Royal Palm Props., LLC v. Pink Palm Props., LLC, No. 18-14092

• Decision Date: 18 February 2020
• Docket Number: No. 18-14092
• Citation: 950 F.3d 776
• Parties: ROYAL PALM PROPERTIES, LLC, a Florida limited liability company, Plaintiff - Counter Defendant - Appellant, v. PINK PALM PROPERTIES, LLC, a Florida limited liability company, Defendant - Counter Claimant - Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

950 F.3d 776

ROYAL PALM PROPERTIES, LLC, a Florida limited liability company, Plaintiff - Counter Defendant - Appellant,

v.PINK PALM PROPERTIES, LLC, a Florida limited liability company, Defendant - Counter Claimant - Appellee.

No. 18-14092

United States Court of Appeals, Eleventh Circuit.

February 18, 2020

Robert J. Hauser, Pankauski Hauser, PLLC, West Palm Beach, FL, Meredith Chaiken, Thomas U. Graner, Graner Platzek & Allison, PA, Boca Raton, FL, Raymond J. Rafool, II, Rafool, LLC, Miami, FL, for Plaintiff-Appellant.

Jerold I. Schneider, Schneider IP Law, Boynton Beach, FL, Joel Benjamin Rothman, Sriplaw, Boca Raton, FL, for Defendant-Appellee.

Before JORDAN and NEWSOM, Circuit Judges, and WRIGHT,^* District Judge.

NEWSOM, Circuit Judge:

Royal Palm Yacht & Country Club, a residential community in Boca Raton, Florida, is home to multimillion-dollar mansions, a championship golf course, and even a private marina. It’s also home, as it turns out, to the contentious real-estate rivalry that spawned this trademark litigation.

Royal Palm Properties, a real-estate broker whose specialty is buying and selling homes in Royal Palm Yacht & Country Club, sued its competitor, Pink Palm Properties, for infringing its registered service mark on the phrase "Royal Palm Properties." Pink Palm Properties counterclaimed, challenging the mark’s validity. A jury in the U.S. District Court for the Southern District of Florida upheld Royal Palm Properties’ mark but found that Pink Palm Properties hadn’t infringed it. The district court, though, overturned the verdict in part, granting Pink Palm Properties’ renewed motion for judgment as a matter of law and ordering the cancellation of Royal Palm Properties’ mark. The question before us is whether the district court correctly flipped the jury’s verdict and granted judgment as a matter of law on Pink Palm Properties’ trademark-invalidation counterclaim.

We hold that the district court erred. To be entitled to judgment as a matter of law, Pink Palm Properties would have had to make quite the showing at trial—such that no reasonable jury could have found that it failed to prove grounds for cancelling Royal Palm Properties’ mark. Based on our careful review of the record, we conclude that Pink Palm Properties didn’t meet this high bar. On neither of its two grounds for cancellation—that the "Royal Palm Properties" mark (1) is not "distinctive" and (2) is "confusingly similar" to previously registered marks—did Pink Palm Properties prove, decisively, that it had won the day. We therefore reverse the district court’s decision to overturn the jury’s verdict and invalidate Royal Palm Properties’ service mark.

I

A

Royal Palm Yacht & Country Club is a high-end residential community in Boca Raton, Florida. The posh, waterfront neighborhood consists of both a 700-home subdivision and a private country club. Unsurprisingly, property in Royal Palm Yacht & Country Club doesn’t come cheap. If you’re looking to buy a house there, it’ll run you somewhere between $1.1 million and $15 million.

The plaintiff-appellant in this case, Royal Palm Properties, is a real-estate agency that focuses exclusively on the Royal Palm Yacht & Country Club community—a strategy that has proved remarkably successful. Royal Palm Properties consistently represents more buyers and sellers in the subdivision than any other broker. To protect its position in the Royal Palm Yacht & Country Club market, Royal Palm Properties has developed an aggressive marketing campaign. During the past 10 years, Royal Palm Properties has spent $1.6 million promoting its services to Boca Raton residents through the periodic transmission of mailers, reports, calendars, magazines, and brochures—all of which are aimed at promoting the "Royal Palm Properties" brand. The agency also hosts an annual "Showcase of Homes" in Royal Palm Yacht & Country Club, which features simultaneous open houses in the subdivision and a brunch at the country club.

Royal Palm Properties has also used trademark law to protect its brand. In 2012, the agency acquired a federally registered service mark on the name "Royal Palm Properties." The agency applied for and obtained the mark from the U.S. Patent and Trademark Office under Section 2(f) of the Lanham Act, which provides federal protection for any mark that has "acquired distinctiveness" over time, even though it might not be "inherently distinctive." See 15 U.S.C. § 1052(f). (If that all sounds like so much gobbledygook to you, don’t worry; a deep dive into trademark law is coming. For now, just know that the "inherent"-"acquired" distinction matters.)

Several years later, in 2015, Royal Palm Properties went back to the PTO seeking registration of a "composite mark"—a combination of the phrase "Royal Palm Properties" and an "RP" logo. The PTO, though, denied Royal Palm Properties’ second application after determining that the proposed composite mark was "confusingly similar" to two existing service marks, "Royale Palms" and "Royale Palms at Kingston Shores," which had been registered in 2007 and 2008, respectively, to a real-estate company in Texas. The PTO’s 2015 decision made no mention of Royal Palm Properties’ 2012 registration of the "Royal Palm Properties" mark, apparently leaving it intact.

Enter Pink Palm Properties, our defendant-appellant. Like Royal Palm Properties, Pink Palm Properties is a luxury real-estate brokerage agency in Boca Raton. But unlike Royal Palm Properties, Pink Palm Properties operates in a variety of residential communities—only a fraction of its business involves the homes in Royal Palm Yacht & Country Club. That, though, hasn’t stopped Royal Palm Properties from keeping a close eye on Pink Palm Properties. In 2017, Royal Palm Properties noticed that Pink Palm Properties was using a link on its website labeled "Royal Palm Properties" to direct viewers to Pink Palm Properties’ listings in Royal Palm Yacht & Country Club. Trademark law in hand, Royal Palm Properties demanded that Pink Palm Properties stop using the "Royal Palm Properties" name on its website. Pink Palm Properties eventually complied, but—so Royal Palm Properties claimed—the damage was done.

B

Royal Palm Properties filed suit against Pink Palm Properties in the U.S. District Court for the Southern District of Florida, alleging that Pink Palm Properties had infringed its registered service mark, "Royal Palm Properties," in violation of the Lanham Act, 15 U.S.C. § 1114. Pink Palm Properties both denied the infringement allegation and filed a counterclaim seeking a declaration that the "Royal Palm Properties" mark is invalid under the Act. After a three-day trial, the jury split the baby: It upheld the mark but found that Pink Palm Properties hadn’t infringed it.

Following the jury’s verdict, Pink Palm Properties filed a renewed motion for judgment as a matter of law on its counterclaim. The district court granted the motion and (overturning the jury verdict) invalidated the "Royal Palm Properties" service mark. Lanham Act protection is available, the district court noted, only to "distinctive" marks. And, the court held, the phrase "Royal Palm Properties" has neither "inherent" nor "acquired" distinctiveness. "Royal Palm Properties" is not inherently distinctive, the district court concluded, for two reasons: (1) it is "primarily geographically descriptive," and thus insufficiently unique to qualify for trademark protection; and (2) it is "confusingly similar" to previously registered marks. (The district court made a mistake in treating the "confusingly similar" issue as part-and-parcel of the "distinctiveness" question—as we’ll explain later, it is its own thing—but for present purposes it’s not important.) On acquired distinctiveness, the district court held that there was insufficient evidence to find that the phrase has obtained the requisite "secondary meaning," such that the public now associates it with Royal Palm Properties—the real-estate agency—rather than Royal Palm Yacht & Country Club—the subdivision. Accordingly, the district court held that the "Royal Palm Properties" mark "should never have been registered" and "ought to be cancelled pursuant to 15 U.S.C. § 1119."

This is Royal Palm Properties’ appeal.

II

The Lanham Act gives federal courts the authority to cancel trademarks that the PTO has registered. 15 U.S.C. § 1119. In order to successfully prosecute a claim for trademark cancellation, the challenger of a federally registered mark must demonstrate "(1) [t]hat it has standing to petition for cancellation because it is likely to be damaged, and (2) that there are valid grounds for discontinuing registration." Coach House Rest., Inc. v. Coach and Six Rests., Inc. , 934 F.2d 1551, 1557 (11th Cir. 1991). Where, as here, the mark at issue has been registered for less than five years when challenged, the "valid grounds for discontinuing registration" include any reason for which "the registration should have been barred in the first instance." Id. at 1558 ; see also Person’s Co., Ltd. v. Christman , 900 F.2d 1565, 1568 (Fed. Cir. 1990).

Pink Palm Properties sought—and on appeal now defends—cancellation of the "Royal Palm Properties" service mark on two grounds. First, it says, the mark is not "distinctive"—it has neither "inherent" nor "acquired" distinctiveness. Second, it contends that the mark is "confusingly similar" to previously registered marks. We’ll consider each ground in turn.

Before jumping into the merits, though, we need to set the stage with a brief word about procedural posture. This appeal comes to us from the district court’s order granting Pink Palm Properties’ motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b). We review the district court’s decision de novo , applying the same standard that court applied. Richardson v. Leeds Police Dep’t , 71 F.3d 801, 805 (11th Cir. 1995). Accordingly, we examine the entire record in the light most favorable to Royal Palm Properties,...