Hilton Head time-share company sues law firm for alleged trademark violations

dburley@islandpacket.comDecember 21, 2013 

The Coral Sands Resort property at 66 Pope Avenue on June 11, 2014.

JAY KARR — Staff photo Buy Photo

A Hilton Head Island time-share company has sued an island law firm over its alleged use of the company's registered trademarks to generate hits on its own website.

In a federal suit filed Tuesday, Coral Resorts LLC accuses Naert and DuBois LLC of purchasing keywords related to the resorts through search engines such as Google. Those purchases drive the firm's website to the top of the list when the resorts are searched, the complaint says.

The resorts lost business because potential customers were led to assume there was an affiliation between the law firm and the timeshares, according to the lawsuit.

"The defendants' use of the plaintiffs' trademarks is likely to cause confusion, cause a mistake or to deceive customers," the lawsuit says.

Coral Resorts operates Port O'Call at Shipyard Plantation, Island Links, Coral Reef and Coral Sands resorts.

Attempts Friday to reach representatives from Coral Resorts, including attorney Nekki Shutt, were unsuccessful.

The attorneys at the law firm, Zach Naert and Joseph DuBois, declined to comment.

Naert and Dubois' firm specializes in time-share litigation, among other practices, according to its website.

Beaufort County court records list at least six pending cases in which clients represented by the firm accuse the resorts of unfair trade practices. Attempts Friday to obtain those lawsuits were unsuccessful.

In Coral Resorts federal suit, the time-share company says the law firm uses its registered trademarks in an attempt to advertise its legal services and solicit clients.

In a process called search engine marketing, websites such as Google AdWords allow companies to pay for their advertisements to appear above search results for certain keywords. Coral Resorts contends the law firm purchased its trademarks as keywords to more prominently display advertisements.

In addition to Google AdWords, the resorts say the law firm bought its trademarks on search engines including Ask.com, Bing, Yahoo, AOL and DuckDuckGo.

The resorts claim they registered each of the specific words or phrases with the state and have been in business in the area for more than 24 years, making their trademarks "inherently distinctive."

The company further contends that the law firm's advertisements appear only in connection with time share-related keywords such as "Coral Reef" or "Island Links," but not in general searches for time-share attorneys.

"When one uses the keywords 'timeshare attorney South Carolina,' there are numerous advertisements for law firms, but the defendants do not appear on the first or second page of the search results," according to the lawsuit.

The law firm's use of the registered trademarks to drive its advertising without the plaintiff's permission is false advertising and violates the state's Trademarks and Service Marks Act, the resorts claim.

Around the country, similar cases involving intellectual property rights and search engine marketing have been filed in recent years.

Eric Goldman, a professor at Santa Clara University School of Law and contributor to Forbes.com, has written extensively about the topic.

Trademark law "stops someone from buying the wrong soda because they were confused between brands," Goldman said in an interview Friday.

He likened the Coral Resorts lawsuit to a federal case in New York state that he wrote about in an August blog post. In that case, a debt-collection service sued a law firm that brings claims against debt collectors. The firm was accused of, among other things, buying keywords from Google AdWords that reference the debt collector's trademarks.

"Trademark owners usually assume they can win the case when the advertiser references the trademark in the ad copy. Not so," Goldman wrote in the post.

The judge agreed, siding with the defense.

Goldman goes on to explain the trademark infringement claim failed because "the ad copy so clearly indicates that the advertiser is an adverse party."

After reviewing Coral Resorts' lawsuit Friday, Goldman said it seemed "like a real possibility there is nothing actionable here."

As of Friday evening, Naert and DuBois had not responded to the claims in the lawsuit.

The company is requesting damages, costs and attorney's fees. It also seeks an injunction ordering the law firm to terminate all contracts with Internet advertising services and stopping the firm from using any of the keywords in the future.

Follow reporter Dan Burley on Twitter at twitter.com/IPBG_Dan.

Related content:

Eric Goldman's blog post, Aug. 19, 2013

ALLIED INTERSTATE LLC, Plaintiff, v. KIMMEL & SILVERMAN P.C. et al., Defendants. (New York District Court case)

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