As first reported in The Hollywood Reporter, earlier this week The Eagles filed a lawsuit in the United States District Court for Central California seeking both an injunction and damages against a couple who (through their California-based LLC) operate the “Hotel California” in the Mexican state of Baja California.
The suit alleges, among other things, that since 2001 the couple have gone out of their way to lead potential patrons into thinking that their establishment is connected with the iconic American band, even having served as the inspiration for the 1978 Grammy Record of The Year winner, not to mention having profited off of assorted merchandise bearing the name of perhaps the band’s most popular song.
On its (lovely) face, The Eagles’ complaint claims “trademark infringement” against the defendants, however a closer look reveals that the band is actually pursuing a claim for unfair competition under the Lanham Act (15 U.S.C. § 1125(a)) in addition to common law trademark infringement against the defendant hotel operator.
This is likely because the band’s application for its “HOTEL CALIFORNIA” mark has yet to be approved by the U.S. Patent and Trademark Office (although an application for the mark in the classes of key chains, guitar picks, posters, t-shirts, sweatshirts, bathrobes, and playing cards(!)) is currently pending with the USPTO.
Pursuing an unfair competition claim under Section 43 of the Lanham Act allows The Eagles to bring suit based upon their prior, common law use of the mark in commerce dating back to the track’s release in 1976, while affording them essentially the same statutory remedies of injunctive relief, treble damages, and possibly their attorney’s fees.
The factual background of the case will make it interesting to see how it plays out (if it even plays out). Business owners should also consider it a cautionary tale when it comes to thinking about using or trading off of an existing famous mark or any type of name or phrase that is a cultural phenomena.
Just because a mark has not yet been formally registered with the USPTO, you should never assume it has not been previously used in commerce by another or that the owner or holder with prior rights to that mark will not chose to enforce their common law trademark rights against you.
Ben Bhandhusavee is the Managing Attorney for BhandLaw, a Phoenix tech law firm that works with start-up companies, intellectual property matters, and complex business and technology transactions. Ben can be reached at (602) 678-2970 or by e-mail at email@example.com