Park, Colorado

known as Vacations, Inc. The number was then routed to Vacation Coordination

before ultimately ending up with a California company named Ares. Hansen had

served previously as President and Chief Executive Officer of 1-800-Ski-Numbers.

Hansen stated he and Eric Hanson had been principals in the company. When asked

whether he had an opinion about his former business associate’s reputation for

truthfulness, Hansen stated: “Yes I do. I don’t believe he’s truthful whatsoever.”

App. at 744. VTC did not cross examine Moore or Hansen. At that point, VA

rested.

B.

Still viewing the evidence in a light most favorable to the district court’s

ruling, as the law requires us to do, let us assess VTC’s case. VTC called only two

witnesses. VTC’s first witness was Eric Hanson. Hanson stated that VTC was

formed in 1986. Its principal business was the installation, maintenance and repair

11
of business phone systems. Hanson explained the history of promotional activities

behind the 1-800 numbers included 1-800-SKI-VAIL. He explained that Richard

Hansen’s early involvement in the 1-800-Ski-Numbers business had ended in

litigation. Hanson also testified about his attempts to resolve VTC’s differences with

VA through numerous means, including his suggestion that VA purchase the vanity

number from VTC. A large portion of Hanson’s testimony addressed the countless

business uses of the word “Vail” in and around the town. Hanson also

testified unequivocally that neither he nor any business with which he was

affiliated ever intended to confuse consumers or trade on the goodwill of VA. App.

at 826-27.

VTC’s second and final witness was its expert, Kenneth Germain, from

Cincinnati, Ohio. Germain is an attorney practicing in the areas of trademark and

unfair competition. He is also an adjunct professor at the University of Cincinnati

College of Law. Germain opined that the “Vail” mark might be considered either

weak or strong depending upon context:

In the specific context of ski resort services, the services for which it’s
registered and for which it’s widely known, yes, it’s strong, . . . .
However, since Vail is inherently a geographically descriptive term in
this context, has been forever, or its entire length of usage, I believe,
used by third parties for a variety of goods and services related to the
Vail, Colorado area, then it is not strong . . . .

App. at 874. Germain also testified as to the similarity of the two marks “with

respect to their appearance, sight, sound, and meaning:”

12
 Vail is a single word. It is what it is. It’s four letters in a certain order,
and it has a certain clear meaning in this context. 1-800-Ski-Vail is
four components. It’s obviously a long distance telephone number. It
includes Vail as one component, but it’s only one of four. Indeed, it’s
the last. They’re quite different from each other.

App. at 875.

Germain opined that VTC was using the word Vail in 1-800-SKI-VAIL “as a

way of telling people that its telephone marketing service relates to Vail, Colorado

and environs.” App. at 875. Germain’s testimony that VTC did not appear to intend

to infringe upon VA’s mark or utilize VA’s reputation was equally critical:

Q. Did you consider any evidence with respect to whether the
defendant appeared to be intending to infringe upon, or to utilize the
reputation of the plaintiffs in this matter?

A. Well, yes. I didn’t see any evidence that indicated an intent to
infringe. One doing business in and around Vail, Colorado pretty much
has to use the word Vail to get the idea across. So, if one is running a
marketing service focusing on activities in and around Vail, Colorado,
then one pretty much has to say, to make it completely functional, Vail.

Q. Were there any factors that you considered that seemed to indicate
that the defendant did not intend to utilize the plaintiff’s – to tie to the
plaintiff’s reputation?

A. Well, my recollection is that in the materials, advertising materials
printed and/or electronic of the defendant, that there were no references
to the Vail Resorts, the plaintiff. There were indeed references to other
hotels and – it just looked like a potpourri of hotels and other providers
of services in and around Vail. I didn’t seek any connection to the
plaintiff.

Q. Did you consider it significant that the defendant had other 1-800-
Ski terms?

A. Yes, it kind of put 1-800-Ski-Vail in context. It was one of some

13
 20-odd telephone numbers that all ran the same way, 1-800-Ski
someplace, where the someplace was designated by the name, the
geographical designation for that place.

App. at 876-77. Finally, VTC asked Germain whether he considered the defendant’s

use of the term Vail in its 1-800-SKI-VAIL mark “to be a use in good faith.” App.

at 879. Germain replied: “It looked like a reasonable, competitively necessary

thing, and . . . when one adopts . . . as a mark a term which is descriptive, or

geographically descriptive in its inception, that party should understand that others

will later find . . . the commercial need, to use that term . . . .” App. at 879.

On cross examination, Germain acknowledged again that in the context of ski

resort services the commercial strength of Vail as a registered mark “was very

strong, probably world renowned.” App. at 882. He reiterated, however, that “a

term that is as geographically descriptive as Vail is a weak term, and it is a term that

members of the commercial public have a right to use.” App. at 888. Germain

further expressed the view that VTC did not directly compete with VA:

I think the way I saw it was that they were sort of symbiotic because the
defendant’s service helps to bring people to the Vail area, and that’s
probably good for Vail Resorts, the plaintiff, not to the Vail Resort
hotel facility per se, but to the ski area, to the mountain, et cetera.
There might be a little overlap or a little competitiveness in the sense
of [the] hotel . . . .

App. at 882-83.

Germain next indicated consumers were not likely to exercise a high degree

of care in calling 1-800-SKI-VAIL: “It’s a free line. It’s easy. It’s quick. But, I

14
. . . assume that they would be careful in committing substantial resources, monetary

resources, to ski lift tickets and other things in the area.” App. at 883. VA also

asked Germain whether he believed VTC had to use the word Ski as part of its mark:

“Well, skiing is kind of what people do in Vail. It is the main attraction, except in

the summer when it’s a nice place to visit. . . . I think skiing of course is a generic

term in the area. I mean, it’s what one does. So it makes perfect sense to use it.”

App. at 886-87. After VA passed the witness, VTC rested. 6

II.

Taken in a light most favorable to the district court’s ruling, the only thing the

preceding recitation of the evidence confirms is the district court’s finding of no

likelihood of confusion was not clearly erroneous. Based on our review of the trial

record, we are satisfied the district court did not clearly err in finding that VA failed

to prove the ordinary consumer, looking for winter recreation in and around the

Town of Vail, Colorado, associates the word “Vail” exclusively, if at all, with VA

or its ski resort. Rather, the ordinary consumer sees Vail as a place to ski, i.e., as

a ski destination, without associating it with any particular entity or service provider.

6
Before the trial concluded, VA called Mark Manley back to the stand as a
rebuttal witness. Manley testified that Vail Sports, Vail Snow Board Supply, Vail
Trail, Vail Mountain Lodge and Spa, and Ski Club Vail all use the word Vail as
part of their business names with VA’s permission. Manley provided no
documentary support for his statement. Manley indicated he did not believe other
business names incorporating the Vail mark “were being used in a sense that
would create confusion.” App. at 891.

15
Simply put, the district court took a permissible view of the evidence to hold VA

failed to prove a likelihood of confusion between 1-800-SKI-VAIL and VA’s

ski resort. As an appellate court, we are not empowered to disturb that view despite

what we believe the evidence, properly gathered and presented, might have shown.

A.

Six nonexhaustive factors guide our review of the evidence in evaluating the

likelihood of confusion between the two marks: (1) evidence of actual confusion

between the marks, (2) the strength of the contesting mark, (3) the intent of the

alleged infringer in adopting the contested mark, (4) the degree of similarity between

the marks, (5) the similarity of the parties’ services and manner in which they market

them, and (6) the degree of care consumers are likely to exercise in purchasing those

services. See Team Tires Plus, Ltd. v. Tires Plus, Inc., 394 F.3d 831, 833 (10th Cir.

2005). First, let us consider VA’s evidence of actual confusion. In Sally Beauty Co.

v. Beautyco, Inc., 304 F.3d 964 (10th Cir. 2002), we explained: “Although not

necessary to prevail on a trademark infringement case, evidence of actual confusion

in the marketplace may be the best indication of likelihood of confusion.” Id. at 974

(emphasis added).

The record reflects VA offered little evidence of actual confusion, initial

interest confusion or otherwise, on the part of consumers phoning 1-800-SKI-VAIL.

See Australian Gold, 436 F.3d at 1238 (explaining “[i]nitial interest confusion results

16
when a consumer seeks a particular trademark holder’s product and instead is lured

to the product of a competitor by the competitor’s use of the same or similar mark”).

What little evidence VA did offer the district court understandably discounted. VA

and the dissent rely largely on the testimony of travel agent Joyce Newton, owner of

Vacation Coordination, to discount the district court’s finding that VA failed to

prove actual confusion. 7 Newton’s testimony was at best mixed. Newton’s

testimony, considered in its entirety, belies any notion the district court’s finding of

no actual confusion was clearly erroneous. See Universal Money Ctrs., 22 F.3d at

1535 (stating “evidence of some actual confusion does not dictate a finding of

likelihood of confusion”).

We have detailed both Newton’s testimony and the controversy surrounding

her affidavit on behalf of VA addressing consumer confusion. Recall that Newton

signed a modified version of VA’s original affidavit and agreed to testify on behalf

of VA only after VA cut off her travel agency’s ability to book reservations with VA,

which, in turn, deprived her travel agency of the ability to earn substantial

commissions. The circumstances under which Newton testified cast a cloud upon

any portion of her testimony favoring VA. The district court was entitled to consider

7
Regarding the question of confusion, both Chris Jarnot, VA’s Vice
President of Marketing and Sales, and Mark Manley, VA’s Associate General
Counsel, testified only to their “impressions” and “concerns.” App. at 471-72,
670, 673. Neither witness had any knowledge that consumers actually believed
they were contacting VA or its properties when dialing 1-800-SKI-VAIL. VA did
not call a single consumer witness to the stand.

17
those circumstances when assessing the credibility of her testimony. See Wessel v.

City of Albuquerque, 463 F.3d 1138, 1145 (10th Cir. 2006) (recognizing the “great

deference” afforded a district court’s credibility determinations).

Newton testified she “felt coerced” into signing an affidavit, which stated

“some callers” and “some individuals” when dialing 1-800-SKI-VAIL believed they

were calling “Vail Mountain or Vail the place to ski.” App. at 644-45. That begs

the question: How many are “some?” We have recognized that “‘[p]robable

confusion cannot be shown by pointing out that at someplace, at sometime, someone

made a false identification.’” King of the Mountain Sports, Inc. v. Chrysler Corp.,

185 F.3d 1084, 1092 (10th Cir. 1999) (quoting 3 J. Thomas McCarthy, McCarthy on

Trademarks and Unfair Competition § 23:14 (4th ed. 1996)). Newton’s deletions

from VA’s original affidavit of the phrases “many callers,” “numerous cases,” and

“several callers” illustrate she was opposed to such representations as simply untrue. 8

8
That brings us to the question of VA’s survey evidence. Evidence of
actual confusion is often introduced through the use of surveys, “although their
evidentiary value depends on the methodology and questions asked.” Sally
Beauty, 436 F.3d at 974. Following a Daubert hearing, the district court
concluded flaws in methodology made VA’s survey data and supporting expert
testimony unreliable “as a basis for drawing conclusions about confusion or the
likelihood of confusion in the relevant market of potential purchasers of the type
of services offered by [VA].” App. at 436; see Bitler v. A.O. Smith Corp., 400
F.3d 1227, 1233 (10th Cir. 2004) (explaining that “a trial court’s focus generally
should not be upon the precise conclusions reached . . . , but on the methodology
employed in reaching those conclusions”). We review for an abuse of discretion
the manner in which the district court exercises its Daubert “gatekeeping” role in
deciding whether to admit or exclude survey evidence. See Bitler, 400 F.3d at
(continued...)

18
 Of course, Vail is a ski destination. Newton testified that callers, regardless

of whether they contacted her agency through 1-800-SKI-VAIL or in some other

manner, sometimes inquired about weather, grooming, and ski passes “with no

reference to any specific company.” App. at 639. That is hardly surprising given

a significant number of people travel to Vail to ski during the winter months.

Furthermore, Newton specifically stated: “In my opinion, most people can’t

necessarily identify a specific company with the purchase of their ski vacation

products. They are familiar with [a] place to ski, as a place, not [as] a company.”

App. at 639 (emphasis added). That too seems unremarkable. 9

8
(...continued)
1232. A careful review of the record in light of the applicable law makes clear
the district court most assuredly did not abuse its discretion in excluding from
trial VA’s survey evidence. See id. (“We will not disturb a district court’s
[Daubert] ruling absent our conviction that it is arbitrary, capricious, whimsical,
manifestly unreasonable, or clearly erroneous.”). At the hearing, VTC introduced
the unrebutted testimony of Daniel Hoffman, a Professor of Marketing at the
University of Denver with twenty-two years of marketing research experience.
See App. at 308-31. To make a long story short, Hoffman testified that VA’s
survey suffered from systematic design flaws and utterly failed to comply with
generally accepted survey principles. App. at 315, 317-18, 325. The survey
suffered from question bias, interviewer bias, location bias, participant bias, and
timing bias. App. at 314 (participant/target population bias), 318 (location bias),
319-25 (question bias), 328 (timing bias), 330 (interviewer bias). Hoffman
“[a]bsolutely” believed these survey flaws “stack[ed] the deck in favor of [VA’s]
perspective.” App. at 326.
9
The dissent relies heavily on the fact that consumers who called 1-800-
SKI-VAIL asked about “season passes, directions to Vail, weather, grooming,
restaurants, and ski rental.” Dissent at 12. VA, however, offered not one shred
of evidence suggesting that consumers are more likely to call a ski resort than the
chamber of commerce, a travel agency, or some other information source to
(continued...)

19
 As the dissent recognizes, consumers need not have knowledge of the

particular company behind a service source before confusion may occur. Consumers,

however, must associate the company’s mark with its services. Nothing in Newton’s

testimony suggests that consumers phoning 1-800-SKI-VAIL routinely, or even more

than occasionally, thought they were phoning the service provider represented by the

“Vail” mark. That consumers phoning the number sought information about skiing

in Vail, Colorado tells us only that those consumers knew they could ski in or near

Vail. To reiterate, Vail is a ski destination. Those consumers’ anticipated inquiries

regarding skiing in Vail tell us nothing about whether those same consumers

identified the name “Vail” with the ski resort or the geographic designation.10 See

Thomas J. McCarthy, McCarthy on Trademarks and Unfair Competition § 15:11, at

15-22 (4th ed. 2007) (hereinafter McCarthy) (“[T]he buyer, to be deceived, must be

looking for some symbol which he thinks identifies a single, albeit anonymous,

source.”). That leads us to a discussion of the strength of the “Vail” mark.

9
(...continued)
inquire about such matters. In fact, Newton testified that consumers phoning her
travel agency directly would ask questions “all the time” about grooming and
ticketing. App. at 631. Furthermore, that some callers asked about things not
exclusively associated with a ski resort, e.g., directions, restaurants, weather, and
rentals, permitted the district court to conclude that those callers believed they
were calling a general information number rather than the resort itself.
10
The dissent’s reliance on Newton’s testimony that she would frequently
redirect calls from 1-800-SKI-VAIL to VA when her travel agency did not offer
the service the caller requested or her agency’s information about ski conditions
was incomplete tells the fact finder absolutely nothing about the subjective belief
or knowledge of consumers calling the number. See Dissent at 13.

20
 B.

Perhaps the second most important factor for our consideration is the strength

of Vail as a service mark. On this point VA fares no better because nothing in the

record or applicable law suggests the district court clearly erred in finding the Vail

mark is not particularly strong. To be sure, the Vail mark has secondary meaning.

See Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 194 (1985)

(recognizing a descriptive mark may be registered only upon a showing that the mark

has acquired secondary meaning). 11 A likelihood of confusion over a descriptive

term can never exist absent secondary meaning. See McCarthy, supra § 14:9, at 14-

35. The presence of secondary meaning, however, does not provide the mark holder

with an exclusive right to use the mark in its original descriptive sense. Secondary

meaning provides the mark holder “an exclusive right not in the original, descriptive

sense, but only in the secondary one associated with the mark holder’s goods.” KP

Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 122 (2004).

Both VA and the dissent assert the Vail mark is strong because it has acquired

11
Descriptive terms, including geographically descriptive terms such as
“Vail,” qualify for registration as trade or service marks only after taking on
secondary meaning as “distinctive of the applicant’s goods in commerce.” 15
U.S.C. § 1052(f). “[P]roof of substantially exclusive and continuous use thereof
as a mark by the applicant in commerce for five years before the date on which
the claim of distinctiveness is made” constitutes prima facie evidence that a mark
has acquired secondary meaning. Id.

21
secondary meaning associated with “world-class ski resort services.” 12 Dissent at 23.

To illustrate the fallacy of such conclusion, we need only examine the record

evidence regarding the strength of the Vail mark’s secondary meaning vis-a-vis its

primary meaning. “Secondary meaning and likelihood of buyer confusion are

separate but related determinations, the relationship rising from the same evidentiary

findings. The stronger the evidence of secondary meaning, the stronger the mark,

and the more likely is confusion.” Levi Strauss & Co. v. Blue Bell, Inc., 632 F.2d

817, 821 (9th Cir. 1980) (Markey, C.J., sitting by designation). If VA had introduced

convincing evidence that consumers were actually confused by the 1-800-SKI-VAIL

mark, then necessarily its Vail mark would have a strong secondary meaning. See

McCarthy, supra § 15:11, at 15-21. On the other hand, the fact that VA proved

secondary meaning by evidence other than actual confusion “does not necessarily

mean that confusion is likely. . . . While evidence of confusion is probative of

secondary meaning, non-confusion evidence of secondary meaning does not

necessarily prove likely confusion caused by defendant’s use.” Id. (emphasis added).

In this case, the district court as the trier of fact properly found the Vail mark

was not particularly strong because VA’s evidence of secondary meaning was not

12
The dissent points out VA presented testimony that Ski Magazine “has
ranked Vail the number one ski resort in thirteen of the last seventeen years.”
Dissent at 23. As yet another example of the ineffective manner in which VA
tried this case, VA presented no evidence as to the circulation of Ski Magazine,
the regard in which likely consumers of VA’s services hold the magazine, or the
percentage of those consumers that read the magazine.

22
particularly strong. As previously detailed, the record contains little, if any,

evidence that consumers actually confuse 1-800-SKI-VAIL with VA and its ski

resort facilities. The registration and incontestability of the Vail mark were VA’s

primary evidence of secondary meaning. Indeed, one cannot challenge the secondary

meaning of an incontestable mark. See Park ‘N Fly, 469 U.S. at 191 (holding an

incontestable mark may not be challenged on the ground the mark is merely

descriptive). Yet “[t]he fact that a trademark is the subject of a federal registration

that has ripened into incontestable status should not dictate the conclusion that the

mark is strong with no further analysis.” McCarthy, supra § 11:82, at 11-166. As

the preceding paragraph explains, “non-confusion evidence” of secondary meaning

is not particularly forceful when determining the likelihood of confusion.

VA did offer testimony through Chris Jarnot that it spends around $3 million

a year promoting the Vail Resort and its ski facilities. But VA was unable to say

how much it spent marketing the word Vail apart from its stylized logo. See App.

at 492-93; supra n. 2. The district court was certainly entitled to conclude VA spent

very little marketing the word Vail apart from its stylized logo. While evidence of

a mark’s promotion is relevant to prove the strength of a mark, “standing alone

without a context such evidence may not be sufficient to prove that a mark is very

strong.” McCarthy, supra §11:83, at 11-170.

Kenneth Germain, VTC’s expert, testified that while the Vail mark was quite

strong in the area of ski resort services, the geographically descriptive nature of the

23
mark coupled with its extensive use by third parties substantially undermined its

strength. App. at 874. Such a view is consistent with our precedents:

A strong trademark is one that is rarely used by parties other than the
owners of the trademark, while a weak trademark is one that is often
used by other parties. The greater the number of identical or more or
less similar trademarks already in use on different kinds of goods, the
less is the likelihood of confusion between any two specific goods
incorporating the weak mark.

Universal Money Ctrs., 22 F.3d at 1533; accord King of the Mountain Sports, 185

F.3d at 1093. In other words: “Use by others of a similar mark will tend to dilute

any consumer recognition and association of that mark with the alleged owner. Such

use by third parties is therefore relevant to the issue of secondary meaning.”

McCarthy, supra § 15:27, at 15-41. In Universal Money Ctrs., 22 F.3d at 1533-34,

we recognized this very point and quoted with approval the district court’s finding

that “the evidence . . . indicates that the term “Universal” is widely used by parties

other than [plaintiff]. . . . Dun and Bradstreet shows over 200 active businesses

employing the term. In short, the term is used by a significant number of entities and

is thus a relatively weak mark.”

Despite the foregoing analysis, VA and the dissent suggest the word “Vail”

“conjures a mental association with [ski resort] services in buyers’ minds.” Dissent

at 25. Perhaps so, but VA did not prove it. We find little in the record to support

the view that consumers routinely associate the word “Vail” with VA’s ski resort

services. More importantly, we find no support in the record for the conclusion that

24
the district court’s contrary finding was clearly erroneous. The lack of actual

confusion evidence, the geographically descriptive nature of the word Vail, and its

documented use among numerous businesses in the Vail area, all support the district

court’s finding that the Vail mark is not particularly strong.

C.

The district court also found nothing in the record to suggest VTC intended

to trade on VA’s service mark or deceive the public into believing that the operator

of the Vail ski facilities provided VTC’s marketing service. Once again, the record

evidence, properly considered, amply supports the district court’s finding. Eric

Hanson testified at length that neither he nor any company with which he was

affiliated, including VTC or any of its employees, ever intended to derive any benefit

from VA’s reputation or goodwill. App. at 826-27. The district court certainly was

entitled to assess the credibility of Hanson’s testimony. This Court is not free to

reject that assessment under the clearly erroneous standard. See Salve Regina

College v. Russell, 499 U.S. 225, 233 (1991) (“In deference to the unchallenged

superiority of the district court’s fact finding ability, Rule 52(a) commands that . . .

‘due regard shall be given to the opportunity of the trial court to judge the credibility

of the witnesses.’”).

Neither, under the applicable review standard, are we free to reject the district

court’s assessment of the testimony of VTC’s expert, Kenneth Germain. Germain

testified he found no evidence VTC or Hanson intended to utilize VA’s reputation

25
in employing the 1-800-SKI-VAIL mark: “One doing business in and around Vail,

Colorado pretty much has to use the word Vail to get the idea across.” App. at 876;

see Restatement (Third) of Unfair Competition § 14, cmt. d (1995) (“[M]erchants

should remain free to indicate their place of business or the origin of their goods [or

services] without unnecessary risk of infringement.”). Germain further opined that

VTC’s use of the word ski in connection with Vail made perfect sense: “I think

skiing of course is a generic term in the area. I mean it’s what one does. So it

makes perfect sense to use it.” 13 App. at 877.

13
In the course of discounting the testimony of VTC’s expert, the dissent
asserts he “ignores that when one skis in Vail, one skis at Vail Associates’
resort:”

The expert testified that he was not a skier, that he had only visited
Vail in the summer, and the he was not aware whether one could ski
in Vail other than through Vail Associates. Conversely, VTC’s
intent to create confusion was directed at consumers seeking a ski
vacation, people who would be far more familiar than VTC’s expert
with the specific, non-generic meaning created by the combination of
the words “ski” and “Vail.”

Dissent at 8. The dissent’s point is quite appropriate for cross-examination or
closing argument. At the appellate stage, however, the dissent’s language is
nothing short of an improper attack on the expert’s credibility and qualification,
designed to justify the dissent’s skewed view of his testimony, and all the more
remarkable because VA did not present the testimony of a single person who had
sought a ski vacation at VA’s ski resort. We can only reiterate that credibility
determinations are for the district court. Furthermore, the rules of evidence
“assign to the district court the job of deciding whether an individual is
sufficiently qualified to testify as an expert, by virtue of training and experience .
. . , subject of course to a tailored review in this court.” Watson v. United States,
485 F.3d 1100, 1105 (10th Cir. 2007). VA has not asked us to undertake such a
(continued...)

26
 Further commenting on VTC’s lack of intent to trade on the good name of VA,

Germain explained none of VTC’s advertising materials, printed or electronic,

referred to VA or its properties. Rather such materials promoted a “potpourri of

hotels and other providers of services in and around Vail.” App. at 877. Germain

also noted VTC’s mark was originally part of a portfolio of twenty-plus 1-800 ski

numbers containing both the word ski and a geographical designation. Germain

thought this significant because the “broader picture” lessened the probability that

VTC intended to trade off VA’s Vail mark. Consistent with this view, the record

reflects the first 1-800 ski number placed in use was not 1-800-SKI-VAIL, but rather

1-800-SKI-ASPEN. App. at 924. During the 1995-1996 ski season, 1-800-SKI-

STEAMBOAT, 1-800-SKI-SUMMIT, 1-800-SKI-ASPEN, 1-800-SKI-TAHOE, and

1-800-SKI-VAIL were all up and running. App. at 766.

The dissent’s suggestion that the district court clearly erred in refusing to infer

a wrongful intent on the part of VTC proves too much. Intent is a question of fact

which lies within the purview of the fact finder, in this case, the district court. And

the district court, taking a permissible view of the evidence, found VTC, by

13
(...continued)
review in any particularized sense. The entirety of Germain’s testimony
contradicts the dissent’s view that “[b]y incorporating the name of Vail, a major
ski resort, into a toll-free telephone number, VTC hoped to capitalize on Vail
Resort’s reputation as an attractive ski destination.” Dissent at 6. Of course,
saying the VTC “hoped to capitalize on Vail Resort’s reputation” is another way
of saying VTC intended to do so.

27
incorporating the name Vail into a toll-free telephone number, hoped to capitalize,

not on Vail Resort’s reputation, but rather on Vail, Colorado’s reputation as an

attractive ski destination. See Baum v. Great Western Cities, Inc., 703 F.2d 1197,

1210-11 (10th Cir. 1977) (“Questions of intent which involve intangible factors,

including witness credibility, are matters for consideration of [the] fact finder after

a full trial.”). In fact, the record reveals VA offered little direct evidence of VTC’s

wrongful intent. As the foregoing recitation of the evidence well illustrates, the

record clearly supports the district court’s view that 1-800-SKI-VAIL trades on Vail

as a geographic ski destination, rather than on Vail as a mark identifying VA and/or

its ski resort.

D.

That brings us to the similarity, or, perhaps more accurately, dissimilarity of

the marks. The degree of similarity between marks turns upon sight, sound, and

meaning. See Sally Beauty, 304 F.3d at 972. The similarity between two marks is

an important factor in trademark infringement analysis because one’s adoption of a

mark similar to a preexisting mark not only bears independently upon the likelihood

of confusion, but also may support an inference that one intended to draw upon the

reputation of the preexisting mark. See Beer Nuts, Inc. v. Clover Club Foods Co.,

805 F.2d 920, 927-28 (10th Cir. 1986) (explaining that intent to draw upon a

preexisting mark may be inferred from similarity).

In its opening brief, VA asserts:

28
 1-800-SKI-VAIL is very similar to the VAIL mark in sight, sound and
meaning. Defendants added 1-800-SKI to the Plaintiff’s mark, but this
hardly alters the conclusion. 1-800 is simply a generic prefix for a toll
free telephone number. SKI is not only generic; as used by Defendants
it brings to mind the very downhill skiing facilities for which Plaintiff’s
VAIL mark is world renowned.

VA’s position, which the dissent readily accepts, presupposes two critical facts,

neither of which VA offered into evidence: (1) consumers calling 1-800-SKI-VAIL

know that only one ski resort exists in Vail, and (2) those same consumers know the

word Vail means that ski resort. A consumer unaware of those particular facts would

not likely be confused when phoning 1-800-SKI-VAIL because that consumer could

not be confused about facts of which he or she is unaware. In other words,

consumers cannot dial an alphanumeric phone number believing it to be associated

with VA and/or its ski resort facilities if they have no knowledge of VA’s mark in

any particularized sense. See McCarthy, supra § 15-11, at 15-23 (“[A] buyer who

does not recognize plaintiff’s ‘mark’ and does not distinguish it from any other,

cannot be confused.”). The record simply does not show the ordinary consumer

dialing 1-800-SKI-VAIL possesses such particularized knowledge – knowledge of

“secondary meaning” requisite to any resultant confusion between the two marks.

By assuming consumers possess such knowledge, the dissent, in effect, proposes to

relieve VA of its burden of proof. See Dissent at 5.

Equally troubling is VA’s and the dissent’s emphatic reliance on the word

“ski” to support the conclusion that the two marks are similar. VA has no

29
proprietary rights in the word “ski.” VA could have sought service mark protection

from PTO for the phrase “Ski Vail,” but it did not. VA chose instead to sweep much

more broadly, seeking service mark protection only for the word “Vail.” VA

essentially asks us to grant it a new service mark – “Ski Vail.” VA’s approach is in

tension with binding precedent. In Sally Beauty, 304 F.3d at 973, we explained the

district court erred by shortening “Generic Value Products” to simply “Generic”

when comparing “aural similarities” with “GENERIX.” We wrote: “The district

court cited no authority which would permit the shortening of the trademark for

likelihood of confusion analysis.” Id. So too VA fails to cite any authority for

truncating 1-800-SKI-VAIL to simply VAIL and then comparing the two marks. No

one part of an alphanumeric mark can take precedence over the other parts of the

mark. Id. (explaining that in a word mark, “no one word takes precedence over the

others”); see also Universal Money Ctrs, 22 F.3d at 1531 (concluding “AT&T

Universal Card” did not sound like “Universal Money,” notwithstanding both marks’

use of the word “Universal”).

Like the aural similarities, the visual similarities between 1-800-SKI-VAIL

and Vail are minimal. In Sally Beauty, 304 F.3d at 972, we reasoned: “‘Generic

Value Products’ . . . is not visually similar to ‘GENERIX.’ [The former mark]

consists of three words, while [the latter mark] consists of only one. Although both

marks begin with the same six letters, this similarity is not enough to outweigh the

visual differences in the marks.” In this case, Germain’s testimony as to the

30
similarities between the two marks at issue is entirely consistent with our analysis

of the marks in Sally Beauty: “Vail is a single word. . . . 1-800-Ski-Vail is four

components. It’s obviously a long distance telephone number. It includes Vail as

one component, but it’s only one of four. Indeed, it’s the last. They’re quite

different from each other.” App. at 875. Needless to say, the word Vail is not a long

distance telephone number. VA’s mark does not contain the word ski and contains

no numbers or hyphens. In sum, a comparison of the two marks in light of the record

evidence and applicable law does not establish that the marks are particularly similar

in sound, sight, or meaning.

E.

Considering the nature of the parties’ services and the manner in which they

market them, the record further belies the notion that VA and VTC compete with

each other. VTC’s expert, Germain, characterized the parties’ relationship as “sort

of symbiotic.” App. at 882. In other words, both VA and VTC would benefit from

a relationship where VTC marketed VA’s services. That is because VTC, unlike VA,

is not in the ski resort business. The services which 1-800-SKI-VAIL provides are

at least one step removed from the services VA provides. Compare Beer Nuts, 805

F.3d at 926 (involving two directly competing companies marketing identical goods,

sweetened salted peanuts, in the same manner).

As the district court found, 1-800-SKI-VAIL serves as a conduit, much like

a travel agency, to bring consumers desirous of visiting Vail and the surrounding

31
area together with service providers in the region. Apart from the short time that VA

ceased doing business with Vacation Coordination on account of the affidavit

controversy with Joyce Newton, nothing in the record suggests travel agencies to

which 1-800-SKI-VAIL calls were routed were unable to book VA’s properties. As

VTC’s expert explained, VTC’s business of bringing consumers to Vail, for the most

part, benefitted VA: “[D]efendant’s service helps to bring people to the Vail area,

and that’s probably good for Vail Resorts, . . . not to the Vail Resort hotel facility

per se, but to the ski area, to the mountain . . . .” App. at 882. Our standard of

review simply does not permit us to discount expert testimony which the district

court obviously credited.

The record further reflects that the respective manner in which the parties

market their services is not particularly similar. Like each of the six factors, we

must consider the similarity between the parties’ marketing efforts in light of the

overarching purpose of our inquiry – determining whether consumers are likely to be

confused as to the origin of the service. In this regard, VTC marketing strategy

never sought to pass off its services as the same type of high end services VA

offered. Rather, radio ads for 1-800-SKI-VAIL billed the number as the “one call

. . . to make all of your travel plans.” App. at 761-62. The brochures/directories

promoting 1-800-SKI-VAIL were telephone directories through which callers could

access information about ski conditions, weather, and events, and be connected with

area businesses. See App. at 907-22. Viewing the evidence in its entirety, VTC’s

32
marketing of 1-800-SKI-VAIL portrayed the number as precisely what it was: an

easy-to-use number that connected callers to a variety of services.

At the same time, VA operated under a multi-million dollar marketing budget

and marketed its resort services world-wide in a sophisticated manner. VTC was a

pauper by comparison, pursuing a cost efficient marketing strategy for 1-800-SKI-

VAIL that is entirely different from that employed by VA. For instance, VTC’s

predecessor, 1-800-Ski-Numbers, at one point advertised its number through print

directories listing a “potpourri of hotels and other providers of services in and around

Vail.” App. at 876. Eric Hanson testified extensively as to the early marketing

strategy for 1-800-Ski Numbers. See, e.g., App. 759-70. Due to cost constraints,

that strategy never fully came to fruition. The idea that the similarity of the parties’

services and the manner in which they market them support a finding of likelihood

of confusion is dubious at best. The district court certainly was entitled to find the

aforementioned differences outweighed the similarities.

F.

The sixth and final factor bearing upon our likelihood of confusion analysis

is the degree of care the consuming public uses in selecting the various services at

issue. When consumers exercise a high degree of care in selecting services, the

likelihood of confusion shrinks. Sally Beauty, 304 F.3d at 975. Traditionally, our

inquiry has focused on “the consumer’s degree of care exercised at the time of

purchase.” Id. (explaining “items purchased on impulse are more likely to be

33
confused than expensive items, which are typically chosen carefully”). But that

does not assist VA because its properties provide first class accommodations at first

class prices. Ski excursions to Vail, Colorado are not cheap, and consumers

undoubtedly choose carefully.

As such, initial interest confusion might lend support to VA’s cause. The

dissent certainly thinks so. See Dissent at 20-21. Initial interest confusion is a “bait

and switch” tactic that permits a competitor to lure consumers away from a service

provider by passing off services as those of the provider, notwithstanding that the

confusion is dispelled by the time of sale. See Syndicate Sales, Inc. v. Hampshire

Paper Corp., 192 F.3d 633, 638 (7th Cir. 1999); see also Australian Gold, 436 F.3d

at 1238-39. But a court cannot simply assume a likelihood of initial interest

confusion, even if it suspects it. The proponent of such a theory must prove it. See

McCarthy, supra § 23:6, at 23-30 (“[E]ven if the marks are almost identical, initial

interest confusion is not assumed and must be proven by the evidence.”). Until then,

it remains just a theory. At the risk of sounding repetitive, VA simply failed to

prove its theory of the case. We have seen that the evidence of actual initial interest

confusion, which VA sought to introduce through Joyce Newton alone, was minimal

and highly suspect. Compare Beer Nuts, 805 F.2d at 928 (explaining that a lack of

actual confusion evidence is more understandable when the products and services

involved are inexpensive because purchasers are less likely to inform the trademark

owner when confusion arises over such products and services).

34
 Admittedly, consumers exploring ski vacation options will not exercise

extraordinary care when dialing a toll-free number. Those same consumers,

however, are the very consumers who are unlikely to associate the word “Vail” with

VA’s ski resort services, thus negating the possibility of any confusion. See supra

at 29 (“[C]onsumers cannot dial an alphanumeric phone number believing it to be

associated with VA and/or its ski resort facilities if they have no knowledge of VA’s

mark in any particularized sense.”). As for more sophisticated consumers, we doubt

whether they would phone 1-800-SKI-VAIL at all. Such consumers would be more

apt to contact the Vail Resort directly. But even assuming they phoned 1-800-SKI-

VAIL, any initial confusion is unlikely to result in sophisticated consumers booking

services elsewhere.

III.

By now we know the record contains little credible evidence of actual

consumer confusion between the alphanumeric number 1-800-SKI-VAIL and the

word Vail. We know the evidence has not established VA’s Vail mark as

particularly strong. We know the record is replete with evidence suggesting that

neither VTC nor Hanson ever intended to trade on VA’s reputation. We know the

sight, sound, and meaning of the two marks are not irrefutably similar. We know

VA’s and VTC’s respective services and the manner in which they market them

differ in important respects. We know consumers exercise a high degree of care

when planning ski vacations, mitigating confusion that might initially exist between

35
the marks.

Simply stated, none of the six fact-bound factors we consider in determining

the likelihood of confusion, when viewed in light of the record before us, favor VA

to any significant degree, if at all. Thus, the district court’s finding that VA failed

to prove likelihood of confusion in this case cannot be clearly erroneous. We refuse,

on the basis of the record before us, to deprive VTC of the “ordinary utility of

descriptive words.” KP Permanent Make-Up, 543 U.S. at 122. If some confusion

exists, such is the risk VA accepted when it decided to identify its services with a

single word that is primarily descriptive of a geographic location. See id. The law’s

tolerance of a certain degree of confusion on the part of consumers flows from “the

undesirability of allowing anyone to obtain a complete monopoly on use of a

descriptive term simply by grabbing it first.” Id.

We decline to extend unwarranted service mark protection to VA on what the

record tells us is first and foremost a geographical term describing a ski destination

in the Colorado Rockies. Such extension would imperil the countless number of

retailers, merchants, and innkeepers in and around Vail who use the town’s name to

promote their wares and services. 14 In the end, VA’s lack of evidence suggesting a

14
Indeed, at oral argument, counsel for VA, who no more wanted to talk
about the record evidence than a hog wants to talk about bacon, opined that VA
would be well within its rights under the Lanham Act to pursue claims of mark
infringement against such retailers, merchants, and innkeepers. According to
counsel, VA declined to do so only as a “matter of policy.” The numerous
(continued...)

36
likelihood of confusion could lead one to suspect VA’s concern is really about

“disconnecting” an alphanumeric phone line which provides easy access to VA’s

actual service competitors. The record evidence simply belies any notion that VA’s

Lanham Act claim is about the likelihood of confusion. Rather VA’s claim appears

more about limiting access to its competition by squelching a conduit which provides

easy, free, and readily available access to that competition through use of a vanity

or alphanumeric phone number. Because the factual record, viewed in a light most

favorable to the district court’s judgment, supports the court’s finding that VA failed

to prove a likelihood of confusion, the district court’s judgment is

AFFIRMED.

14
(...continued)
businesses in the region using the word Vail as a marketing tool surely find small
comfort in such knowledge.

37
No. 05-1058, Vail Associates, Inc., and Vail Trademarks, Inc. v. Vend-Tel-Co.,

Ltd., and Eric A. Hanson

TYMKOVICH, J., dissenting.

The two marks in this case are confusingly similar. Because the district

court erred in its analysis of the Sally Beauty factors, I would find in favor of Vail

Associates, Inc. and Vail Trademarks, Inc. (together “Vail Associates”) on the

trademark infringement claim.

Trademark infringement under the Lanham Act results from “[t]he

unauthorized use of ‘any reproduction, counterfeit, copy, or colorable imitation’

of a registered trademark in a way that ‘is likely to cause confusion’ in the

marketplace concerning the source of the different products.” Australian Gold,

Inc. v. Hatfield, 436 F.3d 1228, 1238 (10th Cir. 2006) (quoting 15 U.S.C.

§ 1114(1)). This protection against confusion concerning the source of a product

or service also extends to confusion with regard to affiliation, connection,

association, sponsorship, or approval. Lanham Act § 43(a), 15 U.S.C. § 1125.

I agree with the majority that the district court properly identified the

factors relevant to assessing the likelihood of consumer confusion. These factors

are (1) the degree of similarity between the marks; (2) the intent of the alleged

infringer in adopting the mark; (3) evidence of actual confusion; (4) similarity of

products and manner of marketing; (5) the degree of care likely to be exercised by

purchasers; and (6) the strength or weakness of the marks. Sally Beauty Co. v.
Beautyco, Inc., 304 F.3d 964, 972 (10th Cir. 2002). But I conclude the district

court erred in its analysis of these factors.

“A finding is clearly erroneous ‘when although there is evidence to support

it, the reviewing court on the entire evidence is left with the definite and firm

conviction that a mistake has been committed.’” Naimie v. Cytozyme Lab., Inc.,

174 F.3d 1104, 1112 (10th Cir. 1999) (quoting Anderson v. Bessemer City, 470

U.S. 564, 565 (1985)). The assessment for clear error depends on the totality of

the record, and the “court’s failure to weigh all of the relevant factors in

determining likelihood of confusion constitutes reversible error.” Beer Nuts, Inc.

v. Clover Club Foods Co., 711 F.2d 934, 942 (10th Cir. 1983). “At all times . . .

the key inquiry is whether the consumer is likely to be deceived or confused by

the similarity of the marks.” Team Tires, 394 F.3d at 833 (internal quotations

omitted).

After a thorough review of the record in light of the Sally Beauty factors, I

am convinced Vail Associates met its burden of proving a likelihood of

confusion. Because each Sally Beauty factor weighs in favor of Vail Associates,

the district court should have found in its favor.

1. Similarity Between the Marks

“The degree of similarity between marks rests on sight, sound, and

meaning. This court must determine whether the allegedly infringing mark will

confuse the public when singly presented . . . .” Sally Beauty, 304 F.3d at 972.

-2-
 The district court focused on several inquiries related to similarity and

decided they weighed in favor of defendants Vend-Tel-Co., Ltd. and Eric A.

Hanson (together “VTC”). First, the district court discussed the overall

description of the VAIL mark, noting the mark does not exist in isolation but is

often accompanied by a unique logo. While the logo is distinctive, in this case

that is of little significance because the infringing use is a phone number and Vail

Associates alleges infringement of the word mark alone. Second, the district court

also noted the parties’ marks are visually distinct because phone numbers

advertising Vail Associates’ products are 1-888 numbers, not 1-800 numbers.

I do not consider this a major distinction.

The court’s primary conclusion with regard to similarity of sight, sound and

meaning found the combination of “ski” and “Vail” was no more infringing than

using VAIL by itself. “The word ‘ski’ is a . . . verb, meaning to glide over snow.

. . . The Vail Associates’ skiing facilities may be considered unique, but the

activity of skiing is not uniquely available at their Vail resorts . . . .” Aplt. App.

445. The district court’s analysis of this key factor erred by ignoring the overall

meaning of VTC’s mark for the consumer. The majority notes Vail Associates’

VAIL mark is only one element of four in comparison to VTC’s 1-800-SKI-VAIL

mark, but we judge the similarity between two marks “by the total impression

created by the designations and not by a comparison of the individual features.

Although individual features may be dissimilar, the total effect of the two

-3-
designations may be similar.” Restatement (Third) of Unfair Competition § 21

cmt. c (1995) [Restatement]. “To the extent that the similarity of mental

impression dominates over the dissimilarities in appearance, a likelihood of

confusion may result.” Restatement § 21 cmt. f.

The other three elements of VTC’s mark only serve to emphasize the

meaning for which Vail Associates trademarked VAIL. VTC’s inclusion of the

term “ski” in an alphanumeric telephone number goes to the heart of Vail

Associates’ business and creates a confusingly similar meaning. Contrary to the

district court’s finding, the use of the word “ski” in this context does not simply

describe the activity of gliding over snow. Instead, the word “ski” sets aside a

perception that VTC’s services are generically associated with the geographic

area of Vail and directly links VTC’s business in the consumer’s mind to the Vail

Resort. Neither does the numerical prefix of VTC’s mark distinguish its meaning.

The numbers simply indicate to the consumer that the mark is a means of

contacting through a toll-free phone number the entity that offers skiing in Vail.

Because only one ski resort exists in Vail, a consumer calling VTC can have only

one thing in mind: skiing at the Vail Resort. 1

1
The majority suggests I presuppose critical facts: (1) consumers calling
1-800-SKI-VAIL know that only one ski resort exists in Vail, and (2) those same
consumers know the word Vail means that ski resort. But when determining the
likelihood of confusion, we consider “the characteristics of the prospective
purchasers of the goods or services.” Restatement § 21(c). Specifically, we
(continued...)

-4-
 Thus the additional elements of the 1-800-SKI-VAIL mark only serve to

emphasize to the consumer the importance of VAIL, the portion of the mark that

is identical in sight and sound to Vail Associates’ mark. The “sight, sound, and

meaning” of 1-800-SKI-VAIL strongly suggests to typical consumers that they

are accessing the services of Vail Associates.

2. Intent

“Proof that a defendant chose a mark with the intent of copying plaintiff’s

mark, standing alone, may justify an inference of confusing similarity.” Beer

Nuts, 711 F.2d at 941 (internal citations omitted). The key inquiry “is whether

defendant had the intent to derive benefit from the reputation or goodwill of

plaintiff.” Jordache Enters. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1485 (10th Cir.

1987) (internal citations omitted). The district court concluded “[t]here is nothing

in this record to suggest that [VTC] had the intention of trading on the Vail

Associates’ trademark or intended to deceive the public into believing that the

1
(...continued)
consider “hypothetical purchasers operating in the market context in which the
designations are used.” Restatement § 20 cmt. g. In the market context at issue,
people calling 1-800-SKI-VAIL must be sufficiently interested in skiing to be
considering a ski vacation. Not even VTC suggests a typical consumer would call
1-800-SKI-VAIL to organize a spelunking expedition near Colorado Springs,
though that is evidently one of the options the 1-800-SKI-VAIL service offered at
one time. Given the evidence Vail associates presented—including Vail’s
prestige in Ski Magazine resort rankings, Vail Associates’ extensive marketing
efforts, and the acknowledgment by VTC’s expert that Vail is a world-renowned
ski resort—a typical caller would only dial 1-800-SKI-VAIL because they were
interested in skiing at the famous resort called Vail. Aplt. App. 466, 480.

-5-
marketing service was provided by Vail Associates or the owners and operators of

Vail ski facilities.” Aplt. App. 447. The district court erred by failing to infer

intent from the similarity of the marks and other evidence.

VTC by its own admission intended to procure telephone numbers that use

“the name of a major ski resort or other marketable word.” Aplt. App. 924–25.

By incorporating the name of Vail, a major ski resort, into a toll-free telephone

number, VTC hoped to capitalize on Vail Resort’s reputation as an attractive

destination and provide people interested in visiting the resort with a means of

contacting, not the resort, but businesses affiliated with VTC. “One who adopts a

mark similar to another already established in the marketplace does so at his peril,

because the court presumes that he can accomplish his purpose: that is, that the

public will be deceived. All doubts must be resolved against him.” Beer Nuts,

711 F.3d at 941. VTC clearly desired to trade on the name Vail as a ski

destination, an inference supported by their use of a mark already established in

the marketplace. See Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920,

928 (1986) (holding courts should infer intent from similar marks).

The only doubt about intent VTC raises is that the word “Vail” is a

geographic place as well as the name of a famous ski resort. On the record, this

doubt must be resolved against VTC because their phone number does not simply

use “Vail” as a geographic descriptor. True, the success of VTC’s business

depended on the ability to inform potential customers that they offered travel

-6-
services for the Vail area. 2 But VTC’s use went a step too far by exploiting the

combination of “ski” and “Vail” in their alphanumeric number. By doing so, they

chose to tie their services to skiing at the Vail Resort.

The majority suggests the district court could have determined Vail

Associates presented no evidence of intent based on the testimony of VTC’s

expert on trademark law, who testified that “ski” and “Vail” are both generic

terms, and VTC’s use of those terms provides no evidence of an intent to infringe

on Vail Associates’ mark. The expert testified, “Well, skiing is kind of what

people do in Vail. It is the main attraction. . . . I think that skiing of course is a

generic term in the area. I mean, it’s what one does.” Aplt. App. 886–87. The

expert’s testimony, however, ignores that when one skis in Vail, one skis at Vail

Associates’ resort. The expert testified that he was not a skier, that he had only

visited Vail in the summer, and that he was not aware whether one could ski in

2
It is nevertheless worth noting that VTC’s use of “Vail” is not like the
numerous businesses actually located in Vail that use the word as a descriptor of
the business’s geographic location. At various times, the 1-800-SKI-VAIL
number was routed to travel agencies not in Vail or the Vail Valley, but in Winter
Park, Colorado and in California, although the service was also at various times
answered by a travel agency in Vail and the Vail Valley Tourism and Convention
Bureau. Furthermore, a directory of services offered through 1-800-SKI-VAIL
included advertisements for many services far flung from the Vail Valley,
including Cave of the Winds, an attraction located near Colorado Springs,
Colorado; Ski Sunlight, a ski area in Glenwood Springs, Colorado; and Bighorn
Development, a real-estate company in Fort Collins, Colorado. Although the
parties do not raise this issue, I note terms that are deceptively misdescriptive of
geographic location are not entitled to trademark protection. Lanham Act § 2(e),
15 U.S.C. § 1052(e).

-7-
Vail other than through Vail Associates. Conversely, VTC’s intent to create

confusion was directed at consumers seeking a ski vacation, people who would be

far more familiar than VTC’s expert with the specific, non-generic meaning

created by the combination of the words “ski” and “Vail.” See 4 J. Thomas

McCarthy, McCarthy on Trademarks and Unfair Competition § 23:5 (4th ed.

1996) [McCarthy] (“A potential customer is one who might some day purchase

this kind of product or service and pays attention to brands in that market. For

example, in a case concerning similar marks used on recreational sailboats, the

possible confusion of a person who has no interest in boats at all is not relevant.”)

The expert also testified VTC “us[ed the word “Vail”] as a way of telling

people that his telephone marketing service relates to Vail, Colorado and

environs.” Aplt. App. 875. But by adding the word “ski,” VTC informed

consumers that their service related more specifically to skiing in Vail, not just to

general services in the geographic region of Vail. By combining the terms “ski”

and “Vail” in a phone number, VTC could only have intended to evoke the

particular skiing experience at the only ski resort in Vail and named Vail. VTC

confounds the obvious implication of the combined terms.

Furthermore, the record provides additional indications of intent. First,

VTC attempted to sell the vanity number to Vail Associates, and Hanson testified

he thought Vail Associates could increase their revenues by using the number,

even though VTC was not able to make profitable use of it. These circumstances

-8-
indicate VTC knew the vanity number took advantage of Vail Associates’ already

established ski resort business.

Second, VTC represented in its application to the PTO that the mark was

not descriptive but “appears calculated to convey to the average consumer that it

is an identifier of a company’s services.” Aplt. App. 964. But the service the

mark most obviously identifies is skiing in Vail. Hanson testified the mark was

intended to identify a phone switching service: “We’re a conduit. There’s callers

out over here on this side of the table. We’re the conduit through our phone

switching system to get to this end over here. . . . What we sell is the conduit

here.” Aplt. App. 850. But by choosing to identify the “conduit” service with the

trademarked word VAIL and the ski activity for which VAIL is trademarked and

famous, VTC created the impression of being a conduit to the entity that operates

the ski resort at Vail. This, of course, is the source of customer confusion.

Third, in a letter to the PTO, VTC compared its mark to 1-800-FLY-SWA

(for booking air transportation on Southwest Airlines) and 1-800-PICK-UPS (for

scheduling pick-up and delivery of packages by United Parcel Service). The

comparisons illustrate VTC’s intent because they each identify a general service

and the specific provider of the service and provide a contact phone number for

that specific provider. Southwest Airlines provides flights. United Parcel Service

provides package pick up and delivery. But VTC does not provide skiing. Vail

Associates does, and world-famous skiing at that.

-9-
 Even if VTC’s subjective intent was benign, their vanity number, as it is

currently used, has an overarching purpose of selling ski packages to Vail.

Regardless of subjective intent, VTC directly competes with Vail Associates and

capitalizes on the international reputation and marketing Vail Associates creates.

See 4 McCarthy § 23:105 (noting the modern view that intent “is merely evidence

relevant to whether confusion is likely,” and “good faith intentions of an infringer

are no defense to a finding of liability”). The district court was not free to ignore

the objective implication that 1-800-SKI-VAIL directly benefits from the

reputation and mystique of the ski resort. 3 VTC is not relying on its own

goodwill and reputation; it is taking advantage of Vail Associates’ well-known ski

resort business.

3. Evidence of Actual Confusion

“Although not necessary to prevail on a trademark infringement claim,

evidence of actual confusion in the marketplace may be the best indication of

3
As evidence that VTC did not intend to trade on Vail Associates’
reputation, the district court cited a recorded message callers received at some
point during the life of 1-800-SKI-VAIL disclaiming any relationship with Vail
Associates. As I note below, the disclaimer does not absolve VTC of any intent
to lure customers through initial interest confusion. The majority would further
support the district court’s finding with (1) Hanson’s self-serving testimony that
he did not intend the obvious effect of the trademark he chose and (2) VTC’s
expert testimony that the terms “ski” and “Vail” are generic terms, testimony
which ignores the effect of combining the words. This evidence that VTC lacked
intent is marginal compared with the strong inference of intent created by VTC’s
choice of mark. See Beer Nuts, 805 F.2d at 928.

-10-
likelihood of confusion.” Sally Beauty, 304 F.3d at 974. The district court found

no such evidence, stating that “[t]he Vail Associates have not provided evidence

of actual confusion in that they have not shown that persons calling 1-800-SKI-

VAIL assume that they are going to be connected to the owners and operators of

Vail ski facilities.” Aplt. App. 446. Rather, the district court interpreted the

evidence as showing “that people calling that number are expecting to be

connected to businesses that offer services associated with skiing in the Vail

Valley area.” Aplt. App. 446. The district court erred with this interpretation of

Vail Associates’ evidence.

At trial, Vail Associates offered the testimony of a travel consultant, Joyce

Newton, who answered calls to the 1-800 number. She testified that, on a weekly

basis, her company answered ten to twenty calls to 1-800-SKI-VAIL, and that

these callers fit a very different profile than the callers who responded to her

travel agency’s marketing. She stated that “more often than not, there were

questions with regard to general ski related products, location questions.” 4 Aplt.

4
The majority suggests the district court did not clearly err in finding no
evidence of actual confusion because “[p]robable confusion cannot be shown by
pointing out that at someplace, at sometime, someone made a false
identification.” Op. 18 (citing King of the Mountain Sports, Inc. v. Chrysler
Corp., 185 F.3d 1084, 1092 (10th Cir. 1999) and 4 McCarthy § 23:14). The
evidence, however, shows the majority of ten to twenty callers each week to
1-800-SKI-VAIL were specifically seeking information about skiing at Vail
Resort. “Evidence of the number of instances of actual confusion must be placed
against the background of the number of opportunities for confusion before one
(continued...)

-11-
App. 620 (emphasis added). She testified these questions included information

about season passes, directions to Vail, weather, grooming, restaurants, and ski

rental.

These questions directly relate to services provided by Vail Associates, not

simply generically, as the district court found, to “businesses that offer services

associated with skiing in the Vail Valley area.” In fact, when Newton’s business

did not offer the service the caller was seeking, her agents directed the caller to

Vail Associates, because these inquiries were not “a revenue product for us.”

Aplt. App. 621. When a caller asked about grooming at Vail Ski Resort, Newton

testified, “we would refer to one of the Vail Resort switchboards and just let them

go ahead and route to the correct area.” Aplt. App. 621. When callers asked

about season passes to Vail, which “happened quite often,” Newton’s agents

would redirect the call to Vail Resorts. Aplt. App. 622. Newton acknowledged

only Vail Resorts provides season passes. This testimony shows callers contacted

1-800-SKI-VAIL seeking information from the operator of Vail Resort. 5

4
(...continued)
can make an informed decision as to the weight to be given the evidence.”
4 McCarthy § 23:14. Newton was receiving only ten to twenty calls a week on
the 1-800-SKI-VAIL line, and she testified the number was not being advertised,
so the opportunities for confusion were relatively few. That ten to twenty callers
per week dialed the 1-800-SKI-VAIL and the majority of those callers
specifically asked questions directed at Vail Associates’ ski resort business is
significant evidence of actual confusion.
5
The majority makes much of the changes Newton made to an affidavit
(continued...)

-12-
 Newton did testify on cross-examination that she frequently gets questions

as a travel agent from clients about grooming and ski passes because of her

business’s geographical location. But she also testified that callers to her travel

agency asked such questions as a “question in a series of . . . appropriate

questions for our company and our product,” Aplt. App. 646, and that such

questions were a “secondary or subsidiary type of question when getting into

some atmospherically specific things about their vacation.” Aplt. App. 650.

5
(...continued)
prepared for her by a representative of Vail Associates. Newton in essence
revised the affidavit to indicate that callers did not directly communicate to her
that they were trying to reach Vail Associates. Newton added to her affidavit, “In
my opinion, most people can’t necessarily identify a specific company with the
purchase of their ski vacation products. They are familiar with [a] place to ski, as
a place, not a company.” Supp. App. 74.

But to show evidence of actual confusion, Vail Associates does not need to
show callers were trying to reach a particular company. Rather, Vail Associates
must demonstrate callers were trying to reach a particular source of services.

Although trademarks serve to identify goods or services that share a
common source or sponsor, the identity of the source or sponsor may
remain anonymous. It is universally recognized that a likelihood of
confusion sufficient to establish infringement may exist regardless of
whether prospective purchasers know the specific identity of the
trademark owner.

Restatement § 20 cmt. d.

The calls Newton received, including calls requesting season passes and
grooming reports, demonstrate that callers were attempting to contact the only
place for skiing in Vail, a resort operation that happens to be run by Vail
Associates. That callers did not or could not specifically identify an entity they
were attempting to contact is immaterial to the evidence of actual confusion.

-13-
 Based on this testimony, the district court explains the calls to 1-800-SKI-

VAIL requesting specific information about services provided by Vail Associates

by concluding callers would ask these questions simply because they thought they

were contacting some non-specific business geographically located in Vail. But

people do not just call any business in Vail, even a travel agency, to obtain season

pass, weather, and grooming information. Newton testified there was a

“substantial” difference between the general information questions her travel

agency customers asked and the questions callers to 1-800-SKI-VAIL asked. On

the 1-800-SKI-VAIL line, “it had nothing to do with their vacation. It was

directly about the grooming or the season passes. . . . That was all. That was their

specific line of questioning.” Aplt. App. 650–51. People primarily seeking

specific information about ski conditions or tickets would naturally try to call the

ski resort. This is what callers to 1-800-SKI-VAIL did.

The district court addressed Newton’s testimony as indicating only “that

requests for ski passes, lift tickets and other services provided by the plaintiffs

were routed to the plaintiffs and there is nothing to indicate that any other

responders to the number were diverted from the plaintiffs to competitive

providers.” 6 Aplt. App. 447. But the record directly contradicts the court’s

finding that callers were not diverted to competitive providers. Evidence of

6
This statement conflicts with the district court’s finding that there was no
evidence of actual confusion.

-14-
actual confusion can include initial interest confusion, which results when a

prospective consumer of one product is lured to a competing product by a similar

trademark. See Australian Gold, 436 F.3d at 1238. “Even though the consumer

eventually may realize that the product is not the one originally sought, he or she

may stay with the competitor. In that way, the competitor has captured the

trademark holder’s potential visitors or customers.” Australian Gold, 436 F.3d at

1238–39.

Newton testified that “on occasion, [callers to 1-800-SKI-VAIL] suited our

marketing plan” for travel services, including lodging. Aplt. App. 620. She also

testified that her company booked rooms and properties not affiliated with Vail

Associates. As Newton’s testimony shows, even if callers were referred to Vail

Associates for ski conditions or pass information, those callers who sought

accommodation packages were not. Because a significant aspect of Vail

Associates’ ski business is hotel and condominium packages, 1-800-SKI-VAIL

competed directly with Vail Associates in this regard, and Vail Associates

presented evidence that consumers who were trying to contact the operator of Vail

Resort and who were seeking accommodations were instead diverted to

competitors. 7

7
The majority acknowledges that 1-800-SKI-VAIL “provides easy access
to [Vail Associates’] actual service competitors.” Op. 36.

-15-
 The record thus shows that the district court ignored evidence indicating

consumers called 1-800-SKI-VAIL attempting to contact the operator of Vail Ski

Resort and that callers seeking accommodation packages were diverted to Vail

Associates’ competitors. While Newton did not receive a large volume of calls to

the 1-800-SKI-VAIL number, she testified that “more often than not” those

callers were seeking information that would normally be provided by the operator

of Vail Ski Resort. Accordingly, the district court’s finding that Vail Associates

presented no evidence of actual confusion was erroneous.

4. Similarity of the Products and Manner of Marketing

The district court found the use of the 1-800-SKI-VAIL is limited to

“marketing services providing a conduit between the caller and providers of

lodging, restaurants, and other business services associated with skiing in the Vail

area. There is nothing in that use to suggest that this is a service provided by the

owners and operators of the Vail ski facilities.” Aplt. App. 446. This finding

ignores the overlapping nature of the parties’ businesses and fails to acknowledge

that the parties appeal to exactly the same class of consumers.

Naturally, “[c]onfusing similarity is most likely when the products

themselves are very similar.” Beer Nuts, 711 F.2d at 941 (internal quotations and

citations omitted); see Universal Money Ctrs. v. AT&T, 22 F.3d 1527, 1532 (10th

Cir. 1994) (“The greater the similarity between the products and services, the

greater the likelihood of confusion.”). VTC’s marketing of a phone number does

-16-
not mean they were marketing a different service than Vail Associates. VTC held

out 1-800-SKI-VAIL as a means of accessing the same ski resort services offered

by Vail Associates. In its current use as a telephone connection to a travel

agency, 1-800-SKI-VAIL competes with Vail Associates’ ski resort lodging

business and potentially disparages the quality of accommodations Vail

Associates offers. VTC’s own expert acknowledged that 1-800-SKI-VAIL

competes with Vail Associates’ ski resort lodging. 8

The district court also erred by failing to acknowledge that the parties

appeal to the same class of consumers—people seeking a ski vacation in Vail.

“If similar marks are used on goods or services that are marketed to the same

prospective purchasers, the likelihood of confusion is greater than if there are few

common purchasers.” Restatement § 21 cmt. g; see Dieter v. B&H Indus., Inc.,

880 F.2d 322, 327 (11th Cir. 1989) (finding likelihood of confusion when

customers were similar but marketing strategies were dissimilar); cf.

8
The history of 1-800-SKI-VAIL also indicates that VTC’s relationship
with Vail Associates may have been less than “symbiotic,” as VTC’s expert
testified. Aplt. App. 882. Certainly, people calling 1-800-SKI-VAIL are
predisposed to visit the area and ski at the Vail resort, but the service could draw
people to competing areas as well. First, as a connection to a travel agency,
1-800-SKI-VAIL offers travel services outside the Vail area; second, the phone
number’s initial incarnation as a directory service competed with Vail Associates
not only on lodging, but the printed 1-800-SKI-VAIL directory included an
advertisement for a competing ski resort; and third, callers at one point could also
access, among other things, information on Cave of the Winds, an attraction near
Colorado Springs that would take callers away from the Vail area entirely.

-17-
Heartsprings, Inc. v. Heartspring, Inc., 143 F.3d 550, 557 (10th Cir. 1998)

(concluding there was little likelihood of confusion when the parties “operate[d]

in distinctly different markets, [sold] distinctly different products, and

contact[ed], for the most part, very different people in their marketing efforts”).

Given the similarity of the marks, the congruency of the target audience in this

case strongly indicates a likelihood of confusion.

Because VTC markets an overlapping product to the same pool of

consumers as Vail Associates, VTC’s use of a mark virtually identical to Vail

Associates’ can only suggest to the typical consumer that 1-800-SKI-VAIL is

affiliated with Vail Associates’ ski resort business. By “promot[ing] the

alphanumeric translation of [a] phone number, [VTC] caus[ed] the public to see

the protected mark and associate the infringer’s goods or services with those of

the mark holder.” DaimlerChrysler AG v. Bloom, 315 F.3d 932, 939 (8th Cir.

2003); see also Holiday Inns v. 800 Reservation, 86 F.3d 619 (6th Cir. 1996).

VTC used the phone number to create an association in consumers’ minds with

the famous ski resort and then sold consumers services in competition with that

resort.

5. Degree of Care Likely to be Exercised by Purchasers

The consumer’s sophistication or degree of care is relevant because we

assume a sophisticated consumer exercising a high degree of care at the time of a

product’s purchase is less likely to be confused. Sally Beauty, 304 F.3d at 975.

-18-
Although VTC concedes the district court did not expressly consider this factor,

they argue this factor is not critical because we are concerned only with the

degree of care at the time of purchase, and a customer purchases a package from

1-800-SKI-VAIL only after hearing a message disclaiming any affiliation with

Vail Associates. VTC’s argument is unpersuasive because the disclaimer does

not alleviate the confusion problem, even among sophisticated consumers.

Our cases have recognized that consumers purchasing higher cost items are

likely to exercise more care, and a ski vacation is an expensive luxury item many

consumers will plan carefully. See Sally Beauty, 304 F.3d at 975; Beer Nuts, 711

F.2d at 941. Nonetheless, people simply exploring ski vacation options will not

exercise such extraordinary care when simply dialing a toll-free number, as

VTC’s expert testified. VTC’s service therefore attracts consumers at both ends

of the degree of care spectrum. But all potential customers, no matter the degree

of care being exercised, may experience initial interest confusion if the consumer

“seeks a particular trademark holder’s product and instead is lured to the product

of a competitor by the competitor’s use of the same or a similar mark.”

Australian Gold, 436 F.3d at 1238. Even though initial confusion is dispelled, the

consumer may stay with the competitor.

A disclaimer does not alleviate the damage wrought by initial interest

confusion. See id. at 1240 (applying this principle to web sites). Here, a typical

consumer seeking a ski vacation in Vail is likely to call 1-800-SKI-VAIL seeking

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information, accommodations, or a complete ski package. Whether the caller is

an unsophisticated consumer simply gathering information or a sophisticated

consumer who is ready to book an expensive ski vacation, VTC has obtained a

major advantage over Vail Associates in selling its accommodation services if the

consumer dials 1-800-SKI-VAIL hoping to contact the operator of Vail Resort,

disclaimer notwithstanding. Vail Associates will never see those consumers who

thought they were calling the resort or were interested in a complete package of

lift tickets and accommodations offered by Vail Associates.

6. Strength of the Mark

Finally, I consider the strength of VAIL as a word mark. Trademarks are

categorized according to their relative strength. The stronger the mark, the more

likely the confusion. Sally Beauty, 304 F.3d at 975. In ascending order of

strength, the categories are: (1) generic; (2) descriptive; (3) suggestive; (4)

arbitrary; and (5) fanciful. Id. 9 A “descriptive mark identifies a characteristic or

9
Generic marks refer to “a general class of goods, such as ‘cola,’ of which
an individual article is but a member.” Sally Beauty, 304 F.3d at 976. Because a
generic mark does not specify the origin of a product, it is not entitled to
trademark protection. Unlike generic and descriptive marks, suggestive, fanciful,
and arbitrary marks are inherently distinctive and therefore do not need proof of
secondary meaning. Suggestive marks do not directly describe a product, but
instead suggest a product, requiring “the consumer to use imagination and
perception to determine the product’s nature.” Id. Arbitrary marks are similar,
using only “common words, symbols, and pictures that do not suggest or describe
any quality or characteristic of the goods or services.” Id. Fanciful marks are
words coined for the express purpose of acting as a trademark. Id.

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quality of an article or service, such as its color, odor, function, dimensions, or

ingredients.” Id. at 976.

VAIL is a descriptive mark because it also refers to the geographic location

of the Town of Vail and the Vail Valley region west of Vail Pass. Accordingly,

its strength depends on whether it has acquired a secondary meaning distinctive of

the location. See Donchez v. Coors Brewing Co., 392 F.3d 1211, 1216 (10th Cir.

2004); see also 2 McCarthy § 14:1 (noting that “descriptive geographical terms

are in the ‘public domain’ in the sense that every seller should have the right to

inform customers of the geographical origin of his goods. Therefore, a seller

must build up goodwill and consumer recognition in a descriptive geographical

term in order to have a legally protectable interest, and take the term out of the

public domain”).

“Secondary meaning exists only if most consumers have come to think of

the word as not descriptive at all but as the name of the product [or service].”

Donchez, 392 F.3d at 1218; see Retail Servs. v. Freebies Publ’g, 364 F.3d 535,

539 (4th Cir. 2004) (“Saying that a trademark has acquired ‘secondary meaning’

is shorthand for saying that a descriptive mark has become sufficiently distinctive

to establish ‘a mental association in buyers’ minds between the alleged mark and

a single source of the product.’”) (quoting 2 McCarthy § 15:5) (emphasis in

original). A geographically descriptive term, like all other descriptive terms,

acquires a secondary meaning when prospective purchasers come to associate the

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term with a particular source, even if the purchaser cannot identify that source.

Restatement § 13 cmt. e. Thus, a consumer need not recognize that a particular

company, or any company at all, operates the ski runs at Vail; a consumer need

only associate VAIL with that particular skiing experience.

Here, the district court found that “[a]s an identifier of the services for

which [VAIL] was registered, the word mark is weak and is more descriptive of a

geographical location at which those services are provided rather than for the

services themselves.” Aplt. App. 446. The evidence does not support this

conclusion. VAIL is a descriptive term that has acquired a secondary

meaning—world-class ski resort services. VTC’s own expert testified VAIL is a

strong mark “[i]n the specific context of ski resort services, the services for which

it’s registered and for which it’s widely known.” Aplt. App. 874. The expert

later testified the commercial strength of the VAIL mark is “probably world

renowned.” Aplt. App. 882. Vail Associates presented testimony that Ski

Magazine has ranked Vail the number one ski resort in thirteen of the last

seventeen years. This renown is backed by substantial marketing efforts: $13

million in 2003, and over $100 million since the VAIL mark was registered in

1989. 10

10
Vail Associates spent $10 million in 2003 marketing Vail Mountain in
conjunction with its other resorts and $3 million marketing Vail in isolation. The
majority and the district court discount Vail Associates’ efforts to promote its
(continued...)

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 Of course the context of ski resort services for which Vail Associates has

invested in its world-renowned mark is the very context in which VTC used the

VAIL mark—they inserted the word “Vail” into a phone number associated with

skiing. This is not a case, like the expert described, of “Ford taken out of . . . the

automotive context, Ford bubble gum, Ford modelling [sic] agency.” Aplt. App.

875. VTC did not take VAIL out of the ski resort services context; instead, they

emphasized that context with their choice of mark.

The district court erred by deeming the mark weak simply because Vail is

also a geographic location. That a mark is geographically descriptive is “not

conclusive of ‘strength’ . . . since the issue ultimately depends on the degree to

which the designation is associated by prospective purchasers with a particular

source. Thus, a descriptive mark through vigorous promotion can become a

strong mark.” Restatement § 21 cmt. I. Vail Associates has created a strong

mark for skiing resort services. Because of those efforts, the word “Vail”

conjures a mental association with those services in buyers’ minds. And the

record shows that Vail Associates vigorously promotes the trademark and

vigorously protects it when used in connection with skiing in Vail. The mere fact

10
(...continued)
mark because in print advertisements the word “Vail” is usually accompanied by
a stylized logo. But VTC presented their mark as a phone number, in defendant
Hanson’s words, a “conduit” for contacting a service by telephone. A consumer
would not expect to encounter a stylized logo in the presentation of a telephone
number.

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that Vail is also a geographical location does not prevent Vail Associates from

creating a strong mark when “Vail” is associated with skiing.

As further indication that the VAIL mark is not merely descriptive, VTC

does not simply use the word “Vail” as a descriptive term—they are using it to

lure customers based on the reputation of the Vail Resort for skiing. VTC

juxtaposes the words “ski” and “Vail” in their alphanumeric number to suggest

ski resort services, which they provide in competition with Vail Associates. This

use of the name “Vail” is quite distinct from the many businesses in the Vail area

that incorporate Vail as a geographical location in their business name. 11

Finally, that Vail Associates’ mark has become incontestable—by virtue of

its registration for over five years—is further indication of its strength. The

parties concede and the district court found that Vail Associates’ word trademark

became incontestable under 15 U.S.C. § 1065 in 1995. “An ‘incontestable’ mark

11
The record also shows that Vail Associates does not contest the
geographically descriptive uses of the word Vail in numerous local businesses,
such as “Vail Limo,” Aplt. App. 695, “Vail Daily,” Aplt. App. 690, “Vail Valley
Music Festival,” Aplt. App. 691, and “Vail Golf Club,” Aplt. App. 698. This
belies the district court’s fear that “[t]o grant the protections claimed by the
plaintiffs in this case would create a monopolistic empire requiring that anyone
who offers any type of service to connect the public with recreation activities in
the Vail Valley must first seek a license or permission from the plaintiffs before
they can proceed.” Aplt. App. 447. The strength of the VAIL mark lies in ski
resort services, and 1-800-SKI-VAIL creates consumer confusion only because it
suggests a means of accessing those services for which Vail Associates has
promoted its mark rather than the geographical location of a particular business.
Contrary to the district court’s suggestion, the record does not show that the
VAIL mark has been asserted in an overbroad or overreaching manner.

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cannot be challenged as lacking secondary meaning; such marks are conclusively

presumed to be nondescriptive or to have acquired secondary meaning.” Beer

Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920, 924 (1986); see also Dieter,

880 F.2d at 329 (holding that an incontestable mark “is presumed to be at least

descriptive with secondary meaning, and therefore a relatively strong mark”).

Although Vail Associates presented evidence of secondary meaning and

need not rely on such a presumption, the incontestability of the VAIL mark only

adds to the weight of this factor in its favor. The district court’s cursory

conclusion that Vail Associates’ mark was weak was clear error based on the

evidence.

* * *

In sum, the totality of the factors strongly confirms that VTC’s mark is

likely to cause consumer confusion. Accordingly, I would conclude the district

court erred in finding that VTC’s vanity number does not infringe upon the Vail

Associates’ trademark. Because the district court’s conclusions with regard to the

Trademark Cancellation and False Designation of Origin claims both depended on

its finding of no likelihood of confusion, I would remand those claims for further

consideration.

I therefore dissent.

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