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Welcome to the (Courthouse) Hotel California

Posted in Famous Marks, Infringement, International, Law Suits, Trademarks

While it may be a lovely place, the Eagles are not too keen on a small hotel in Todos Santos, Mexico and its use of the name HOTEL CALIFORNIA. After opposing the hotel’s trademark application last January, the band earlier this week sued the hotel in federal court in California for trademark infringement and unfair competition (complaint).

 

Hotel California

The hotel was purportedly named the Hotel California back in the 1950s, decades before the Eagles recorded their hit song of the same name. Legends of the hotel as the inspiration of the song have swirled for years, but it is possible those “legends” have been planted, or at least encouraged, by the hotel’s new owners that purchased the hotel in 2001.

In fact, for decades the hotel has gone by a number of names other than the Hotel California. However according to the Eagles, the promotion of the “rumored” connection to the Eagles’ hit increased significantly under new ownership.

The complaint raises a number of interesting trademark issues. For example, to what extent may a band claim trademark rights in a song title? Can a third-party be sued in the U.S. for conduct that occurs exclusively in a foreign country? We discussed some of these issues in our previous article discussing the Notice of Opposition filed with the Trademark Trial and Appeal Board by the Eagles back in January.

But speaking of the Notice of Opposition, the timeline also raises an interesting issue and an important practice tip for attorneys and businesses alike. The Baja California hotel has been operating for over a decade under a new ownership. On November 16, 2015, however, the company chose to file a trademark application for the HOTEL CALIFORNIA covering numerous items across six classes of goods. This was followed by an opposition by the Eagles, and then this lawsuit.

A federal trademark registration is a valuable piece of intellectual property. It provides significant statutory benefits to the owner and can be used as a sword and a shield in litigation. It is almost always preferable to have a registration for your trademarks. But one time where federal registration should not be sought is where the likelihood of waking a sleeping giant is high.

Would the Eagles have ever objected to Baja California’s use of the HOTEL CALIFORNIA name if Baja California had never filed its trademark application? Possibly not. By filing a trademark application, the applicant is staking a claim to use the mark in the U.S., potentially throughout the entirety of the country. While a senior user might be comfortable with an isolated or geographically remote use, filing a trademark application raises the stakes significantly.

Perhaps it was inevitable for the Eagles to object. Or it is possible that Baja California recently expanded its advertising or increased its activities in some way, or would have done so in the future. However this situation is a reminder for attorneys and businesses alike to consider the rights of third-parties before filing trademark applications. If there is a significant risk of a third-party objecting (and you have no real defense), it may be preferable to fly under the radar rather than risk being sued.