1-800 SKI VAIL Doesn’t Infringe–Vail Associates v. Vend-Tel-Co

By Eric Goldman

Vail Associates, Inc. v. Vend-Tel-Co., Ltd., 2008 WL 342272 (10th Cir. Feb. 7, 2008)

This case nicely illustrates that a vanity 800 number containing a third party trademark doesn’t create a likelihood of consumer confusion. To the extent that 800 numbers are analogizable to keyword advertising, this case suggests that maybe keyword trademark triggering doesn’t either.

The defendant operates nearly 2 dozen 800-phone lines that all begin “1-800-SKI-[destination].” At issue in this case is the phone line 1-800-SKI-VAIL. The 800 number was a redirection service that routed callers to various businesses such as travel agencies.

Not being a skier, I learned from the case that the term “Vail” is special–it is both a geographic descriptor of the town of Vail and a registered trademark for the only ski resort in the Vail geographic area. The plaintiff’s argument is that any promotion involving skiing and “Vail” must necessarily involve its resort, making confusion impossible to avoid.

While this isn’t a terrible argument, it raises a difficult issue given that many businesses–including, presumably, businesses that cater to the skiing crowd–can legitimately use the term “Vail” in their trademarks due to its geographic descriptiveness. As the majority sharply points out in a smack-on-the-tush footnote at the end of its opinion, “counsel for [the ski resort], who no more wanted to talk about the record evidence than a hog wants to talk about bacon, opined that [the resort] would be well within its rights under the Lanham Act to pursue claims of mark infringement against [the countless number of retailers, merchants, and innkeepers in and around Vail who use the town's name to promote their wares and services]. According to counsel, [the ski resort] declined to do so only as a ‘matter of policy.’ The numerous businesses in the region using the word Vail as a marketing tool surely find small comfort in such knowledge.”

While we could do some interesting parsing of the linguistic implications of the phrase “ski Vail,” the trial court did that already and found for the defense in a bench trial on likelihood of consumer confusion. This is no small feat given the trial’s venue in Colorado and the Vail ski resort’s power as a local institution (including troubling allegations that ski resort economically coerced a local travel agent to distort her testimony by cutting off her ability to book at the resort). Working against a trial loss, the ski resort had an uphill battle on appeal and only swayed 1 of the 3 judges on the panel.

Along the way, the majority redefined the 10th Circuit’s standards for initial interest confusion, initially articulated in the doctrinally depraved keyword advertising and metatag case Australian Gold v. Hatfield. In this case, the court limits the Hatfield precedent by saying:

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.

Well, true. Initial interest confusion is just a theory, and a crappy and analytically deficient one at that. And the plaintiff in this case didn’t appear to marshal any compelling evidence that consumers experienced any confusion, let alone anything that could be characterized as initial interest confusion. So if hard evidence is required to find initial interest confusion, I don’t expect many plaintiffs to be able to assert it successfully.

While this is good news, I’m struck by the fact that the Hatfield finding of initial interest confusion had similar factual deficiencies, and it didn’t stop the 10th Circuit then. As I wrote in critiquing the Hatfield case:

the court’s reliance on the initial interest confusion doctrine is lazy….To analyze whether consumers experienced (or could have experienced) initial interest confusion, we would need lots of facts—did search engines even index the metatags? What content did searchers see in search results triggered by metatags that were actually indexed? In the case of the keyword advertising, what did the ad copy say? Should there be a different standard when the defendants were actually selling the manufacturer’s goods from the website? The court does not consider any of these issues.

Worse, consider this. The majority repeatedly bashes Vail ski resort for unsupported empirical assertions, but at the same time the majority–seemingly oblivious to the palpable hypocrisy–says “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.” (Emphasis added). Uh…any citations for those assumptions?!

So while I’d like to think that this case trumps Hatfield and will require future 10th Circuit plaintiffs to make a meaningful evidentiary showing of initial interest confusion, we know how this story goes. As I said two years ago in my post about Hatfield, “As a result of the 10th Circuit’s corner-cutting, I think the 10th Circuit will need to revisit its holding in future cases to clean up its doctrinal errors—much like other circuits that lazily adopted the initial interest confusion doctrine to resolve the dispute at hand.” Here we are, and the 10th Circuit has done just that, but there’s no reason to think this is the final ruling on this matter. Instead, until the 10th Circuit kills the initial interest confusion doctrine outright, this is probably more like the beginning of a long and strange journey. Thus, I predict that more doctrinally tortured opinions are in the 10th Circuit’s future.

Despite that, let’s focus on the principal good news here:

1) For now, the vitality of the initial interest confusion doctrine has been significantly undercut in the 10th Circuit.

2) I’m not sure how much trademark infringement cases involving 800 phone numbers teach us about keyword advertising cases because the caselaw involving the different technologies have engaged in limited cross-fertilization. To the extent there is some insights to be drawn between the two technologies, this case provides another data point suggesting that when a trademark owner-vs-advertiser lawsuit over keyword advertising reaches a trial on likelihood of consumer confusion, the factfinder will conclude there isn’t any. (For another limited data point, see the JG Wentworth case).

3) We’re all still free to encourage others to “ski Vail”….although, after reading about the ski resort’s regressive attitudes towards trademark law, I won’t be encouraging anyone to do so any time soon…