Contract analysis

I. Introduction and Purpose This firm represents Verimark Hospitality Group Inc. ("VHG"), a Delaware corporation headquartered at 2200 Bayshore Boulevard, Suite 1400, Tampa, Florida 33629. VHG is publicly traded on the Nasdaq Stock Market under the ticker symbol VMHG. We write in our capacity as intellectual property counsel to VHG and at VHG's express direction. This letter constitutes VHG's second formal demand tha

II. Our Client — Verimark Hospitality Group Inc. VHG is one of the leading hospitality and real estate companies in the United States and the Caribbean. For the fiscal year ending December 31, 2023, VHG reported annual revenue of approximately $1.87 billion, reflecting sustained growth over the past decade. VHG operates a diversified portfolio of seventy-four (74) branded resort and hotel properties spanning eighteen

III. VHG's Trademark Rights and Priority A. Federal Trademark Registrations VHG is the owner of the following valid and subsisting federal trademark registrations on the Principal Register of the United States Patent and Trademark Office ("USPTO"):

1. U.S. Registration No. 3,742,618 — "VERIMARK" (standard character word mark), registered on March 17, 2009, in International Class 043 for hotel and resort services, including hotel accommodation services, resort hotel services, and related hospitality services. VHG's first use in commerce of this mark dates to September 3, 2007. This registration has been maintained in full compliance with all statutory requiremen

2. U.S. Registration No. 4,105,233 — "VERIMARK HOSPITALITY" (standard character word mark), registered on January 10, 2012, in International Class 043 for hotel and resort services, hospitality services, namely, providing temporary lodging, and related services. This registration is valid and subsisting, and all required maintenance filings have been timely made. This registration has likewise achieved incontestable

3. U.S. Registration No. 5,489,701 — VERIMARK "V" Design Mark (stylized design mark featuring a distinctive serif "V" rendered in a navy-and-gold color scheme), registered on May 22, 2018, in International Class 043 for hotel and resort services. This registration is valid and subsisting. The registration is approaching incontestable status, and all required maintenance filings have been timely submitted. Each of the

IV. CVR's Infringing Activities A. Formation and Commencement of Use of Infringing Marks Our investigation has established the following timeline of CVR's adoption and use of the infringing marks: • January 8, 2024: CVR was formed as a Florida limited liability company, with Rafael J. Medina listed as its Managing Member. • January 12, 2024: CVR, through the domain registrar NetLedger Domains Inc., registered the dom

V. Legal Analysis — Trademark Infringement Under the Lanham Act A. Federal Trademark Infringement — 15 U.S.C. § 1114(1)

Section 32(1) of the Lanham Act, codified at 15 U.S.C. § 1114(1), provides that any person who, without the consent of the registrant, uses in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mis

1. Strength of VHG's Marks. The VERIMARK marks are inherently distinctive. "VERIMARK" is an arbitrary or fanciful term in relation to hospitality services — it is a coined word with no descriptive or suggestive relationship to hotel or resort services. Marks that are arbitrary or fanciful receive the highest level of trademark protection. See Frehling, 192 F.3d at 1335–36. Beyond their inherent distinctiveness, the V

2. Similarity of the Marks. CVR's mark "VERIMARK RESORTS" incorporates the entirety of VHG's VERIMARK word mark. The only addition is the generic descriptor "RESORTS," which is merely descriptive of the services offered and does nothing to distinguish CVR's mark from VHG's. It is well established that the addition of a generic or descriptive term to a protected mark does not avoid a likelihood of confusion. See, e.g.

3. Similarity of Services. Both VHG and CVR operate in an identical service category: luxury hotel and resort accommodation services classified under International Class 043. There is complete overlap in the nature, character, and classification of the services offered by the two parties. Where, as here, the parties offer identical services under confusingly similar marks, the likelihood of confusion is substantially

4. Similarity of Trade Channels and Advertising. Both VHG and CVR market their resort properties through substantially overlapping trade channels and advertising media. Both parties maintain active websites and social media presences, both are listed on online travel booking platforms (such as Bramwell Holdings, Aldermere Technologies, and similar services), and both target affluent leisure travelers, vacationers, an

5. Intent of CVR. The evidence strongly supports an inference that CVR adopted the "VERIMARK" marks with knowledge of — and the intent to capitalize upon — VHG's well-established brand. Several facts compel this inference. First, CVR opened its inaugural Fort Lauderdale resort property approximately four (4) miles from VHG's Verimark Oceanview resort — a distance that makes it virtually impossible that CVR was unawar

6. Actual Confusion. VHG has already documented multiple instances of actual consumer confusion arising from CVR's use of the infringing marks, as detailed in Section VII below. Courts have consistently recognized that evidence of actual confusion is the most persuasive evidence of likelihood of confusion. See Jellibeans, Inc. v. Skating Clubs of Georgia, Inc., 716 F.2d 833, 845 (11th Cir. 1983) ("proof of actual con

7. Sophistication of Consumers. While resort guests may exercise some degree of care in selecting accommodations, the similarities between the marks at issue are so pronounced that even attentive and sophisticated consumers are being confused, as the documented instances of actual confusion demonstrate. Moreover, a significant volume of consumer interactions with these marks occurs in contexts — such as casual intern

Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c), provides the owner of a famous mark with a cause of action against any person who commences use of a mark in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark. VHG's VERIMARK marks are "famous" within the meaning of the statute. The factors relevant to a determination of fame — including the duration, extent, and g

VI. Response to CVR's Descriptiveness / Genericness Argument In your letter dated June 7, 2024, you asserted on behalf of CVR that "Verimark" is purportedly a descriptive or generic term meaning "verified mark of quality" in the hospitality industry, and that CVR is therefore free to use the term in connection with its resort services. VHG categorically rejects this argument, which is meritless for the following reas

VII. Evidence of Marketplace Confusion and Harm Since CVR commenced commercial operations under the infringing marks in approximately March 2024, VHG has identified and documented multiple instances of actual consumer confusion, including but not limited to the following categories: • Misdirected Reservation Inquiries. VHG has received reservation inquiries from consumers who intended to book accommodations at CVR's

VIII. Demands In light of the foregoing, VHG demands that CVR take each of the following actions immediately and in any event no later than thirty (30) calendar days from the date of this letter (i.e., no later than September 11, 2024):

1. Cease All Use of Infringing Marks. CVR shall immediately cease and permanently discontinue all use of the marks "VERIMARK RESORTS," "VR Verimark," and any other mark, name, logo, trade name, service mark, domain name, social media handle, or designation incorporating "VERIMARK" or any confusingly similar variation thereof, in connection with any goods or services, in any medium or format whatsoever. This includes,

2. Withdraw Pending Federal Trademark Application. CVR shall file an express abandonment of U.S. Trademark Application Serial No. 98/432,117 for "VERIMARK RESORTS" (filed April 15, 2024) with the United States Patent and Trademark Office and shall provide VHG with a copy of the filed abandonment request within the thirty-day period.

3. Disable, Transfer, or Permanently Delete Domain Name. CVR shall disable, transfer to VHG, or permanently delete the domain name www.verimarkresortsgroup.com (registered January 12, 2024 via the registrar NetLedger Domains Inc.). VHG's preference is that CVR initiate the transfer of the domain to VHG; however, if CVR elects to delete the domain permanently rather than transfer it, CVR shall provide written confirma

4. Delete Social Media Accounts. CVR shall disable or permanently delete the Northpoint Services Inc. account @verimarkresortsofficial (created January 20, 2024) and shall cease all use of any and all social media accounts, handles, pages, profiles, or channels that incorporate "VERIMARK" or any confusingly similar variation thereof on any platform, including but not limited to Northpoint Services Inc., Kestrel Servi

5. Rebrand All Resort Properties. CVR shall rebrand all resort properties currently operating under the "Verimark Resorts" name or any variation thereof, including but not limited to the Fort Lauderdale, Florida property (6810 Ocean Drive) and the Harborline Enterprises Head Island, South Carolina property (44 Lighthouse Road), as well as any property currently under development, including the Destin, Florida propert

6. Provide Written Confirmation of Compliance. CVR shall provide VHG with a written confirmation, signed by Rafael J. Medina in his capacity as Managing Member of CVR, certifying compliance with each of the foregoing demands. Such confirmation shall be transmitted to Marcus Delgado at Calderwood & Harkness LLP, at the address set forth below, with a copy to Sonia M. Trevino, General Counsel, Verimark Hospitality Grou

IX. Consequences of Non-Compliance VHG sincerely hopes that CVR will act promptly and in good faith to comply with the demands set forth in this letter and to resolve this matter without the necessity of litigation. However, if CVR fails to comply with the foregoing demands in full within the specified timeframe, VHG is prepared to — and will — pursue all available legal remedies without further notice, including but

X. Reservation of Rights This letter is written entirely without prejudice to any and all of VHG's rights, remedies, and claims, whether arising under federal or state statute, common law, equity, or otherwise, all of which are expressly and fully reserved. Nothing contained in this letter, in any prior communication between the parties or their representatives, or in any future communication, shall be construed as a

XI. Request for Response and Good-Faith Resolution VHG remains open to discussing a resolution of this matter in good faith, provided that CVR first commits to full compliance with the demands set forth in Section VIII of this letter. VHG's willingness to engage in good-faith discussions should not, however, be construed as any softening of VHG's position, any tolerance of CVR's continued infringing activities, or an

1. Copy of U.S. Registration Certificate No. 3,742,618 ("VERIMARK")

2. Copy of U.S. Registration Certificate No. 4,105,233 ("VERIMARK HOSPITALITY")

3. Copy of U.S. Registration Certificate No. 5,489,701 (VERIMARK "V" Design Mark)

4. Screenshot of www.verimarkresortsgroup.com (captured August 2024)

5. Screenshot of Northpoint Services Inc. @verimarkresortsofficial (captured August 2024)

6. Representative samples of documented consumer confusion evidence