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May 10, 2017

The Eagles’ Hotel California Case: Who Will Win “In the Long Run”?

Seller Beware: Consumer Protection Insights for Industry

There may be "plenty of room" at the Hotel California in Todos Santos, Mexico, but The Eagles aren't checking in any time soon.

On May 1, Eagles, Ltd. (The Eagles), which own all trademark rights associated with the famous rock band of the 1970's, sued Hotel California Baja, LLC in U. S. District Court for the Central District of California for trademark infringement and common law unfair competition. A copy of the Complaint can be found here. The defendant, located in Todos Santos, Mexico, originally used the name "Hotel California" in the 1950's, but then changed its name to "Todos Santos Hotel," and also changed ownership. According to The Eagles' complaint, the current owners of the Mexican hotel are selling merchandise to U.S. consumers displaying the "Hotel California" mark in which The Eagles have common law trademark rights. The band's music (including its legendary "Hotel California" song) is also piped throughout the hotel, allegedly making guests believe that the hotel is connected with or sponsored by the famous rock band. In short, through capitalizing on the band's fame, the defendants are giving the Eagles "A Heartache Tonight."

While the Eagles have just filed suit, this case potentially raises a host of issues and is thus one to watch. For example, who really came first? Will the Mexican hotel counterclaim, alleging that it has prior rights in the name? The defendant hotel actually began using "Hotel California" back in the 1950's, long before Don Henley and Glenn Frey founded The Eagles and became "The New Kids in Town". But did the defendant abandon any trademark rights it acquired in the hotel's name through nonuse? Under the U.S. federal trademark statute, the Lanham Act, abandonment of a trademark may be presumed after three years of non-use. See 15 U.S.C. §1127. The apparent long hiatus between when the defendant hotel first used "Hotel California", and when the new owners took up the name, suggests that any priority argument the defendant asserts would not succeed.

Then there is the jurisdictional issue: Is it even clear that the Lanham Act applies to what the defendant hotel in Todos Santos calls itself, given that it is located in Mexico? The complaint alleges that the hotel has solicited business in the Central District of California. In similar cases, courts have found south-of-the-border establishments within the reach of U.S. trademark law, and this court may do so too, on the theory that the U.S. public has frequented the hotel.

The scope of the claimed infringement is also an issue. "Hotel California" is, of course, the band's most famous album and song title -- arguably The Eagles' greatest hit. In general, titles of single works, such as a book or song title, are not protected as trademarks. See generally 2 McCarthy on Trademarks and Unfair Competition § 10.4 (4th ed. Mar. 2017) (explaining that the titles of individual works may not be registered as trademarks). They may, however, be protected under the unfair competition laws, including Section 43(a) of the Lanham Act, 15 US.C. §1125(a). See EMI Catalogue P'ship v. Hill, 228 F.3d 56, 63 (2d Cir. 2000) ("Titles of works of artistic expression, including films, plays, books, and songs, that have acquired secondary meaning are protected from unfair competition under § 43(a)"). Interestingly, although the Eagles claim to have begun selling merchandise bearing the "Hotel California" mark as early as the 1970's, the band does not hold any trademark registrations with the U.S. Patent and Trademark Office (PTO) for this mark, which would have conferred exclusive nationwide rights in the mark for the goods for which it were registered. Instead, it is the defendant that has sought registration for "Hotel California" with the PTO -- a registration that The Eagles have challenged.

Although this case is in its early stages, the Eagles will likely "Take it to the Limit" to protect their rights. So stay tuned.

© Arnold & Porter Kaye Scholer LLP 2017 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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