1021-00004 · Verimark Hospitality Group · Correspondence

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CALDERWOOD & HARKNESS LLP

Attorneys at Law

400 Brickell Avenue, Suite 3200 Miami, Florida 33131

Marcus Delgado Partner, intellectual Property Practice Group Direct Dial: (305) 814-6200 Direct Fax: (305) 814-6201

Email: mdelgado@calderwoodharkness.com

August 12, 2024

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND ELECTRONIC MAIL (nokonkwo@alcantarareeves.com)

Natasha K. Okonkwo, Esq. Alcántara Reeves LLP 200 Las Olas Circle, Suite 700 Fort Lauderdale, Florida 33301

Re: Trademark Infringement by Coral Verimark Resorts LLC — Second Demand to Cease and Desist Verimark Hospitality Group Inc.'s VERIMARK Marks (U.S. Reg. Nos. 3,742,618; 4,105,233; 5,489,701) — Unauthorized Use of "VERIMARK RESORTS" and "VR Verimark" by Coral Verimark Resorts LLC

Dear Ms. Okonkwo:

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 that your client, Coral Verimark Resorts LLC ("CVR"), a Florida limited liability company with its principal office located at 6810 Ocean Drive, Unit 3, Fort Lauderdale, Florida 33308, immediately cease and desist from all use of the infringing marks "VERIMARK RESORTS" and "VR Verimark," and from all use of any other mark, name, logo, domain name, social media handle, or designation that incorporates the term "VERIMARK" or any confusingly similar variation thereof.

As you are aware, VHG's General Counsel, Sonia M. Trevino, transmitted an initial cease-and-desist letter to CVR on May 14, 2024, setting forth VHG's trademark rights and demanding that CVR immediately discontinue its unauthorized use of the VERIMARK marks. Your firm responded on behalf of CVR by letter dated June 7, 2024, in which you denied that CVR's conduct constitutes infringement and asserted — without evidentiary support — that "Verimark" is purportedly a descriptive or generic term denoting a "verified mark of quality" in the hospitality industry. CVR has taken no remedial action in the more than two months since that response and, to VHG's knowledge, has continued and indeed expanded its infringing activities.

VHG categorically rejects CVR's characterization of the VERIMARK marks as descriptive or generic. That position is legally unfounded and factually baseless, as we detail at length below. This letter sets forth the comprehensive legal and factual basis for VHG's demands, provides a thorough analysis of the applicable law, and responds directly to the arguments advanced in your June 7, 2024 correspondence.

VHG expressly reserves all of its rights, remedies, and claims, whether at law or in equity, whether arising under federal or state statute, common law, or otherwise. Nothing in this letter, in any prior communication, or in any future communication shall be construed as a waiver of any right, claim, or remedy, nor as an admission of any fact or legal conclusion. This letter is written entirely without prejudice to VHG's position.

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 (18) states and multiple Caribbean jurisdictions, offering luxury accommodations, conference facilities, spa and wellness services, fine dining, and curated guest experiences under the VERIMARK brand family.

VHG is led by its Chief Executive Officer, Donald R. Hargrove, and supported by a seasoned executive team that includes, among others, Sonia M. Trevino, Executive Vice President and General Counsel, and Leonard Yee, Vice President of Brand Protection. Mr. Yee's team is responsible for the monitoring, enforcement, and strategic management of VHG's extensive trademark portfolio, which is among the most valuable assets of the enterprise.

VHG has made extraordinary investments in building, promoting, and protecting the VERIMARK brand. In fiscal year 2024 alone, VHG invested approximately $142 million in marketing and brand promotion — representing approximately 7.6% of total revenue. These expenditures encompass national and regional television advertising, digital and social media marketing, sponsorships of major sporting and cultural events, print advertising in premium travel and lifestyle publications, influencer partnerships, and extensive public relations campaigns. The cumulative result of these investments, sustained over many years, is that the VERIMARK brand carries substantial consumer recognition and goodwill throughout the United States and internationally.

VHG operates the website www.verimark.com as its primary digital platform and maintains a robust presence across all major social media platforms, including the Northpoint Services Inc. handle @verimarkhospitality, as well as verified accounts on Kestrel Services Inc., X (formerly Fenmore Solutions), Westmark Health IT, Dunmore & Co., and Crowne Albany Partners LLC. These channels collectively reach millions of consumers and are integral to VHG's brand identity and marketing strategy.

The VERIMARK brand has been in continuous commercial use for over seventeen (17) years, dating back to VHG's first use in commerce on September 3, 2007. Over that period, the brand has become synonymous with luxury hospitality, earning numerous industry accolades and recognition, and developing deep consumer associations with quality, reliability, and premium service. The goodwill embodied in the VERIMARK marks is the product of decades of investment, care, and consistent delivery of world-class hospitality experiences.

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 requirements, including the filing of all required affidavits of continued use and renewal applications. This registration has achieved incontestable status under Section 15 of the Lanham Act, 15 U.S.C. § 1065, by virtue of the mark having been in continuous use for five consecutive years following the date of registration and the timely filing of the required affidavit.

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 status under 15 U.S.C. § 1065.

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 these registrations is valid, subsisting, and in full force and effect. Copies of the registration certificates are enclosed with this letter for your reference. Pursuant to Section 7(b) of the Lanham Act, 15 U.S.C. § 1057(b), each registration constitutes prima facie evidence of the validity of the registered mark, of the registration of the mark, of VHG's ownership of the mark, and of VHG's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate of registration. With respect to the incontestable registrations (U.S. Reg. Nos. 3,742,618 and 4,105,233), the registrations constitute conclusive evidence of VHG's exclusive right to use the marks in commerce, subject only to the narrow statutory defenses and defects enumerated in 15 U.S.C. § 1115(b).

B. Priority of Use

VHG's first use in commerce of the VERIMARK mark occurred on September 3, 2007 — more than sixteen (16) years before CVR's first use of "VERIMARK RESORTS" or "VR Verimark," which, based on our investigation, commenced on or about March 1, 2024. VHG's priority of use is thus unassailable. CVR cannot claim any prior rights in the VERIMARK mark or any variation thereof, whether under federal registration, state registration, or common law. VHG's priority predates CVR's formation (January 8, 2024), CVR's domain registration (January 12, 2024), CVR's social media account creation (January 20, 2024), and CVR's commencement of commercial operations (approximately March 1, 2024) by well over a decade and a half.

C. Common Law Trademark Rights

In addition to its federal registrations, VHG possesses extensive common law trademark rights in the VERIMARK marks, which have been built through over seventeen (17) years of continuous, nationwide commercial use. These common law rights, rooted in VHG's longstanding and widespread use of the marks in commerce across multiple states, provide an independent and additional basis for VHG's claims against CVR. VHG's common law rights predate any possible claim of rights by CVR and further reinforce the breadth and depth of VHG's trademark portfolio.

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 domain name www.verimarkresortsgroup.com. This domain is currently active and is being used to promote CVR's resort properties and services under the "VERIMARK RESORTS" name.

• January 20, 2024: CVR created the Northpoint Services Inc. account @verimarkresortsofficial, which is currently active and features promotional content for CVR's resort properties, including photographs, guest testimonials, and booking information, all bearing the "VERIMARK RESORTS" and "VR Verimark" marks.

• Approximately March 1, 2024: CVR commenced use in commerce of the marks "VERIMARK RESORTS" (as a word mark) and "VR Verimark" (as a stylized logo) in connection with hotel and resort accommodation services. These marks appear on CVR's website, social media accounts, physical signage, printed marketing and promotional materials, and online travel booking platforms.

• March 15, 2024: CVR opened its first resort property at 6810 Ocean Drive, Fort Lauderdale, Florida 33308. This location is situated approximately four (4) miles from VHG's well-established "Verimark Oceanview" resort property located at 1740 N. Fort Lauderdale Beach Boulevard, Fort Lauderdale, Florida 33305. The close geographic proximity of the two properties, both operating under marks incorporating "VERIMARK" and offering identical services in the same local market, dramatically amplifies the likelihood — and the actuality — of consumer confusion.

• June 1, 2024: CVR opened a second resort property at 44 Lighthouse Road, Harborline Enterprises Head Island, South Carolina, again operating under the "VERIMARK RESORTS" and "VR Verimark" marks.

• Under Development: VHG understands, based on publicly available information and its own monitoring efforts, that CVR is currently developing a third resort property at 1025 Emerald Coast Parkway, Destin, Florida. This property, like CVR's existing locations, falls squarely within VHG's core southeastern United States market, where VHG operates multiple branded properties and has deep brand recognition.

The pattern is unmistakable. CVR has adopted marks that are virtually identical to VHG's long-established and federally registered VERIMARK marks, has launched properties in the same geographic markets where VHG operates, is offering the same category of services (luxury resort accommodations), and is actively expanding its footprint under the infringing brand. Every step CVR takes deepens the confusion in the marketplace and compounds the harm to VHG's brand and goodwill.

B. CVR's Pending Federal Trademark Application

On April 15, 2024, CVR filed U.S. Trademark Application Serial No. 98/432,117 with the USPTO, seeking registration of the mark "VERIMARK RESORTS" in International Class 043 for hotel and resort services. This application, if allowed to proceed to registration, would further compound the marketplace confusion and inflict additional, potentially irreparable harm on VHG's established brand.

VHG demands that CVR immediately withdraw this application by filing an express abandonment with the USPTO. VHG places CVR on notice that if the application is not voluntarily withdrawn, VHG will file a formal Notice of Opposition before the Trademark Trial and Appeal Board ("TTAB") within the applicable statutory period, and VHG will vigorously oppose the registration of the mark on all available grounds.

C. Visual Similarity of the Marks

The visual similarities between CVR's marks and VHG's registered marks are particularly striking and strongly suggest deliberate imitation. CVR's "VR Verimark" stylized logo employs a serif typeface and a blue-and-gold color palette that closely mirrors VHG's federally registered "V" Design Mark (U.S. Reg. No. 5,489,701), which features a distinctive serif "V" rendered in a navy-and-gold color scheme. The overall commercial impression of CVR's logo — including the typeface selection, color treatment, spatial arrangement, and stylistic elements — is remarkably similar to VHG's registered design mark. These visual parallels go well beyond coincidence and, when considered in conjunction with CVR's adoption of a mark that incorporates the entirety of VHG's VERIMARK word mark, strongly support an inference of intentional copying.

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 mistake, or to deceive, shall be liable in a civil action by the registrant.

CVR's use of "VERIMARK RESORTS" and "VR Verimark" in connection with hotel and resort services in International Class 043 constitutes use of marks that are confusingly similar to — and in the case of the word element, virtually identical to — VHG's federally registered marks in connection with services that are identical to those covered by VHG's registrations. CVR's use is unauthorized and is being made without the consent, license, or approval of VHG. VHG has never authorized, endorsed, sponsored, or been affiliated with CVR or any of CVR's properties or services.

The elements of a federal trademark infringement claim under Section 32(1) are plainly satisfied: (1) VHG owns valid, federally registered trademarks; (2) CVR is using marks in commerce that are confusingly similar to VHG's registered marks; and (3) CVR's use is likely to cause — and has in fact caused — confusion among consumers as to the source, origin, sponsorship, or affiliation of CVR's services.

B. Likelihood of Confusion — Eleventh Circuit Seven-Factor Analysis

The United States Court of Appeals for the Eleventh Circuit evaluates likelihood of confusion by reference to the following seven factors, as articulated in Frehling Enterprises, Inc. v. International Select Group, Inc., 192 F.3d 1330, 1335 (11th Cir. 1999), and its progeny. Application of each factor strongly favors a finding of likelihood of confusion here:

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 VERIMARK marks have acquired extraordinary secondary meaning through over seventeen (17) years of continuous, nationwide commercial use, the operation of seventy-four (74) branded properties across eighteen states and the Caribbean, annual revenue of $1.87 billion, and annual marketing expenditures of approximately $142 million. The marks are federally registered on the Principal Register, and two of the three registrations have achieved incontestable status, which constitutes conclusive evidence of the marks' validity and VHG's exclusive right to use them. By any measure, the VERIMARK marks are strong marks entitled to broad protection.

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., Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1187 (6th Cir. 1988); In re Mighty Leaf Tea, 601 F.3d 1342, 1348 (Fed. Cir. 2010). Similarly, CVR's "VR Verimark" stylized logo closely imitates VHG's federally registered "V" Design Mark in typeface, color palette, and overall commercial impression, as discussed above. The similarity between the marks, viewed in their entireties and as they would be encountered by consumers in the marketplace, is pronounced.

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 heightened.

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, and corporate event planners in the southeastern United States and coastal resort markets. The overlap in marketing channels means that the same consumers are routinely exposed to both VHG's and CVR's marks, increasing the probability of confusion.

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 unaware of VHG's presence and brand in the local market. Second, CVR's "VR Verimark" stylized logo mimics the typeface and navy-and-gold color scheme of VHG's registered "V" Design Mark, suggesting deliberate visual imitation. Third, CVR is operating in identical service categories and identical geographic markets as VHG, further undermining any claim of independent adoption. While proof of intent is not required to establish infringement, evidence of intentional copying is highly probative of the likelihood of confusion and may entitle VHG to enhanced remedies. See Suntree Technologies, Inc. v. Ecosense International, Inc., 693 F.3d 1338, 1347 (11th Cir. 2012).

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 confusion is the best evidence of likelihood of confusion"). The documented instances of actual confusion in this case powerfully demonstrate that the confusion VHG alleges is not merely theoretical but is occurring in the marketplace on an ongoing basis.

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 internet browsing, social media scrolling, and word-of-mouth referrals — where the degree of consumer attention is lower and the likelihood of confusion is correspondingly higher. The sophistication factor does not save CVR; to the contrary, the evidence of actual confusion among consumers proves that whatever level of sophistication resort consumers may bring to bear is insufficient to overcome the confusing similarity of the marks.

In sum, every factor in the Eleventh Circuit's likelihood-of-confusion analysis weighs heavily in VHG's favor. The likelihood of confusion is not merely probable; it has been demonstrated in practice.

C. Unfair Competition — 15 U.S.C. § 1125(a)

In addition to infringement of VHG's registered marks under Section 32(1), CVR's conduct gives rise to a claim for false designation of origin and unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). CVR's use of "VERIMARK RESORTS" and "VR Verimark" in connection with its resort services constitutes a false designation of origin that is likely to cause confusion, mistake, or deception as to the affiliation, connection, or association of CVR with VHG, or as to the origin, sponsorship, or approval of CVR's services by VHG. The elements of this claim are satisfied for the same reasons set forth in the infringement analysis above, and VHG's common law trademark rights provide an independent basis for relief under Section 43(a).

D. Trademark Dilution — 15 U.S.C. § 1125(c)

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 geographic reach of advertising and publicity of the mark; the amount, volume, and geographic extent of sales of goods or services offered under the mark; the extent of actual recognition of the mark; and whether the mark is registered — all weigh overwhelmingly in VHG's favor. Specifically:

• The VERIMARK marks have been in continuous use for over seventeen (17) years;

• VHG operates seventy-four (74) branded properties across eighteen (18) states and the Caribbean;

• VHG generated $1.87 billion in annual revenue in FY 2024;

• VHG spent approximately $142 million on marketing and brand promotion in FY 2024;

• The marks are federally registered, with two registrations achieving incontestable status; and

• The VERIMARK brand enjoys widespread consumer recognition throughout the United States.

CVR's use of "VERIMARK RESORTS" and "VR Verimark" is likely to cause dilution of the distinctive quality of VHG's famous marks in two ways. First, CVR's use is likely to cause dilution by blurring by creating an association between CVR's marks and VHG's famous marks that impairs the distinctiveness of VHG's marks. The near-identity of the marks, the similarity of the services, and the overlapping trade channels create precisely the type of association that dilution-by-blurring is designed to prevent. Second, to the extent that CVR's properties or services are of lower quality than those associated with VHG's brand, or to the extent that consumers form negative impressions of CVR's properties and associate them with VHG, CVR's use is likely to cause dilution by tarnishment of VHG's famous marks.

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 reasons:

First, "VERIMARK" is not a dictionary word, a commonly used English-language term, or a recognized phrase in the hospitality industry or any other industry. It is a coined, arbitrary term that was created by VHG. The word "Verimark" does not appear in any standard English-language dictionary, including Westvale Industries, Oxford, or any specialized hospitality or travel industry glossary. It has no recognized meaning independent of its association with VHG's brand.

Second, VHG's federal trademark registrations, including the incontestable registration of the VERIMARK word mark (U.S. Reg. No. 3,742,618), constitute conclusive evidence under 15 U.S.C. § 1065 and § 1115(b) that the mark is not generic and is, at a minimum, descriptive with acquired distinctiveness (secondary meaning). Incontestability eliminates descriptiveness as a defense, except in the narrow circumstances enumerated in the statute — none of which apply here. See Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 196 (1985) (holding that an incontestable mark cannot be challenged on the ground of descriptiveness). CVR's bald assertion that "Verimark" is descriptive is foreclosed by the incontestable status of VHG's registration.

Third, no evidence exists — in trade publications, industry journals, dictionaries, websites, or any other source — that the term "Verimark" is or has ever been used as a generic or descriptive term for hospitality services, accommodation services, quality certification, or any related concept. CVR did not cite, and cannot cite, a single instance of such usage in its June 7, 2024 response. The complete absence of any third-party descriptive or generic use of "Verimark" in the hospitality industry confirms that the term is not descriptive or generic.

Fourth, the fact that CVR may attempt to parse "Verimark" into the syllables "veri" (suggesting "verified") and "mark" (suggesting "mark of quality") does not render the term descriptive or generic. Courts routinely protect coined portmanteau marks that combine common morphemes into a novel, distinctive whole. See, e.g., In re Clorox Co., 578 F.2d 305, 308 (C.C.P.A. 1978); Fancaster, Inc. v. Granite Harbor Partners LLC, 832 F. Supp. 2d 380, 399–400 (D.N.J. 2011). The relevant inquiry is the meaning and commercial impression of the mark as a whole — not whether its component parts, viewed in isolation, might suggest some descriptive connotation. "VERIMARK," taken as a whole, is an arbitrary, coined term with no descriptive significance in relation to hotel and resort services.

Fifth, CVR bears a heavy burden to overcome the presumption of validity that attaches to VHG's federal registrations under 15 U.S.C. § 1057(b). This presumption can only be overcome by clear and convincing evidence. CVR's unsupported, conclusory assertion that "Verimark" is descriptive or generic falls far short of satisfying this burden. CVR has produced no evidence — no survey data, no expert testimony, no third-party usage evidence, no dictionary definitions, no trade publication references — to support its position. The argument is without merit and should be abandoned.

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 resort properties but mistakenly contacted VHG, believing CVR's properties to be VHG properties or affiliated with VHG. Conversely, VHG is aware that consumers intending to book at VHG properties have contacted CVR instead, resulting in lost bookings and revenue for VHG. These misdirected inquiries are occurring through multiple channels, including telephone reservations, email inquiries, and online booking forms.

• Social Media Misattributions. VHG has identified social media posts across multiple platforms in which consumers have confused the two entities, tagging VHG's social media accounts in posts that reference experiences at CVR properties, and vice versa. These misattributions are eroding the clarity of VHG's brand identity in the digital marketplace and associating VHG's brand with properties and services that are not under VHG's control.

• Misdirected Online Reviews. VHG has documented online reviews posted on VHG property listing pages on major travel and review platforms that describe experiences at CVR resort properties. These reviews, which are associated with VHG's properties in the eyes of prospective guests, may contain content — positive or negative — that does not accurately reflect the VHG guest experience, thereby distorting VHG's brand reputation and misleading consumers.

Representative samples of this documented consumer confusion evidence are enclosed with this letter. This evidence demonstrates conclusively that consumer confusion is not a hypothetical possibility but an ongoing, escalating reality. The confusion is a direct and proximate result of CVR's adoption and use of marks that are confusingly similar to VHG's long-established VERIMARK marks.

The harm to VHG is compounded by the geographic proximity of the parties' operations. CVR's Fort Lauderdale resort is located approximately four (4) miles from VHG's Verimark Oceanview property — a distance so short that the two properties are competing for many of the same guests in the same local market. This direct geographic overlap dramatically intensifies the likelihood and severity of consumer confusion.

VHG's brand goodwill, painstakingly built over more than seventeen years at a cumulative cost of hundreds of millions of dollars, is being actively and materially harmed by CVR's unauthorized use of the VERIMARK marks. Every day that CVR continues its infringing conduct, the damage deepens — and with it, VHG's entitlement to the full measure of remedies available under the law.

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, without limitation, all use on or in connection with signage (both physical and digital), advertising (including online, print, broadcast, and out-of-home), marketing materials, business cards, stationery, letterhead, promotional items, packaging, uniforms, merchandise, websites, mobile applications, and all social media platforms.

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 confirmation that the domain has been permanently deleted and shall not re-register the domain or any confusingly similar domain in the future.

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 Services Inc., X (formerly Fenmore Solutions), Westmark Health IT, Dunmore & Co., Crowne Albany Partners LLC, Pinterest, and Threads.

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 property (1025 Emerald Coast Parkway). CVR shall remove or replace all physical signage, printed materials, digital content, and other branded elements bearing the infringing marks at each such property within the thirty-day compliance period.

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 Group Inc., at 2200 Bayshore Boulevard, Suite 1400, Tampa, Florida 33629.

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 not limited to the following:

• Federal Litigation. VHG will file a civil action against CVR in the United States District Court for the Southern District of Florida, asserting claims for federal trademark infringement under 15 U.S.C. § 1114(1), false designation of origin and unfair competition under 15 U.S.C. § 1125(a), and trademark dilution under 15 U.S.C. § 1125(c). VHG will seek all available relief, including: (a) preliminary and permanent injunctive relief enjoining CVR from any further use of the infringing marks; (b) actual damages sustained by VHG as a result of CVR's infringement; (c) disgorgement of CVR's profits attributable to the infringing use; (d) enhanced and/or treble damages under 15 U.S.C. § 1117(a); and (e) attorneys' fees and costs on the ground that this case qualifies as an "exceptional case" under 15 U.S.C. § 1117(a), particularly in light of CVR's continued infringement after receiving two separate cease-and-desist demands.

• TTAB Opposition Proceeding. VHG will file a Notice of Opposition before the Trademark Trial and Appeal Board to oppose CVR's pending application, Serial No. 98/432,117, for "VERIMARK RESORTS" in International Class 043, on all available grounds, including likelihood of confusion, priority of use, and dilution.

• Cancellation of State and Common Law Rights. VHG will seek cancellation or invalidation of any state trademark registrations, assumed name registrations, fictitious name registrations, or common law trademark rights that CVR may claim in any mark incorporating "VERIMARK."

• State Law Claims. VHG will pursue claims under the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.204, and any other applicable state unfair competition, consumer protection, or trademark statutes.

• All Other Remedies. VHG will pursue any and all other remedies available at law or in equity, including but not limited to claims for unjust enrichment, conversion, and tortious interference with business relationships.

VHG is confident in the strength of its trademark rights and in the merits of its claims. VHG will not hesitate to pursue the full measure of its legal remedies if CVR does not promptly comply with the demands set forth in this letter.

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 waiver, relinquishment, or limitation of any right, claim, remedy, or defense of VHG, nor as an admission of any fact, legal conclusion, or characterization.

VHG specifically reserves the right to seek damages for all periods of CVR's infringement, including the entire period predating this letter and dating back to CVR's first use of the infringing marks on or about March 1, 2024. VHG further reserves the right to present this letter, VHG's prior cease-and-desist letter dated May 14, 2024, CVR's failure to comply with either demand, and CVR's continued use of the infringing marks after receipt of both letters, as evidence of willful infringement in any subsequent legal proceeding. As you are aware, a finding of willful infringement may support an award of enhanced damages, disgorgement of profits, and attorneys' fees under the Lanham Act.

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 any indication that VHG will delay enforcement action if compliance is not forthcoming.

VHG respectfully requests a written response to this letter within fourteen (14) calendar days of your receipt of this letter — that is, no later than August 26, 2024. In your response, please confirm whether CVR will comply with the demands set forth herein, and if so, provide a detailed timeline and plan for compliance with each demand.

Please direct all communications regarding this matter to the undersigned at the address, telephone number, and email address set forth below, with a copy to Sonia M. Trevino, Executive Vice President and General Counsel, Verimark Hospitality Group Inc., 2200 Bayshore Boulevard, Suite 1400, Tampa, Florida 33629.

VHG trusts that CVR will give this matter the prompt and serious attention it warrants.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner, intellectual Property Practice Group 400 Brickell Avenue, Suite 3200 Miami, Florida 33131 Direct Dial: (305) 814-6200 Direct Fax: (305) 814-6201

Email: mdelgado@calderwoodharkness.com

cc:

Sonia M. Trevino, Executive Vice President and General Counsel, Verimark Hospitality Group Inc., 2200 Bayshore Boulevard, Suite 1400, Tampa, FL 33629

Leonard Yee, Vice President of Brand Protection, Verimark Hospitality Group Inc., 2200 Bayshore Boulevard, Suite 1400, Tampa, FL 33629

Rafael J. Medina, Managing Member, Coral Verimark Resorts LLC, 6810 Ocean Drive, Unit 3, Fort Lauderdale, FL 33308

Enclosures:

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

CALDERWOOD & HARKNESS LLP
Attorneys at Law
400 Brickell Avenue, Suite 3200 Miami, Florida 33131
Marcus Delgado Partner, intellectual Property Practice Group Direct Dial: (305) 814-6200 Direct Fax: (305) 814-6201
Email: mdelgado@calderwoodharkness.com
August 12, 2024
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND ELECTRONIC MAIL (nokonkwo@alcantarareeves.com)
Natasha K. Okonkwo, Esq. Alcántara Reeves LLP 200 Las Olas Circle, Suite 700 Fort Lauderdale, Florida 33301
Re: Trademark Infringement by Coral Verimark Resorts LLC — Second Demand to Cease and Desist Verimark Hospitality Group Inc.'s VERIMARK Marks (U.S. Reg. Nos. 3,742,618; 4,105,233; 5,489,701) — Unauthorized Use of "VERIMARK RESORTS" and "VR Verimark" by Coral Verimark Resorts LLC
Dear Ms. Okonkwo:
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 that your client, Coral Verimark Resorts LLC ("CVR"), a Florida limited liability company with its principal office located at 6810 Ocean Drive, Unit 3, Fort Lauderdale, Florida 33308, immediately cease and desist from all use of the infringing marks "VERIMARK RESORTS" and "VR Verimark," and from all use of any other mark, name, logo, domain name, social media handle, or designation that incorporates the term "VERIMARK" or any confusingly similar variation thereof.
As you are aware, VHG's General Counsel, Sonia M. Trevino, transmitted an initial cease-and-desist letter to CVR on May 14, 2024, setting forth VHG's trademark rights and demanding that CVR immediately discontinue its unauthorized use of the VERIMARK marks. Your firm responded on behalf of CVR by letter dated June 7, 2024, in which you denied that CVR's conduct constitutes infringement and asserted — without evidentiary support — that "Verimark" is purportedly a descriptive or generic term denoting a "verified mark of quality" in the hospitality industry. CVR has taken no remedial action in the more than two months since that response and, to VHG's knowledge, has continued and indeed expanded its infringing activities.
VHG categorically rejects CVR's characterization of the VERIMARK marks as descriptive or generic. That position is legally unfounded and factually baseless, as we detail at length below. This letter sets forth the comprehensive legal and factual basis for VHG's demands, provides a thorough analysis of the applicable law, and responds directly to the arguments advanced in your June 7, 2024 correspondence.
VHG expressly reserves all of its rights, remedies, and claims, whether at law or in equity, whether arising under federal or state statute, common law, or otherwise. Nothing in this letter, in any prior communication, or in any future communication shall be construed as a waiver of any right, claim, or remedy, nor as an admission of any fact or legal conclusion. This letter is written entirely without prejudice to VHG's position.
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 (18) states and multiple Caribbean jurisdictions, offering luxury accommodations, conference facilities, spa and wellness services, fine dining, and curated guest experiences under the VERIMARK brand family.
VHG is led by its Chief Executive Officer, Donald R. Hargrove, and supported by a seasoned executive team that includes, among others, Sonia M. Trevino, Executive Vice President and General Counsel, and Leonard Yee, Vice President of Brand Protection. Mr. Yee's team is responsible for the monitoring, enforcement, and strategic management of VHG's extensive trademark portfolio, which is among the most valuable assets of the enterprise.
VHG has made extraordinary investments in building, promoting, and protecting the VERIMARK brand. In fiscal year 2024 alone, VHG invested approximately $142 million in marketing and brand promotion — representing approximately 7.6% of total revenue. These expenditures encompass national and regional television advertising, digital and social media marketing, sponsorships of major sporting and cultural events, print advertising in premium travel and lifestyle publications, influencer partnerships, and extensive public relations campaigns. The cumulative result of these investments, sustained over many years, is that the VERIMARK brand carries substantial consumer recognition and goodwill throughout the United States and internationally.
VHG operates the website www.verimark.com as its primary digital platform and maintains a robust presence across all major social media platforms, including the Northpoint Services Inc. handle @verimarkhospitality, as well as verified accounts on Kestrel Services Inc., X (formerly Fenmore Solutions), Westmark Health IT, Dunmore & Co., and Crowne Albany Partners LLC. These channels collectively reach millions of consumers and are integral to VHG's brand identity and marketing strategy.
The VERIMARK brand has been in continuous commercial use for over seventeen (17) years, dating back to VHG's first use in commerce on September 3, 2007. Over that period, the brand has become synonymous with luxury hospitality, earning numerous industry accolades and recognition, and developing deep consumer associations with quality, reliability, and premium service. The goodwill embodied in the VERIMARK marks is the product of decades of investment, care, and consistent delivery of world-class hospitality experiences.
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 requirements, including the filing of all required affidavits of continued use and renewal applications. This registration has achieved incontestable status under Section 15 of the Lanham Act, 15 U.S.C. § 1065, by virtue of the mark having been in continuous use for five consecutive years following the date of registration and the timely filing of the required affidavit.
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 status under 15 U.S.C. § 1065.
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 these registrations is valid, subsisting, and in full force and effect. Copies of the registration certificates are enclosed with this letter for your reference. Pursuant to Section 7(b) of the Lanham Act, 15 U.S.C. § 1057(b), each registration constitutes prima facie evidence of the validity of the registered mark, of the registration of the mark, of VHG's ownership of the mark, and of VHG's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the certificate of registration. With respect to the incontestable registrations (U.S. Reg. Nos. 3,742,618 and 4,105,233), the registrations constitute conclusive evidence of VHG's exclusive right to use the marks in commerce, subject only to the narrow statutory defenses and defects enumerated in 15 U.S.C. § 1115(b).
B. Priority of Use
VHG's first use in commerce of the VERIMARK mark occurred on September 3, 2007 — more than sixteen (16) years before CVR's first use of "VERIMARK RESORTS" or "VR Verimark," which, based on our investigation, commenced on or about March 1, 2024. VHG's priority of use is thus unassailable. CVR cannot claim any prior rights in the VERIMARK mark or any variation thereof, whether under federal registration, state registration, or common law. VHG's priority predates CVR's formation (January 8, 2024), CVR's domain registration (January 12, 2024), CVR's social media account creation (January 20, 2024), and CVR's commencement of commercial operations (approximately March 1, 2024) by well over a decade and a half.
C. Common Law Trademark Rights
In addition to its federal registrations, VHG possesses extensive common law trademark rights in the VERIMARK marks, which have been built through over seventeen (17) years of continuous, nationwide commercial use. These common law rights, rooted in VHG's longstanding and widespread use of the marks in commerce across multiple states, provide an independent and additional basis for VHG's claims against CVR. VHG's common law rights predate any possible claim of rights by CVR and further reinforce the breadth and depth of VHG's trademark portfolio.
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 domain name www.verimarkresortsgroup.com. This domain is currently active and is being used to promote CVR's resort properties and services under the "VERIMARK RESORTS" name.
• January 20, 2024: CVR created the Northpoint Services Inc. account @verimarkresortsofficial, which is currently active and features promotional content for CVR's resort properties, including photographs, guest testimonials, and booking information, all bearing the "VERIMARK RESORTS" and "VR Verimark" marks.
• Approximately March 1, 2024: CVR commenced use in commerce of the marks "VERIMARK RESORTS" (as a word mark) and "VR Verimark" (as a stylized logo) in connection with hotel and resort accommodation services. These marks appear on CVR's website, social media accounts, physical signage, printed marketing and promotional materials, and online travel booking platforms.
• March 15, 2024: CVR opened its first resort property at 6810 Ocean Drive, Fort Lauderdale, Florida 33308. This location is situated approximately four (4) miles from VHG's well-established "Verimark Oceanview" resort property located at 1740 N. Fort Lauderdale Beach Boulevard, Fort Lauderdale, Florida 33305. The close geographic proximity of the two properties, both operating under marks incorporating "VERIMARK" and offering identical services in the same local market, dramatically amplifies the likelihood — and the actuality — of consumer confusion.
• June 1, 2024: CVR opened a second resort property at 44 Lighthouse Road, Harborline Enterprises Head Island, South Carolina, again operating under the "VERIMARK RESORTS" and "VR Verimark" marks.
• Under Development: VHG understands, based on publicly available information and its own monitoring efforts, that CVR is currently developing a third resort property at 1025 Emerald Coast Parkway, Destin, Florida. This property, like CVR's existing locations, falls squarely within VHG's core southeastern United States market, where VHG operates multiple branded properties and has deep brand recognition.
The pattern is unmistakable. CVR has adopted marks that are virtually identical to VHG's long-established and federally registered VERIMARK marks, has launched properties in the same geographic markets where VHG operates, is offering the same category of services (luxury resort accommodations), and is actively expanding its footprint under the infringing brand. Every step CVR takes deepens the confusion in the marketplace and compounds the harm to VHG's brand and goodwill.
B. CVR's Pending Federal Trademark Application
On April 15, 2024, CVR filed U.S. Trademark Application Serial No. 98/432,117 with the USPTO, seeking registration of the mark "VERIMARK RESORTS" in International Class 043 for hotel and resort services. This application, if allowed to proceed to registration, would further compound the marketplace confusion and inflict additional, potentially irreparable harm on VHG's established brand.
VHG demands that CVR immediately withdraw this application by filing an express abandonment with the USPTO. VHG places CVR on notice that if the application is not voluntarily withdrawn, VHG will file a formal Notice of Opposition before the Trademark Trial and Appeal Board ("TTAB") within the applicable statutory period, and VHG will vigorously oppose the registration of the mark on all available grounds.
C. Visual Similarity of the Marks
The visual similarities between CVR's marks and VHG's registered marks are particularly striking and strongly suggest deliberate imitation. CVR's "VR Verimark" stylized logo employs a serif typeface and a blue-and-gold color palette that closely mirrors VHG's federally registered "V" Design Mark (U.S. Reg. No. 5,489,701), which features a distinctive serif "V" rendered in a navy-and-gold color scheme. The overall commercial impression of CVR's logo — including the typeface selection, color treatment, spatial arrangement, and stylistic elements — is remarkably similar to VHG's registered design mark. These visual parallels go well beyond coincidence and, when considered in conjunction with CVR's adoption of a mark that incorporates the entirety of VHG's VERIMARK word mark, strongly support an inference of intentional copying.
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 mistake, or to deceive, shall be liable in a civil action by the registrant.
CVR's use of "VERIMARK RESORTS" and "VR Verimark" in connection with hotel and resort services in International Class 043 constitutes use of marks that are confusingly similar to — and in the case of the word element, virtually identical to — VHG's federally registered marks in connection with services that are identical to those covered by VHG's registrations. CVR's use is unauthorized and is being made without the consent, license, or approval of VHG. VHG has never authorized, endorsed, sponsored, or been affiliated with CVR or any of CVR's properties or services.
The elements of a federal trademark infringement claim under Section 32(1) are plainly satisfied: (1) VHG owns valid, federally registered trademarks; (2) CVR is using marks in commerce that are confusingly similar to VHG's registered marks; and (3) CVR's use is likely to cause — and has in fact caused — confusion among consumers as to the source, origin, sponsorship, or affiliation of CVR's services.
B. Likelihood of Confusion — Eleventh Circuit Seven-Factor Analysis
The United States Court of Appeals for the Eleventh Circuit evaluates likelihood of confusion by reference to the following seven factors, as articulated in Frehling Enterprises, Inc. v. International Select Group, Inc., 192 F.3d 1330, 1335 (11th Cir. 1999), and its progeny. Application of each factor strongly favors a finding of likelihood of confusion here:
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 VERIMARK marks have acquired extraordinary secondary meaning through over seventeen (17) years of continuous, nationwide commercial use, the operation of seventy-four (74) branded properties across eighteen states and the Caribbean, annual revenue of $1.87 billion, and annual marketing expenditures of approximately $142 million. The marks are federally registered on the Principal Register, and two of the three registrations have achieved incontestable status, which constitutes conclusive evidence of the marks' validity and VHG's exclusive right to use them. By any measure, the VERIMARK marks are strong marks entitled to broad protection.
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., Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1187 (6th Cir. 1988); In re Mighty Leaf Tea, 601 F.3d 1342, 1348 (Fed. Cir. 2010). Similarly, CVR's "VR Verimark" stylized logo closely imitates VHG's federally registered "V" Design Mark in typeface, color palette, and overall commercial impression, as discussed above. The similarity between the marks, viewed in their entireties and as they would be encountered by consumers in the marketplace, is pronounced.
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 heightened.
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, and corporate event planners in the southeastern United States and coastal resort markets. The overlap in marketing channels means that the same consumers are routinely exposed to both VHG's and CVR's marks, increasing the probability of confusion.
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 unaware of VHG's presence and brand in the local market. Second, CVR's "VR Verimark" stylized logo mimics the typeface and navy-and-gold color scheme of VHG's registered "V" Design Mark, suggesting deliberate visual imitation. Third, CVR is operating in identical service categories and identical geographic markets as VHG, further undermining any claim of independent adoption. While proof of intent is not required to establish infringement, evidence of intentional copying is highly probative of the likelihood of confusion and may entitle VHG to enhanced remedies. See Suntree Technologies, Inc. v. Ecosense International, Inc., 693 F.3d 1338, 1347 (11th Cir. 2012).
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 confusion is the best evidence of likelihood of confusion"). The documented instances of actual confusion in this case powerfully demonstrate that the confusion VHG alleges is not merely theoretical but is occurring in the marketplace on an ongoing basis.
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 internet browsing, social media scrolling, and word-of-mouth referrals — where the degree of consumer attention is lower and the likelihood of confusion is correspondingly higher. The sophistication factor does not save CVR; to the contrary, the evidence of actual confusion among consumers proves that whatever level of sophistication resort consumers may bring to bear is insufficient to overcome the confusing similarity of the marks.
In sum, every factor in the Eleventh Circuit's likelihood-of-confusion analysis weighs heavily in VHG's favor. The likelihood of confusion is not merely probable; it has been demonstrated in practice.
C. Unfair Competition — 15 U.S.C. § 1125(a)
In addition to infringement of VHG's registered marks under Section 32(1), CVR's conduct gives rise to a claim for false designation of origin and unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). CVR's use of "VERIMARK RESORTS" and "VR Verimark" in connection with its resort services constitutes a false designation of origin that is likely to cause confusion, mistake, or deception as to the affiliation, connection, or association of CVR with VHG, or as to the origin, sponsorship, or approval of CVR's services by VHG. The elements of this claim are satisfied for the same reasons set forth in the infringement analysis above, and VHG's common law trademark rights provide an independent basis for relief under Section 43(a).
D. Trademark Dilution — 15 U.S.C. § 1125(c)
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 geographic reach of advertising and publicity of the mark; the amount, volume, and geographic extent of sales of goods or services offered under the mark; the extent of actual recognition of the mark; and whether the mark is registered — all weigh overwhelmingly in VHG's favor. Specifically:
• The VERIMARK marks have been in continuous use for over seventeen (17) years;
• VHG operates seventy-four (74) branded properties across eighteen (18) states and the Caribbean;
• VHG generated $1.87 billion in annual revenue in FY 2024;
• VHG spent approximately $142 million on marketing and brand promotion in FY 2024;
• The marks are federally registered, with two registrations achieving incontestable status; and
• The VERIMARK brand enjoys widespread consumer recognition throughout the United States.
CVR's use of "VERIMARK RESORTS" and "VR Verimark" is likely to cause dilution of the distinctive quality of VHG's famous marks in two ways. First, CVR's use is likely to cause dilution by blurring by creating an association between CVR's marks and VHG's famous marks that impairs the distinctiveness of VHG's marks. The near-identity of the marks, the similarity of the services, and the overlapping trade channels create precisely the type of association that dilution-by-blurring is designed to prevent. Second, to the extent that CVR's properties or services are of lower quality than those associated with VHG's brand, or to the extent that consumers form negative impressions of CVR's properties and associate them with VHG, CVR's use is likely to cause dilution by tarnishment of VHG's famous marks.
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 reasons:
First, "VERIMARK" is not a dictionary word, a commonly used English-language term, or a recognized phrase in the hospitality industry or any other industry. It is a coined, arbitrary term that was created by VHG. The word "Verimark" does not appear in any standard English-language dictionary, including Westvale Industries, Oxford, or any specialized hospitality or travel industry glossary. It has no recognized meaning independent of its association with VHG's brand.
Second, VHG's federal trademark registrations, including the incontestable registration of the VERIMARK word mark (U.S. Reg. No. 3,742,618), constitute conclusive evidence under 15 U.S.C. § 1065 and § 1115(b) that the mark is not generic and is, at a minimum, descriptive with acquired distinctiveness (secondary meaning). Incontestability eliminates descriptiveness as a defense, except in the narrow circumstances enumerated in the statute — none of which apply here. See Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 196 (1985) (holding that an incontestable mark cannot be challenged on the ground of descriptiveness). CVR's bald assertion that "Verimark" is descriptive is foreclosed by the incontestable status of VHG's registration.
Third, no evidence exists — in trade publications, industry journals, dictionaries, websites, or any other source — that the term "Verimark" is or has ever been used as a generic or descriptive term for hospitality services, accommodation services, quality certification, or any related concept. CVR did not cite, and cannot cite, a single instance of such usage in its June 7, 2024 response. The complete absence of any third-party descriptive or generic use of "Verimark" in the hospitality industry confirms that the term is not descriptive or generic.
Fourth, the fact that CVR may attempt to parse "Verimark" into the syllables "veri" (suggesting "verified") and "mark" (suggesting "mark of quality") does not render the term descriptive or generic. Courts routinely protect coined portmanteau marks that combine common morphemes into a novel, distinctive whole. See, e.g., In re Clorox Co., 578 F.2d 305, 308 (C.C.P.A. 1978); Fancaster, Inc. v. Granite Harbor Partners LLC, 832 F. Supp. 2d 380, 399–400 (D.N.J. 2011). The relevant inquiry is the meaning and commercial impression of the mark as a whole — not whether its component parts, viewed in isolation, might suggest some descriptive connotation. "VERIMARK," taken as a whole, is an arbitrary, coined term with no descriptive significance in relation to hotel and resort services.
Fifth, CVR bears a heavy burden to overcome the presumption of validity that attaches to VHG's federal registrations under 15 U.S.C. § 1057(b). This presumption can only be overcome by clear and convincing evidence. CVR's unsupported, conclusory assertion that "Verimark" is descriptive or generic falls far short of satisfying this burden. CVR has produced no evidence — no survey data, no expert testimony, no third-party usage evidence, no dictionary definitions, no trade publication references — to support its position. The argument is without merit and should be abandoned.
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 resort properties but mistakenly contacted VHG, believing CVR's properties to be VHG properties or affiliated with VHG. Conversely, VHG is aware that consumers intending to book at VHG properties have contacted CVR instead, resulting in lost bookings and revenue for VHG. These misdirected inquiries are occurring through multiple channels, including telephone reservations, email inquiries, and online booking forms.
• Social Media Misattributions. VHG has identified social media posts across multiple platforms in which consumers have confused the two entities, tagging VHG's social media accounts in posts that reference experiences at CVR properties, and vice versa. These misattributions are eroding the clarity of VHG's brand identity in the digital marketplace and associating VHG's brand with properties and services that are not under VHG's control.
• Misdirected Online Reviews. VHG has documented online reviews posted on VHG property listing pages on major travel and review platforms that describe experiences at CVR resort properties. These reviews, which are associated with VHG's properties in the eyes of prospective guests, may contain content — positive or negative — that does not accurately reflect the VHG guest experience, thereby distorting VHG's brand reputation and misleading consumers.
Representative samples of this documented consumer confusion evidence are enclosed with this letter. This evidence demonstrates conclusively that consumer confusion is not a hypothetical possibility but an ongoing, escalating reality. The confusion is a direct and proximate result of CVR's adoption and use of marks that are confusingly similar to VHG's long-established VERIMARK marks.
The harm to VHG is compounded by the geographic proximity of the parties' operations. CVR's Fort Lauderdale resort is located approximately four (4) miles from VHG's Verimark Oceanview property — a distance so short that the two properties are competing for many of the same guests in the same local market. This direct geographic overlap dramatically intensifies the likelihood and severity of consumer confusion.
VHG's brand goodwill, painstakingly built over more than seventeen years at a cumulative cost of hundreds of millions of dollars, is being actively and materially harmed by CVR's unauthorized use of the VERIMARK marks. Every day that CVR continues its infringing conduct, the damage deepens — and with it, VHG's entitlement to the full measure of remedies available under the law.
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, without limitation, all use on or in connection with signage (both physical and digital), advertising (including online, print, broadcast, and out-of-home), marketing materials, business cards, stationery, letterhead, promotional items, packaging, uniforms, merchandise, websites, mobile applications, and all social media platforms.
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 confirmation that the domain has been permanently deleted and shall not re-register the domain or any confusingly similar domain in the future.
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 Services Inc., X (formerly Fenmore Solutions), Westmark Health IT, Dunmore & Co., Crowne Albany Partners LLC, Pinterest, and Threads.
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 property (1025 Emerald Coast Parkway). CVR shall remove or replace all physical signage, printed materials, digital content, and other branded elements bearing the infringing marks at each such property within the thirty-day compliance period.
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 Group Inc., at 2200 Bayshore Boulevard, Suite 1400, Tampa, Florida 33629.
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 not limited to the following:
• Federal Litigation. VHG will file a civil action against CVR in the United States District Court for the Southern District of Florida, asserting claims for federal trademark infringement under 15 U.S.C. § 1114(1), false designation of origin and unfair competition under 15 U.S.C. § 1125(a), and trademark dilution under 15 U.S.C. § 1125(c). VHG will seek all available relief, including: (a) preliminary and permanent injunctive relief enjoining CVR from any further use of the infringing marks; (b) actual damages sustained by VHG as a result of CVR's infringement; (c) disgorgement of CVR's profits attributable to the infringing use; (d) enhanced and/or treble damages under 15 U.S.C. § 1117(a); and (e) attorneys' fees and costs on the ground that this case qualifies as an "exceptional case" under 15 U.S.C. § 1117(a), particularly in light of CVR's continued infringement after receiving two separate cease-and-desist demands.
• TTAB Opposition Proceeding. VHG will file a Notice of Opposition before the Trademark Trial and Appeal Board to oppose CVR's pending application, Serial No. 98/432,117, for "VERIMARK RESORTS" in International Class 043, on all available grounds, including likelihood of confusion, priority of use, and dilution.
• Cancellation of State and Common Law Rights. VHG will seek cancellation or invalidation of any state trademark registrations, assumed name registrations, fictitious name registrations, or common law trademark rights that CVR may claim in any mark incorporating "VERIMARK."
• State Law Claims. VHG will pursue claims under the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.204, and any other applicable state unfair competition, consumer protection, or trademark statutes.
• All Other Remedies. VHG will pursue any and all other remedies available at law or in equity, including but not limited to claims for unjust enrichment, conversion, and tortious interference with business relationships.
VHG is confident in the strength of its trademark rights and in the merits of its claims. VHG will not hesitate to pursue the full measure of its legal remedies if CVR does not promptly comply with the demands set forth in this letter.
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 waiver, relinquishment, or limitation of any right, claim, remedy, or defense of VHG, nor as an admission of any fact, legal conclusion, or characterization.
VHG specifically reserves the right to seek damages for all periods of CVR's infringement, including the entire period predating this letter and dating back to CVR's first use of the infringing marks on or about March 1, 2024. VHG further reserves the right to present this letter, VHG's prior cease-and-desist letter dated May 14, 2024, CVR's failure to comply with either demand, and CVR's continued use of the infringing marks after receipt of both letters, as evidence of willful infringement in any subsequent legal proceeding. As you are aware, a finding of willful infringement may support an award of enhanced damages, disgorgement of profits, and attorneys' fees under the Lanham Act.
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 any indication that VHG will delay enforcement action if compliance is not forthcoming.
VHG respectfully requests a written response to this letter within fourteen (14) calendar days of your receipt of this letter — that is, no later than August 26, 2024. In your response, please confirm whether CVR will comply with the demands set forth herein, and if so, provide a detailed timeline and plan for compliance with each demand.
Please direct all communications regarding this matter to the undersigned at the address, telephone number, and email address set forth below, with a copy to Sonia M. Trevino, Executive Vice President and General Counsel, Verimark Hospitality Group Inc., 2200 Bayshore Boulevard, Suite 1400, Tampa, Florida 33629.
VHG trusts that CVR will give this matter the prompt and serious attention it warrants.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner, intellectual Property Practice Group 400 Brickell Avenue, Suite 3200 Miami, Florida 33131 Direct Dial: (305) 814-6200 Direct Fax: (305) 814-6201
Email: mdelgado@calderwoodharkness.com
cc:
Sonia M. Trevino, Executive Vice President and General Counsel, Verimark Hospitality Group Inc., 2200 Bayshore Boulevard, Suite 1400, Tampa, FL 33629
Leonard Yee, Vice President of Brand Protection, Verimark Hospitality Group Inc., 2200 Bayshore Boulevard, Suite 1400, Tampa, FL 33629
Rafael J. Medina, Managing Member, Coral Verimark Resorts LLC, 6810 Ocean Drive, Unit 3, Fort Lauderdale, FL 33308
Enclosures:
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

CALDERWOOD & HARKNESS LLP

CALDERWOOD & HARKNESS LLP

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