Real Estate News

Federal judge sides with Coral Resorts, advances trademark-violation suit

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

A federal judge has ruled in favor of Coral Resorts and advanced its lawsuit against an island law firm that is accused of using the timeshare company's trademarks to generate hits on its own website.

U.S. District Judge Richard Gergel on Tuesday denied the law firm's motion to dismiss the case. The firm, Naert and DuBois LLC, represents timeshare owners in 27 cases against Coral Resorts, according to Beaufort County court records.

The timeshare company accuses the law firm 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, according to Coral Resorts' complaint.

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

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 law firm's purchase of "names as hidden keywords through online Internet search engines in order to redirect consumers to their law firm's website for commercial gain is neither fair nor straightforward," Coral Resorts attorney Nekki Shutt said in a statement Thursday.

In response to the complaint, Zach Naert and Joseph DuBois argued there was no chance consumers will be confused, since the services offered by the resorts and the law firm do not overlap.

The judge said the argument had merit, but is an "inherently factual" issue that would be more appropriately determined further along in the case, according to his decision. The lawsuit could head to trial in September, the judge's case manager said Thursday.

In a statement, DuBois said he looks forward to the trial to answer "whether it is truly in the public's interest to restrict defrauded timeshare purchasers from finding legal representation for their claims."

DuBois represents owners who assert they were deceived by sales pitches and signed contracts that didn't reflect what they were promised by salesmen, according to lawsuits and official complaints. Others say promises made -- such as a unit by the pool, waived maintenance fees, an available timeshare every year -- weren't kept according to lawsuits. Some say timeshare staff pledged to rent the units for would-be buyers and buy them back if they ever wanted to sell.

Coral Resorts denies such claims. The firm's attorneys argue these owners represent "a small but vocal subset" of the more than 20,000 people who visit the resorts every year.

Twelve of the owners' cases have moved to arbitration, Coral Resorts' attorney said Thursday. The rest are pending, according to court records.

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