Traditionally, trademarks were always tied closely to geography. The Internet and the rise of a global economy have challenged that tie, but geography still plays an important role in trademark law. A recent court case involving two retirement community companies illustrates this point.
Trademark infringement lawsuit
The case involves Westmont Living, which manages 19 senior living facilities on the West Coast, and Retirement Unlimited Inc., which manages similar facilities in several Southeastern states, including Florida.
Retirement Unlimited opened a new senior community and called it the Westmont at Short Pump, taking the name from two nearby neighborhoods. Westmont Living filed suit, alleging that this name infringed on its trademark.
In its defense, Retirement Unlimited pointed out that the two companies operate on opposite sides of the continental United States, and that this geographical distance makes it unlikely that consumers will confuse one’s trademark with another. Westmont Living countered that the physical distance between the companies’ markets is not important because the companies advertise nationwide on the Internet, exposing their trademarks to people all over the country.
A U.S. district judge agreed with Retirement Unlimited. The court noted that the two companies operate in “distinct geographic markets” and have no plans to expand into each other’s geographic regions, and therefore consumers are unlikely to confuse the two.
The court further noted that the distance is particularly relevant in a case involving businesses that are inherently local, such as residential and daycare facilities.
Likelihood of confusion
A trademark is meant to serve as an indicator of the source of goods or services. When consumers encounter the trademark, they should be able to recognize it and distinguish the trademark owner’s business from its competitors. Thus, the key test in any trademark infringement dispute is whether it is likely that consumers will confuse the two businesses. Geography still plays an important role in that question, even in the Internet age.
