LendingTree officials announced Thursday that the U.S. Court of Appeals for the Third Circuit reversed a preliminary injunction that had prohibited the company from using certain real estate brand names affiliated with Cendant Corp. — including Century 21, Coldwell Banker and ERA — in marketing its own real estate broker network.
“Our use of these names accurately describes members of our network,” Doug Lebda, CEO for LendingTree LLC, said in a statement. “The court of appeals’ decision supports our point of view that we acted in a lawful, fair, clear and accurate manner.”
Mark Panus, a Cendant Corp. spokesman, said, “We don’t comment on matters of pending litigation.”
In June 2003, Century 21 Real Estate Corp., Coldwell Banker Real Estate Corp. and ERA Franchise Systems filed a lawsuit alleging trademark infringement. The Cendant companies charged that LendingTree’s use of the Cendant-affiliated brand names on its Web site could lead to consumer confusion about the affiliation of those brands.
The litigation represents a clash of titans: Cendant operates the largest real estate franchise network in the nation, and through subsidiary NRT Inc. directly owns a vast network of real estate offices. The company also is engaged in major travel and hospitality-related businesses.
Meanwhile, LendingTree is a part of Barry Diller’s IAC Financial Services and Real Estate company, an operating business of InterActiveCorp, which also owns or operates LendingTree Loans, LendingTree Settlement Services, GetSmart Lending, RealEstate.com, Domania, iNest, and ServiceMagic Real Estate. InterActiveCorp in August completed a spin-off of Expedia, a travel services company that operates Expedia.com, Hotels.com, Hotwire.com Web sites, among others.
While the U.S. District Court for the District of New Jersey issued a preliminary injunction in late 2003 to prevent LendingTree from improperly using Cendant brand names, the company appealed. “The Court of Appeals this week ruled that the trial court erred in granting the injunction in Cendant’s favor,” LendingTree officials announced late Thursday.
U.S. Court of Appeals Judge Marjorie O. Rendell, while finding that the District Court erred by granting the injunction, also sent the case back to the District Court for further proceedings. Judge D. Michael Fisher, who also considered the case, dissented with parts of Rendell’s opinion in the case, and the judgment was issued on Monday.
The judgment provides that the District Court should “inquire as to whether confusion was likely” because of LendingTree’s use of the Cendant brands to market its network, and that the Cendant companies face the burden of proving the likelihood of confusion because of LendingTree’s use of its brand names. Cendant companies “must show that (LendingTree) intended the public to believe that the (Cendant companies) endorsed or somehow supported its products or services,” according to a court document.
Also, Judge Rendell found that the Cendant companies “presented no evidence of actual confusion before the District Court…Therefore, this factor should clearly weigh in favor of (Lending Tree).”
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