PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT DO NOT DISSEMINATE WITHOUT PRIOR AUTHORIZATION
CALDERWOOD & HARKNESS LLP INTERNAL LITIGATION STRATEGY MEMORANDUM
TO: Marcus Delgado, Responsible Partner; Catherine Bloom, Billing Partner
FROM: Peter Vassiliev, Lead Associate; Wendy Schultz, Associate
DATE: July 18, 2025
RE: Litigation Strategy — Verimark Hospitality Group Inc. v. Coral Verimark Resorts LLC
MATTER NO.: 1021-00004
CLIENT: Verimark Hospitality Group Inc. ("VHG")
ADVERSE PARTY: Coral Verimark Resorts LLC ("CVR")
COURT: United States District Court for the Southern District of Florida (Miami Division)
ANTICIPATED CASE NO.: 1:25-cv-22847-AMC (to be assigned upon filing)
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I. Executive Summary
This memorandum constitutes a comprehensive pre-filing strategy analysis prepared in advance of the anticipated July 22, 2025 filing of a Verified Complaint and concurrent Motion for Preliminary Injunction against Coral Verimark Resorts LLC ("CVR") on behalf of our client, Verimark Hospitality Group Inc. ("VHG"). The memorandum addresses the factual background, the strength of VHG's claims, an assessment of CVR's likely defenses, the preliminary injunction strategy, the damages framework, coordination with the pending Trademark Trial and Appeal Board ("TTAB") opposition proceeding, settlement posture, risk assessment, recommended next steps, and budget considerations.
VHG is a publicly traded hospitality company listed on the Nasdaq Stock Market under the ticker symbol VMHG. VHG is headquartered at 2200 Bayshore Boulevard, Suite 1400, Tampa, Florida 33629. In fiscal year 2024, VHG generated revenue of approximately $1.87 billion and operated a portfolio of 74 branded resort and hotel properties spanning 18 states and the Caribbean. VHG has established itself as a premier provider of luxury and upscale hospitality services under the VERIMARK family of marks over a period exceeding seventeen years, beginning with its first use in commerce on September 3, 2007.
CVR is a Florida limited liability company formed on January 8, 2024. CVR is managed by its founder and Managing Member, Rafael J. Medina, and Co-Member and Operations Director, Gabriela N. Serrano. CVR currently operates two boutique luxury coastal resorts under the marks "VERIMARK RESORTS" and "VR Verimark," generating an estimated $4.3 million in partial-year (approximately 9.5 months of operations) revenue for calendar year 2024. A third CVR property is currently under development in Destin, Florida.
VHG holds three federal trademark registrations incorporating the term "VERIMARK," the earliest of which issued on March 17, 2009, with a first use in commerce date of September 3, 2007—more than sixteen and one-half years before CVR's first use in commerce in approximately March 2024. All three registrations are live and in good standing. The 2009 registration for the word mark "VERIMARK" is presumptively incontestable, having been registered for over sixteen years and the required Section 15 affidavit having been timely filed.
VHG undertook extensive pre-suit efforts to resolve this matter without litigation. VHG's General Counsel, Sonia M. Trevino, issued a detailed cease-and-desist letter to CVR on May 14, 2024. After CVR, through its counsel Natasha K. Okonkwo of Alcántara Reeves LLP, denied infringement and declined to cease use, this firm issued a second, more detailed cease-and-desist letter on August 12, 2024, from Marcus Delgado. CVR's counsel again rejected VHG's demands on September 5, 2024. No further settlement discussions have occurred since that date.
In parallel, VHG retained Broadleaf Investigations Inc. to conduct marketplace evidence gathering. Broadleaf, through its lead investigator Jorge A. Quintana, has documented 23 separate instances of actual consumer confusion between March 2024 and June 2025. This evidence is unusually strong for a trademark infringement case and provides compelling support for both the merits and the preliminary injunction motion.
Based on our thorough analysis, we recommend the following course of action:
(a) Filing of a five-count Verified Complaint asserting claims for (1) federal trademark infringement under 15 U.S.C. § 1114(1), (2) federal unfair competition and false designation of origin under 15 U.S.C. § 1125(a), (3) federal trademark dilution under 15 U.S.C. § 1125(c), (4) Florida common law trademark infringement, and (5) violation of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.204;
(b) Simultaneously moving for a preliminary injunction to enjoin CVR from further use of the VERIMARK marks pending resolution of the litigation;
(c) Coordinating with the pending TTAB opposition (No. 91/287,456) to ensure that VHG's enforcement strategy is consistent across both proceedings and that issue preclusion is maximized; and
(d) Establishing a settlement framework as a fallback strategy, to be deployed from a position of strength following the anticipated preliminary injunction ruling.
Our overall assessment is that VHG has a strong case on the merits and that injunctive relief is highly likely to be granted. CVR's anticipated defenses—principally descriptiveness, laches, and good faith adoption—are weak and should be addressed preemptively through the evidentiary record we intend to assemble. The following sections of this memorandum provide the detailed analysis supporting these conclusions.
II. Factual Background
A. VHG's Trademark Portfolio and Brand History
VHG first adopted and used the "VERIMARK" mark in connection with hospitality services on September 3, 2007, when it opened its inaugural branded property in Tampa, Florida. Since that date, VHG has continuously and exclusively used the VERIMARK family of marks in interstate commerce in connection with hotel, resort, and hospitality services.
VHG's federal trademark portfolio includes three key registrations, all issued by the United States Patent and Trademark Office and all classified under International Class 043 (hotel and resort services):
1. U.S. Registration No. 3,742,618 — "VERIMARK" (standard character / word mark), registered on March 17, 2009. This registration is based on a first use in commerce date of September 3, 2007. Having been registered for over sixteen years, and VHG having timely filed the required Declaration of Incontestability under Section 15 of the Lanham Act (15 U.S.C. § 1065), this registration is presumptively incontestable. Incontestability provides conclusive evidence of VHG's exclusive right to use the mark in commerce on or in connection with the goods or services specified in the registration, subject only to the limited defenses enumerated in 15 U.S.C. § 1115(b).
2. U.S. Registration No. 4,105,233 — "VERIMARK HOSPITALITY" (standard character / word mark), registered on January 10, 2012. This registration is based on a first use in commerce date corresponding to VHG's adoption of the "VERIMARK HOSPITALITY" brand extension. This registration is live and in good standing, with all required maintenance filings current.
3. U.S. Registration No. 5,489,701 — VERIMARK "V" Design Mark (stylized mark featuring a distinctive serif "V" rendered in a navy-and-gold color scheme), registered on May 22, 2018. This registration covers the stylized design element that serves as VHG's primary visual brand identifier across its properties, marketing materials, and digital platforms.
All three registrations are live, maintained, and in full force and effect. VHG has consistently filed all required Sections 8 and 9 declarations and renewal applications to maintain these registrations.
VHG's commercial presence under the VERIMARK marks is substantial and well-documented. As of the date of this memorandum, VHG operates 74 branded resort and hotel properties located across 18 states—including Florida, South Carolina, Georgia, North Carolina, Virginia, California, Hawaii, New York, Massachusetts, and others—as well as properties in the Caribbean, including the U.S. Virgin Islands, Puerto Rico, and the Bahamas. VHG's properties range from large-scale full-service resorts to boutique luxury hotels, all operating under the VERIMARK brand umbrella.
In fiscal year 2024, VHG generated total revenue of approximately $1.87 billion. VHG's annual marketing and advertising expenditure for FY 2024 was approximately $142 million, representing approximately 7.59% of total revenue. This figure encompasses national and regional television advertising, digital marketing (including search engine marketing, programmatic display advertising, and social media campaigns), print advertising in major travel publications, sponsorship of travel and hospitality industry events, and direct-to-consumer marketing through VHG's loyalty program. The magnitude of this investment demonstrates the extensive promotion and advertising of the VERIMARK marks over a sustained period and supports the marks' recognition as strong, commercially prominent identifiers of VHG's services.
VHG's senior leadership team relevant to this matter includes Donald R. Hargrove, Chief Executive Officer; Sonia M. Trevino, Vice President and General Counsel; and Leonard Yee, Vice President of Brand Protection. Mr. Yee oversees VHG's trademark enforcement program and has been directly involved in the pre-suit efforts against CVR.
VHG maintains a robust digital presence under the VERIMARK marks. VHG operates the website www.verimark.com, which serves as the company's primary booking and informational portal, and maintains verified accounts under the handle @verimarkhospitality across all major social media platforms, including Northpoint Services Inc., Kestrel Services Inc., X (formerly Fenmore Solutions), Westmark Health IT, and Dunmore & Co.. VHG's Northpoint Services Inc. account, @verimarkhospitality, has over 1.2 million followers as of July 2025.
B. CVR's Formation and Infringing Conduct
Coral Verimark Resorts LLC was organized as a Florida limited liability company on January 8, 2024, with the Florida Division of Corporations. CVR's managing member and founder is Rafael J. Medina. The co-member and operations director is Gabriela N. Serrano. CVR's principal office is located at 6810 Ocean Drive, Unit 3, Fort Lauderdale, Florida 33308. CVR's registered agent for service of process is Suncoast Filing Services LLC, with a registered office at 100 S.E. 3rd Avenue, Suite 210, Fort Lauderdale, Florida 33301.
Promptly after its formation, CVR took a series of steps to establish an online presence under marks incorporating "VERIMARK":
• On January 12, 2024—just four days after CVR's formation—CVR registered the domain name www.verimarkresortsgroup.com through the domain registrar NetLedger Domains Inc.
• On January 20, 2024, CVR created the Northpoint Services Inc. account @verimarkresortsofficial.
• CVR's first use in commerce of the marks "VERIMARK RESORTS" and the "VR Verimark" logo occurred on or about March 1, 2024, in connection with the marketing and promotion of its first resort property.
CVR currently operates two boutique luxury coastal resort properties:
1. CVR Fort Lauderdale — Located at 6810 Ocean Drive, Fort Lauderdale, Florida. This property opened on March 15, 2024. Notably, this property is located approximately four miles from VHG's "Verimark Oceanview" resort property at 1740 N. Fort Lauderdale Beach Boulevard, Fort Lauderdale, Florida—one of VHG's flagship southeastern Florida locations.
2. CVR Harborline Enterprises Head — Located at 44 Lighthouse Road, Harborline Enterprises Head Island, South Carolina 29928. This property opened on June 1, 2024—approximately two weeks after CVR received VHG's first cease-and-desist letter.
Additionally, CVR has a third property under active development at 1025 Emerald Coast Parkway, Destin, Florida 32541. Public permitting records and marketing materials obtained by Broadleaf Investigations indicate that CVR intends to open this property under the "VERIMARK RESORTS" brand. The Destin location is within VHG's existing geographic footprint and would further expand the scope of consumer confusion.
CVR's "VR Verimark" logo is of particular concern from a brand confusion standpoint. The logo employs a serif typeface and a blue-and-gold color palette that closely mirrors the design elements of VHG's registered "V" Design Mark (U.S. Reg. No. 5,489,701), which uses a navy-and-gold color scheme and a serif typeface. The visual similarity between the two marks is striking and goes beyond mere coincidence in the selection of the VERIMARK word element.
On April 15, 2024, CVR filed United States 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. The application was examined and published for opposition on November 5, 2024. VHG timely filed its Notice of Opposition, and the application is currently suspended pending the outcome of the opposition proceeding and the anticipated district court action.
CVR's estimated revenue for calendar year 2024 (covering approximately 9.5 months of operations from mid-March through December) is $4.3 million. Industry analysts and CVR's own marketing materials project CY 2025 revenue of approximately $6.8 million, reflecting the maturation of the Fort Lauderdale and Harborline Enterprises Head properties and anticipated bookings at the planned Destin location.
C. Pre-Suit Cease-and-Desist History
VHG pursued a measured and escalating pre-suit enforcement strategy, consistent with industry best practices and the expectations of the Eleventh Circuit regarding diligent trademark enforcement:
First Cease-and-Desist Letter (May 14, 2024). VHG's Vice President and General Counsel, Sonia M. Trevino, sent a detailed cease-and-desist letter to CVR at its principal office address, identifying VHG's federal registrations, documenting VHG's priority of use, and demanding that CVR immediately cease all use of marks incorporating "VERIMARK," withdraw its pending trademark application, and transfer the domain www.verimarkresortsgroup.com to VHG. The letter provided a response deadline of 14 business days.
CVR's First Response (June 7, 2024). CVR, through its outside counsel Natasha K. Okonkwo of Alcántara Reeves LLP, responded to VHG's cease-and-desist letter. Ms. Okonkwo's response denied that CVR's use of "VERIMARK RESORTS" or "VR Verimark" constituted trademark infringement. CVR's primary argument was that "Verimark" is a descriptive or generic term purportedly meaning "verified mark of quality" in the hospitality industry, and that CVR therefore had the right to use the term in connection with its resort services. CVR declined to cease use or withdraw its trademark application.
Second Cease-and-Desist Letter (August 12, 2024). Following the retention of Calderwood & Harkness LLP as outside litigation counsel, Marcus Delgado sent a second, more detailed cease-and-desist letter to Ms. Okonkwo. This letter provided a comprehensive legal analysis of the Eleventh Circuit's likelihood-of-confusion factors, detailed marketplace evidence gathered to date, and attached copies of VHG's federal registration certificates. The letter reiterated VHG's demands and warned that failure to comply would result in the commencement of federal litigation and a motion for injunctive relief. The letter provided a 21-day response deadline.
CVR's Second Response (September 5, 2024). Ms. Okonkwo responded on behalf of CVR, largely reiterating the positions set forth in her June 7, 2024 letter. CVR again declined to cease use of the marks, maintained that "Verimark" is descriptive, and asserted that VHG's claims were without merit. CVR did not propose any settlement terms or alternative resolution.
No further settlement discussions or correspondence have occurred between the parties since CVR's September 5, 2024 response. Given the failure of the pre-suit enforcement process, VHG has authorized the commencement of litigation.
D. Evidence of Actual Consumer Confusion
At VHG's direction and with the assistance of this firm, VHG retained Broadleaf Investigations Inc. to conduct systematic marketplace evidence gathering regarding consumer confusion between the VERIMARK and VERIMARK RESORTS marks. Broadleaf's lead investigator, Jorge A. Quintana, oversaw the evidence-gathering effort, which was conducted on a flat-fee engagement at a cost of $18,500.
Broadleaf's investigation spanned the period from March 2024 (the date of CVR's first use in commerce) through June 2025, a period of approximately fifteen months. Over the course of this investigation, Broadleaf documented 23 discrete instances of actual consumer confusion between VHG's VERIMARK-branded properties and CVR's VERIMARK RESORTS properties. These instances fall into several categories:
• Misdirected Reservation Inquiries. Multiple consumers attempted to book reservations at CVR properties through VHG's reservation channels (telephone, website, and third-party online travel agency platforms), and conversely, consumers attempted to book VHG properties through CVR's channels. In several instances, consumers expressed confusion when informed that the property they were attempting to book was not affiliated with the brand they believed they were contacting.
• Social Media Misattributions. Consumers posted reviews, comments, and photographs of CVR properties while tagging VHG's official social media accounts (e.g., @verimarkhospitality on Northpoint Services Inc.), and vice versa. These posts demonstrate that consumers could not distinguish between the two brands in the digital marketplace.
• Cross-Posted Online Reviews. Consumer reviews describing guest experiences at CVR properties were posted on review pages and online travel agency listings for VHG properties. These misdirected reviews have the potential to harm VHG's reputation if the experiences described are inconsistent with VHG's service standards, and they deprive VHG of the ability to respond appropriately to guest feedback.
This body of evidence is unusually strong for a trademark infringement case. Actual confusion evidence is widely recognized by courts in the Eleventh Circuit and elsewhere as the "best evidence" of likelihood of confusion. See, e.g., Frehling Enters., Inc. v. Int'l Select Grp., Inc., 192 F.3d 1330, 1340 (11th Cir. 1999). The fact that VHG can present 23 documented instances at the outset of litigation—before any formal discovery—is a significant strategic advantage.
Mr. Quintana will authenticate this evidence through a sworn declaration to be filed in support of VHG's Motion for Preliminary Injunction. The declaration will attach documentary exhibits including screenshots of misdirected social media posts, email records of misdirected reservation inquiries, and copies of cross-posted reviews.
E. TTAB Proceeding
On December 3, 2024, VHG filed a Notice of Opposition with the Trademark Trial and Appeal Board, commencing TTAB Opposition No. 91/287,456. The opposition challenges CVR's pending U.S. Trademark Application Serial No. 98/432,117 for the mark "VERIMARK RESORTS" in International Class 043 on grounds of likelihood of confusion with VHG's three prior registrations and common law rights.
The TTAB proceeding was suspended by stipulation of the parties on February 18, 2025, pending the outcome of the anticipated district court action. This suspension is consistent with standard TTAB practice, which recognizes that a civil action in a federal district court involving the same marks and parties takes priority over a TTAB proceeding. The TTAB discovery period, which had been set to commence on March 1, 2025, is accordingly tolled during the suspension.
The coordination of the TTAB proceeding with the district court action is addressed in detail in Section VII of this memorandum.
III. Strength of VHG's Claims
This section analyzes the five claims we recommend asserting in the Verified Complaint and evaluates VHG's likelihood of prevailing on each.
A. Federal Trademark Infringement — 15 U.S.C. § 1114(1)
To prevail on a claim of federal trademark infringement under Section 32 of the Lanham Act, VHG must establish that (1) it owns valid, federally registered trademarks, and (2) CVR's use of marks that are the same or similar to VHG's registered marks is likely to cause confusion among consumers as to the source, sponsorship, or affiliation of CVR's services. See Lone Star Steaks & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 930 (4th Cir. 1995); Frehling Enters., 192 F.3d at 1335.
The first element is easily established. VHG owns three valid, federally registered trademarks incorporating "VERIMARK" in International Class 043, as detailed in Section II.A above. Federal registration constitutes prima facie evidence of the validity of the marks, VHG's ownership of the marks, and VHG's exclusive right to use the marks in commerce. 15 U.S.C. § 1115(a). The 2009 registration is incontestable, providing conclusive evidence of these facts.
The second element—likelihood of confusion—is analyzed under the Eleventh Circuit's seven-factor test. See Frehling Enters., 192 F.3d at 1335; Lone Star Steaks, 43 F.3d at 933. Each factor is addressed below.
1. Strength of VHG's Marks. The strength of a trademark is assessed along two dimensions: conceptual strength (the mark's inherent distinctiveness as a matter of trademark law) and commercial strength (the mark's recognition and prominence in the marketplace).
Conceptual Strength. "VERIMARK" is a coined, portmanteau term that does not appear in any standard English dictionary. As applied to hospitality services, the term is at minimum arbitrary—it bears no logical or descriptive relationship to hotel or resort services—and may properly be classified as fanciful, given that it is an invented word. Arbitrary and fanciful marks occupy the highest tier of the distinctiveness spectrum and are entitled to the broadest scope of protection. See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976).
CVR's assertion, set forth in its June 7, 2024 counsel letter, that "Verimark" is a descriptive or generic term meaning "verified mark of quality" in the hospitality industry is a transparent post-hoc construction. There is no evidence in the record—nor is there any evidence available in public sources—that "Verimark" has ever been used descriptively or generically by any third party in the hospitality industry or in any other industry. The term does not appear in hospitality industry glossaries, trade publications, or dictionaries. CVR's counsel has not cited any authority or evidence supporting this construction.
Even if "VERIMARK" were characterized as suggestive—which we dispute—it would still be inherently distinctive and entitled to strong protection without the need for secondary meaning evidence.
Commercial Strength. The commercial strength of VHG's VERIMARK marks is overwhelming. VHG has used the marks continuously for over seventeen years. VHG generates $1.87 billion in annual revenue under the VERIMARK brand, invests $142 million annually in marketing and advertising the marks, operates 74 branded properties across 18 states and the Caribbean, and is a publicly traded company on the Nasdaq Stock Market. These facts demonstrate that the VERIMARK mark enjoys broad consumer recognition and substantial goodwill.
The incontestability of the 2009 registration further reinforces the strength of the mark, as it forecloses challenges to the mark's validity on grounds of descriptiveness.
This factor weighs heavily in VHG's favor.
2. Similarity of the Marks. The similarity analysis considers the marks as a whole, taking into account their appearance (sight), pronunciation (sound), and connotation (meaning). See John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 975 (11th Cir. 1983).
CVR's primary mark, "VERIMARK RESORTS," incorporates VHG's registered "VERIMARK" mark in its entirety. The term "VERIMARK" is the dominant element of CVR's mark; the word "RESORTS" is merely descriptive of the type of services offered and would be discounted by consumers in distinguishing the source of the services. See Winn-Dixie Stores, Inc. v. Winn Dixie of Aiken, Inc., 254 F. Supp. 2d 1325, 1333 (S.D. Fla. 2003) (Discounting generic or descriptive terms appended to a dominant mark).
CVR's stylized "VR Verimark" logo presents an even more acute similarity concern. The logo employs a serif typeface and a blue-and-gold color palette that closely mirrors VHG's registered "V" Design Mark (U.S. Reg. No. 5,489,701), which features a distinctive serif "V" rendered in navy-and-gold. The visual similarity between these marks extends beyond the word element to encompass trade dress elements including typeface style, color scheme, and overall commercial impression.
Under the sight, sound, and meaning analysis, all three dimensions favor a finding of confusing similarity. The marks look alike, sound alike when spoken, and convey the same commercial impression—that the services are provided by or associated with the "VERIMARK" brand.
This factor weighs strongly in VHG's favor.
3. Similarity of Services. Both VHG and CVR operate in International Class 043—hotel and resort services. The services are not merely related; they are identical. Both parties provide luxury resort accommodations to consumers in the southeastern United States. The identity of the services is a significant factor supporting likelihood of confusion, as consumers encountering identical services offered under confusingly similar marks are highly likely to assume a common source or affiliation.
This factor weighs strongly in VHG's favor.
4. Similarity of Trade Channels and Geographic Markets. Both VHG and CVR target the same consumer demographic: leisure and luxury travelers seeking upscale resort accommodations. Both parties market their services through overlapping channels, including proprietary websites, Northpoint Services Inc. and other social media platforms, and online travel agency ("OTA") platforms such as Aldermere Technologies, Bramwell Holdings, and Kestrel Group.
The geographic overlap between the parties' operations is particularly striking. CVR's Fort Lauderdale resort property at 6810 Ocean Drive is located approximately four miles from VHG's Verimark Oceanview property at 1740 N. Fort Lauderdale Beach Boulevard. The two properties serve the same local market and compete directly for the same pool of consumers.
CVR's Harborline Enterprises Head property and its planned Destin property further overlap with VHG's geographic footprint. VHG operates properties in both South Carolina and the Florida panhandle region, making these markets part of VHG's established territory under the VERIMARK brand.
This factor weighs strongly in VHG's favor.
5. Intent of the Defendant. Evidence of the defendant's intent in adopting its mark is relevant to the likelihood-of-confusion analysis because a defendant who intentionally adopts a mark similar to a well-known mark is presumed to have intended to create confusion. See Frehling Enters., 192 F.3d at 1340.
Several facts support an inference that CVR intentionally adopted marks confusingly similar to VHG's VERIMARK marks with knowledge of VHG's prior rights:
• CVR formed its company and selected the "VERIMARK RESORTS" name less than seventeen years after VHG's first use of the VERIMARK mark and in the same industry in which VHG is one of the most prominent operators.
• CVR registered the domain www.verimarkresortsgroup.com—a clear derivative of VHG's www.verimark.com—just four days after its formation.
• CVR created the Northpoint Services Inc. handle @verimarkresortsofficial, which is confusingly similar to VHG's @verimarkhospitality.
• CVR located its first property approximately four miles from VHG's Verimark Oceanview property in Fort Lauderdale—a proximity that makes ignorance of VHG's presence implausible.
• CVR continued to use the infringing marks—and indeed expanded its operations by opening the Harborline Enterprises Head property and commencing development of the Destin property—after receiving two cease-and-desist letters putting CVR on actual notice of VHG's rights and objections.
This factor weighs strongly in VHG's favor.
6. Evidence of Actual Confusion. As detailed in Section II.D above, Broadleaf Investigations has documented 23 discrete instances of actual consumer confusion spanning the period from March 2024 to June 2025. This evidence encompasses multiple categories of confusion, including misdirected reservation inquiries, social media misattributions, and cross-posted online reviews.
Actual confusion evidence is the "best evidence" of likelihood of confusion and is entitled to substantial weight in the analysis. See Frehling Enters., 192 F.3d at 1340; Caliber Auto. Liquidators, Inc. v. Premier Chrysler, Jeep, Dodge, LLC, 605 F.3d 931, 939 (11th Cir. 2010). The number and range of documented instances here is unusual; in many trademark cases, plaintiffs are able to present only a handful of instances of actual confusion—or none at all—at the preliminary injunction stage. Twenty-three documented instances over a fifteen-month period is a powerful showing.
This factor weighs very strongly in VHG's favor.
7. Consumer Sophistication. CVR may argue that the relevant consumers—luxury resort travelers—exercise a high degree of care in making purchasing decisions, thereby reducing the likelihood of confusion. While it is true that consumers of high-end hospitality services generally exercise greater care than consumers of inexpensive, impulse-driven products, this consideration does not preclude a finding of likelihood of confusion.
First, the evidence of actual confusion directly refutes the premise that consumer sophistication eliminates confusion in this case. Even sophisticated consumers have been confused, as demonstrated by the misdirected reservation inquiries and social media misattributions documented by Broadleaf Investigations.
Second, the concept of initial interest confusion is particularly relevant in the online booking environment. Consumers searching for resort accommodations online often encounter marks in abbreviated form—in search engine results, OTA listings, social media feeds, and banner advertisements—before they have the opportunity to carefully evaluate the source of the services. The use of confusingly similar marks in this environment is sufficient to divert consumer attention and create actionable confusion, even if the confusion is ultimately resolved before a transaction is completed. See Austl. Gold, Inc. v. Hatfield, 436 F.3d 1228, 1239 (10th Cir. 2006).
This factor is neutral to slightly favorable to VHG.
Overall Assessment. All seven factors of the Eleventh Circuit's likelihood-of-confusion test favor VHG. The strength of VHG's marks, the near-identity of the marks and services, the overlapping trade channels and geographic markets, the evidence of CVR's intent, and the 23 documented instances of actual confusion collectively establish an overwhelming case for likelihood of confusion. We assess the probability of prevailing on this claim as very high.
B. Federal Unfair Competition / False Designation of Origin — 15 U.S.C. § 1125(a)
Section 43(a) of the Lanham Act provides a cause of action for unfair competition and false designation of origin, protecting both registered and unregistered marks against uses that are likely to cause confusion as to the source, sponsorship, or affiliation of goods or services. The same likelihood-of-confusion analysis applicable to the Section 32 claim applies here, and the analysis set forth in Section III.A above is incorporated by reference.
In addition to the likelihood-of-confusion theory, the Section 43(a) claim provides a basis for challenging CVR's conduct as creating a false impression of association, affiliation, or sponsorship with VHG. CVR's adoption of marks that incorporate VHG's distinctive VERIMARK mark in its entirety—combined with the similar trade dress elements in CVR's "VR Verimark" logo—conveys a false impression to consumers that CVR is associated with, endorsed by, or operates under the auspices of VHG.
VHG's common law rights in the VERIMARK mark, which date back to September 3, 2007, provide an independent basis for the Section 43(a) claim that does not depend on federal registration. This is relevant in the event that any of VHG's registrations are challenged on technical grounds, although we do not anticipate such challenges being successful.
We assess the probability of prevailing on this claim as very high.
C. Federal Trademark Dilution — 15 U.S.C. § 1125(c)
The Federal Trademark Dilution Revision Act of 2006 provides that the owner of a "famous mark" may obtain injunctive relief and, in cases of willful dilution, damages 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, regardless of the presence or absence of actual or likely confusion, competition, or actual economic injury. 15 U.S.C. § 1125(c)(1).
Fame of the VERIMARK Mark. The threshold requirement for a dilution claim is that the plaintiff's mark be "famous"—i.e., widely recognized by the general consuming public as a designation of source of the plaintiff's goods or services. See 15 U.S.C. § 1125(c)(2)(A). The statute identifies four non-exclusive factors for evaluating fame: (i) the duration, extent, and geographic reach of advertising and publicity of the mark; (ii) the amount, volume, and geographic extent of sales of goods or services offered under the mark; (iii) the extent of actual recognition of the mark; and (iv) whether the mark was registered.
VHG has strong arguments for fame based on each of these factors:
• Duration and extent of advertising: VHG has promoted the VERIMARK mark through a $142 million annual marketing budget over a period exceeding seventeen years, encompassing national and regional advertising, digital marketing, and sponsorships.
• Volume and geographic extent of sales: VHG generates $1.87 billion in annual revenue through 74 branded properties across 18 states and the Caribbean, demonstrating nationwide commercial presence.
• Actual recognition: VHG is a publicly traded company on the Nasdaq Stock Market (ticker: VMHG), which inherently generates broad investor and consumer awareness. The VERIMARK brand is widely recognized among both leisure travelers and the financial community.
• Registration: VHG holds three federal registrations incorporating VERIMARK, the oldest of which has been registered for over sixteen years.
We acknowledge that the "fame" threshold under the dilution statute is higher than the "strength" analysis under the likelihood-of-confusion test. However, VHG's $1.87 billion in annual revenue, $142 million in annual marketing spend, 74 branded properties, and public company status provide a compelling basis for establishing fame.
Dilution by Blurring. CVR's use of "VERIMARK RESORTS" as a brand name for resort services weakens the distinctive quality of the VERIMARK mark by creating an association between the famous mark and a mark that is not under VHG's control. This association impairs the VERIMARK mark's ability to serve as a unique identifier of VHG's services. The statutory factors relevant to blurring—including the degree of similarity between the marks, the degree of inherent or acquired distinctiveness of the famous mark, and the extent to which CVR intended to create an association with the famous mark—all favor VHG. See 15 U.S.C. § 1125(c)(2)(B).
Dilution by Tarnishment. If CVR's boutique resort properties provide a materially different or inferior guest experience relative to VHG's standards, the association between CVR's services and VHG's famous mark could tarnish VHG's brand reputation. While we do not yet have definitive evidence of tarnishment, this theory should be alleged in the Complaint and developed through discovery.
The dilution claim is particularly valuable because it does not require proof of likelihood of confusion, providing an independent basis for injunctive and monetary relief even in the unlikely event that VHG's confusion-based claims were to encounter difficulty. We assess the probability of prevailing on this claim as moderate to high, with the primary risk being the fame threshold.
D. Florida Common Law Trademark Infringement
VHG also asserts a claim for common law trademark infringement under Florida law, which provides protection to the first user of a mark in a given geographic market. VHG's first use of the VERIMARK mark in Florida dates to at least September 3, 2007—the date of VHG's first use in commerce—establishing clear priority over CVR, which did not commence use until approximately March 2024, more than sixteen years later.
The analysis under Florida common law mirrors the federal infringement analysis set forth in Section III.A above. Florida courts apply a multi-factor likelihood-of-confusion test that is substantively identical to the Eleventh Circuit's seven-factor test. VHG's superior common law rights in the state of Florida, combined with the overwhelming likelihood-of-confusion analysis, provide a strong basis for this claim.
The inclusion of a Florida common law claim ensures that VHG's rights are protected even in the absence of federal jurisdiction and provides an alternative basis for relief should any technical deficiency in the federal claims arise.
We assess the probability of prevailing on this claim as very high.
E. Florida Deceptive and Unfair Trade Practices Act — Fla. Stat. § 501.204
The Florida Deceptive and Unfair Trade Practices Act ("FDUTPA") prohibits "unfair or deceptive acts or practices in the conduct of any trade or commerce." Fla. Stat. § 501.204(1). CVR's use of marks confusingly similar to VHG's well-established VERIMARK marks in connection with identical services in the same geographic market constitutes an unfair and deceptive trade practice within the meaning of the statute.
The FDUTPA claim is strategically important because it provides remedies that supplement those available under the Lanham Act:
• Actual damages. FDUTPA permits recovery of actual damages suffered by VHG as a result of CVR's deceptive practices.
• Attorneys' fees. FDUTPA provides for the recovery of reasonable attorneys' fees to the prevailing party under Fla. Stat. § 501.2105, without requiring the heightened "exceptional case" showing mandated by Section 35 of the Lanham Act. This significantly broadens VHG's ability to recover the substantial legal costs it has incurred in enforcing its rights.
• Injunctive relief. FDUTPA authorizes the court to issue injunctive relief to prevent continuing violations of the statute.
We assess the probability of prevailing on this claim as high, given that the factual predicate is substantially the same as the federal infringement claim.
IV. Assessment of CVR's Likely Defenses
Based on the positions articulated in CVR's counsel's June 7, 2024 and September 5, 2024 response letters, as well as our analysis of the factual record and applicable law, we anticipate that CVR will raise the following defenses. Each is addressed below with our rebuttal strategy and risk assessment.
A. Descriptiveness / Genericness Defense
CVR asserted in its June 7, 2024 response that "Verimark" is a descriptive or generic term purportedly meaning "verified mark of quality" in the hospitality industry. This was the centerpiece of CVR's pre-suit defense and we expect it to be reasserted in CVR's responsive pleadings and opposition to the preliminary injunction motion.
Rebuttal. This defense is without merit for several independent reasons:
First, "Verimark" is a coined, portmanteau term. It does not appear in any standard English dictionary, industry glossary, trade publication, or other reference source. The claim that it constitutes a recognizable compound of "veri" (from "verified") and "mark" (as in "mark of quality") is a post-hoc rationalization constructed solely for the purpose of defending against VHG's infringement claims.
Second, there is no evidence whatsoever that "Verimark" is used descriptively or generically by any third party in the hospitality industry or in any other industry. A comprehensive search of USPTO records, industry databases, and internet sources reveals no third-party use of "Verimark" in any context, let alone in the hospitality context. This absence of third-party use is itself powerful evidence that the term is not descriptive or generic.
Third, VHG's 2009 registration (U.S. Reg. No. 3,742,618) is presumptively incontestable, having been registered for over sixteen years and the required Section 15 affidavit having been timely filed. Under 15 U.S.C. § 1115(b), incontestability constitutes conclusive evidence that the mark is not generic and forecloses the descriptiveness defense. See Park 'N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 196 (1985) (holding that an incontestable mark cannot be challenged on descriptiveness grounds).
Fourth, even if "VERIMARK" were characterized as suggestive rather than arbitrary—which we dispute—suggestive marks are inherently distinctive and entitled to trademark protection without any showing of secondary meaning. See Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 791 (5th Cir. 1983).
Fifth, to affirmatively rebut any descriptiveness argument that CVR may present, VHG has retained Dr. Irene Calder of Pinnacle Brand Analytics LLC to design and conduct a Teflon-format consumer survey. This survey will measure whether consumers perceive "VERIMARK" as a brand name (trademark) or a common/descriptive term. Based on our preliminary discussions with Dr. Calder, the survey methodology is well-established and the results are expected to confirm that consumers overwhelmingly perceive "VERIMARK" as a brand name.
Risk Level: Low. This defense is unlikely to succeed and will be effectively rebutted by the combination of the incontestability doctrine, the absence of third-party use, and the Pinnacle consumer survey.
B. Laches / Acquiescence
CVR may argue that VHG unreasonably delayed in bringing suit, given that VHG became aware of CVR's use by at least May 2024 (the date of the first cease-and-desist letter) and did not file the Complaint until July 2025—an interval of approximately fourteen months.
Rebuttal. The laches defense requires a showing that the plaintiff unreasonably and inexcusably delayed in asserting its rights, and that the defendant suffered prejudice as a result of the delay. See Kason Indus., Inc. v. Component Hardware Grp., Inc., 120 F.3d 1199, 1203 (11th Cir. 1997). Neither element is satisfied here.
First, the approximately fourteen-month interval between the first cease-and-desist letter (May 14, 2024) and the anticipated filing date (July 22, 2025) is not unreasonable in context. During this period, VHG engaged in a diligent and escalating enforcement process: (a) VHG's in-house counsel issued the first cease-and-desist letter in May 2024; (b) CVR responded in June 2024 denying infringement; (c) VHG retained outside counsel and issued a second, more detailed cease-and-desist letter in August 2024; (d) CVR again denied infringement in September 2024; (e) VHG filed a Notice of Opposition with the TTAB in December 2024; and (f) VHG retained Broadleaf Investigations to conduct a comprehensive marketplace confusion study spanning through June 2025. This timeline reflects prudent and responsible pre-suit enforcement, not unreasonable delay.
Second, CVR cannot credibly claim prejudice. CVR adopted the infringing marks with knowledge of VHG's prior rights—or, at minimum, with constructive notice through VHG's federal registrations—and continued to expand its operations after receiving two cease-and-desist letters. Any prejudice CVR has suffered from its investment in the VERIMARK RESORTS brand is entirely self-inflicted. CVR opened its Harborline Enterprises Head property in June 2024—after receiving the first cease-and-desist letter—and commenced development of the Destin property thereafter. CVR cannot claim that it was lulled into a false sense of security by VHG's alleged inaction.
Third, laches is generally disfavored when the infringement is ongoing and the defendant adopted the mark after actual notice of the plaintiff's prior rights. See Kason Indus., 120 F.3d at 1204. Here, CVR's infringement is ongoing and expanding.
Fourth, and critically, laches does not bar injunctive relief for ongoing infringement in the Eleventh Circuit; at most, laches would limit the availability of retrospective damages for the period of delay. See id. VHG's primary objective—cessation of CVR's infringing use—is therefore not threatened by a laches defense.
As to acquiescence, this defense requires a showing that VHG affirmatively communicated consent to CVR's use of the marks, either expressly or through conduct that would estop VHG from asserting its rights. The factual record demonstrates precisely the opposite: VHG issued two cease-and-desist letters and filed a TTAB opposition, all of which communicated VHG's unequivocal objection to CVR's use of the marks. Acquiescence is not a viable defense.
Risk Level: Low to moderate. CVR will likely raise this defense, but it is unlikely to defeat VHG's claims. At most, a laches finding could limit VHG's retrospective damages recovery for a narrow window, which can be addressed through our damages analysis.
C. Fair Use / Descriptive Fair Use
CVR might argue that it is using "Verimark" in a descriptive sense—i.e., to convey the meaning "verified mark of quality"—rather than as a trademark.
Rebuttal. The descriptive fair use defense requires that the defendant's use be (1) in a descriptive sense, (2) in good faith, and (3) not as a trademark. See KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004). CVR's use fails all three prongs.
CVR uses "VERIMARK RESORTS" as the brand name of its resort properties—it is the primary source identifier displayed on its signage, website, domain name, social media accounts, marketing materials, and reservation systems. CVR's filing of a trademark application for "VERIMARK RESORTS" (Serial No. 98/432,117) is a conclusive admission that CVR intends to use the term as a trademark, not descriptively. A party cannot simultaneously seek to register a term as a trademark and claim that it is using the term descriptively.
Risk Level: Very low. This defense is a non-starter given CVR's trademark application.
D. Independent Creation / Good Faith Adoption
CVR may claim that it independently coined "Verimark" without knowledge of VHG's marks and adopted the mark in good faith.
Rebuttal. This defense fails on multiple grounds.
First, VHG's federal registrations provide constructive notice to the entire world of VHG's claim of ownership of the VERIMARK marks. 15 U.S.C. § 1072. CVR cannot claim ignorance of VHG's rights in the face of constructive notice.
Second, actual knowledge is highly probable given the circumstances. VHG is a publicly traded company on the Nasdaq Stock Market with $1.87 billion in annual revenue, 74 branded properties, and $142 million in annual marketing spend. VHG is one of the most prominent hospitality companies in the southeastern United States. CVR's Fort Lauderdale property is located approximately four miles from VHG's Verimark Oceanview property. The suggestion that CVR's principals—who formed a company in the hospitality industry in the same geographic market as VHG—were unaware of VHG's existence and brand is not credible.
Third, even if CVR could establish innocent adoption (which it cannot), any claim of good faith was extinguished when CVR received VHG's first cease-and-desist letter on May 14, 2024 and chose to continue—and expand—its use of the infringing marks.
Risk Level: Low. This defense is unlikely to succeed.
E. CVR's Limited Resources as a Practical Consideration
While not a legal defense per se, CVR's limited financial resources present practical considerations that should inform our litigation strategy.
CVR is a small company in its early stages of operation. Its estimated revenue was $4.3 million in its first partial year of operations (CY 2024), and it operates only two properties with a third under development. Its two identified principals, Rafael J. Medina and Gabriela N. Serrano, may have limited personal assets available to satisfy a judgment.
The practical implications of CVR's limited resources include:
• CVR may seek to limit discovery, resist compliance with injunctive relief, or claim inability to pay damages.
• There is a risk that CVR could become judgment-proof if it ceases operations, dissipates assets, or transfers property to related entities to avoid collection.
• CVR's limited resources may, however, increase the likelihood of settlement, as CVR may not have the financial capacity to sustain prolonged litigation against VHG.
Recommendation. In light of these practical concerns, we recommend that VHG's preliminary injunction motion include a request for asset preservation provisions requiring CVR to maintain an accounting of revenues derived from the use of the infringing marks. If appropriate, VHG may also seek an order requiring CVR to preserve assets sufficient to satisfy a potential damages award. These measures will help protect VHG's ability to collect any monetary relief awarded.
V. Preliminary Injunction Strategy
A. Legal Standard
To obtain a preliminary injunction in the Eleventh Circuit, the movant must establish four elements: (1) a substantial likelihood of success on the merits; (2) irreparable harm absent injunctive relief; (3) that the balance of equities favors the movant; and (4) that the preliminary injunction would serve the public interest. See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008); Schiavo ex rel. Schindler v. Schiavo, 403 F.3d 1223, 1225–26 (11th Cir. 2005). Each element is addressed below with specific reference to the facts of this case.
B. Substantial Likelihood of Success on the Merits
VHG easily satisfies this prong. As demonstrated in the comprehensive analysis set forth in Section III above, VHG has an overwhelming case for likelihood of confusion under the Eleventh Circuit's seven-factor test. The key factors supporting a substantial likelihood of success include:
• VHG owns three valid federal registrations, including an incontestable registration, covering the identical services at issue.
• CVR's marks incorporate VHG's registered mark in its entirety as the dominant element.
• The parties operate in identical service classifications and overlapping geographic markets, with properties located approximately four miles apart in Fort Lauderdale.
• VHG has documented 23 instances of actual consumer confusion—the strongest possible evidence of likelihood of confusion.
• CVR continued to use and expand its use of the marks after receiving two cease-and-desist letters, supporting an inference of bad faith intent.
The presumption of validity afforded by federal registration, combined with the incontestability of the 2009 mark, substantially reduces CVR's ability to challenge the merits through its anticipated descriptiveness defense. We expect the Court to find this prong satisfied without difficulty.
C. Irreparable Harm
Under the Trademark Modernization Act of 2020, which amended 15 U.S.C. § 1116(a), a plaintiff who demonstrates a likelihood of success on the merits of a trademark infringement claim is entitled to a rebuttable presumption of irreparable harm. This statutory presumption significantly eases VHG's burden on this prong.
Beyond the statutory presumption, VHG can demonstrate irreparable harm through several independent bases:
• Loss of control over brand identity and goodwill. VHG has invested over seventeen years and billions of dollars in revenue in building the VERIMARK brand. CVR's unauthorized use of confusingly similar marks deprives VHG of control over the quality and consistency of the consumer experience associated with the VERIMARK brand. This loss of control over brand identity is a classic form of irreparable harm in trademark cases that cannot be adequately compensated by monetary damages. See Levi Strauss & Co. v. Sunrise Int'l Trading Inc., 51 F.3d 982, 986 (11th Cir. 1995).
• Documented consumer confusion undermining brand integrity. The 23 instances of actual consumer confusion documented by Broadleaf Investigations demonstrate that VHG's brand integrity is being actively eroded. Each instance of confusion—whether a misdirected reservation, a misattributed social media post, or a cross-posted review—damages VHG's ability to deliver a consistent, reliable brand experience to its consumers. This ongoing erosion of goodwill is difficult to quantify and cannot be remedied through a retrospective damages award.
• CVR's expansion compounds the harm. CVR is actively developing a third property in Destin, Florida, under the VERIMARK RESORTS brand. If CVR is not enjoined, the scope of consumer confusion will expand to an additional market, multiplying the harm to VHG's brand. The ongoing and expanding nature of CVR's infringement underscores the urgency of injunctive relief.
• Harm is difficult to quantify. The damage to a well-established brand's reputation and consumer goodwill from ongoing infringement is inherently difficult to measure in monetary terms. Courts have consistently recognized that this type of harm is "irreparable" precisely because it defies accurate quantification. See BellSouth Corp. v. DataNational Corp., 60 F.3d 1565, 1569 (Fed. Cir. 1995).
We anticipate that CVR may argue that the passage of time since VHG first became aware of CVR's use (May 2024) undermines the urgency of VHG's irreparable harm claim. However, the statutory presumption under § 1116(a) does not require a showing of urgency—it attaches upon a showing of likelihood of success on the merits. Moreover, VHG actively pursued its rights during the pre-suit period and did not acquiesce or sleep on its rights. The ongoing and expanding nature of CVR's infringement, combined with the documented instances of continuing confusion, firmly establish that VHG faces irreparable harm that will worsen absent injunctive relief.
D. Balance of Equities
The balance of equities overwhelmingly favors VHG. The equitable calculus weighs the relative hardships that the parties would suffer from the grant or denial of injunctive relief.
VHG has invested over seventeen years of continuous use, generated billions of dollars in revenue, and expended hundreds of millions of dollars in marketing and advertising to build the VERIMARK brand. VHG's interest in protecting this substantial investment—and the goodwill it represents—is paramount.