Great East Resort v. Virtual Resort Solutions

Citation: Great East Resort Corp. v. Virtual Resort Solutions, L.L.C., 189 F. Supp. 2d 469 (W.D. Va. 2002).

Factual Background
Plaintiff operated a resort community and recreational facilities under the names MASSANUTTEN and MASSANUTTEN RESORTS for more than seventeen years. The Massanutten Resort is located in the Massanutten area of Virginia. Defendant Arnold formed Massanutten Tour Company ("MTC") in 1995 to offer tours and services to resort and area guests, and later registered the domain names "massanutten.com," "emassanutten.com," "massanuttenvacations.com," and "massanuttenresort.com." In 1996, MTC became the exclusive tour-bus service for the Massanutten Resort, and plaintiff promoted this relationship in materials provided to resort guests and with a hyperlink on its "massresort.com" website to MTC's website.

In 2000, after the parties' business relationship ended, Arnold formed defendant Virtual Resort Solutions ("VRC") to advertise timeshare units for sale in Massanutten Resort and used the domain names registered by MTC to promote its services.

Trial Court Proceedings
Plaintiff filed suit alleging trademark infringement and cybersquatting under the ACPA and moved for a preliminary injunction. The court granted the preliminary injunction based on plaintiff's infringement claim but with certain limitations. Although the balancing of harms did not tip decidedly in plaintiff's favor due to plaintiff's delay in filing suit and defendants' use of the "massanutten.com" website as an important part of their marketing strategy, plaintiff demonstrated a sufficiently strong likelihood of success on the merits to warrant issuance of an injunction.

Although plaintiff's common-law mark MASSANUTTEN was geographically descriptive, it had acquired secondary meaning based in part on plaintiff's use of the mark for more than seventeen years and advertising and marketing expenditures of more than $135,000,000 over the past five years alone. The presence of numerous area entities that use the word "Massanutten" in their business names did not detract from secondary meaning in the MASSANUTTEN mark for resort services because those businesses were using "Massanutten" in its ordinary geographically descriptive sense to denote the location of the business, not to denote an association with plaintiff's resort.

In contrast, defendants' use of "Massanutten" on their "massanutten.com" website suggested that "they are, or are associated with, the plaintiff's resort itself, rather than merely the location of the real estate they advertise." In addition to the similarity between defendants' domain names and plaintiff's mark, the content on defendants' website was "so similar to that on the plaintiff's website that a visitor would likely assume that the defendants' site is owned or at the very least affiliated with the plaintiff." For example, defendants' website displayed skiers in a winter resort setting and provided detailed information about plaintiff's resort. And consumers had actually mistaken the defendants and the services on their website for those of the plaintiff.

The court rejected defendants' defenses of estoppel and acquiescence, finding that defendants' long-time use of the business name "Massanutten Tour Company" was a geographic fair use of plaintiff's mark. In contrast, defendants' current use of MASSANUTTEN to promote sales of resort properties relied on the secondary meaning of plaintiff's mark for resort services. The court thus preliminarily enjoined defendants from using the four domain names at issue as well as any other domain name or "website address" containing the term "massanutten" unless given prior approval by the court. But the court did not enjoin defendants from using the term "massanutten" in the content of its website to the extent such use qualified as a descriptive fair use as discussed in the court's decision.

This page uses content from Finnegan’s Internet Trademark Case Summaries. This entry is available under the GNU Free Documentation License.