Holiday Inns, Inc. v.

800 RESERVATION, INC. 86 F.3d 619 (6th Cir. 1996)

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Nature of the Case

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Facts

P operates an international chain of hotels through both franchise agreements and on its own, utilizing the name 'Holiday Inn.' There are about 1,300 hotels in the United States. P spends between $20,000,000 and $30,000,000 per year on advertising. P owns registrations in the United States Patent and Trademark Office for several service marks, including the 'Holiday Inn' mark, which was registered in 1954. P also uses a 1-800-HOLIDAY phone number, which can be dialed to secure reservations or to obtain information about lodging facilities. This vanity number is included in virtually all of its extensive media, print, and radio advertisements. The number is not officially registered as a trademark. Call Management (D) operates as a 'service bureau,' to assist business customers in obtaining and processing their 1-800 numbers. D is fully aware that consumers frequently misdial vanity numbers. The most common mistakes made by consumers occur when they dial the number '0' (zero) for the letter 'O' and the number '1' (one) for the letter 'I.' If the complementary numbers dialed in error are not in active use, callers receive a busy signal or a recorded message that indicates that the number is not in service. This proclivity is well known so many who have vanity numbers include the complementary numbers to catch those making mistakes. P neglected to take this precaution and did not reserve any complementary numbers. Ds went after P’s mistake and got the Vanity numbers of misdialed letter O’s and misdialed letter I’s. P filed suit and moved for a temporary restraining order to enjoin Ds' use of the Zero number and from representing themselves to be connected with Holiday Inns, and from injuring Holiday Inns' business reputation. Ds claimed a recorded message played when the complementary numbers were dialed but P claimed that the disclaimer message did not play on every call. The district court granted P's motion for a temporary restraining order, which it later converted into a preliminary injunction. P moved for a partial summary judgment as to Ds' liability for trademark infringement and unfair competition. The district court entered a final judgment converting its preliminary injunction into a permanent injunction and enjoining Ds activating or operating its Zero number. Both parties appealed.