Delta’s Claims Can Fly Against Bogus Marketers

     TAMPA, Fla. (CN) – Travel club marketers might be liable for using Delta’s trademark to promote worthless travel memberships without the airline’s authorization, a federal judge ruled.
     In a federal lawsuit this year, Delta Air Lines alleged that Florida-based telemarketers used its trademark to promote a “travel club” scheme, without the airline’s knowledge or consent. Consumers agreed to participate in high-pressure sales presentations after marketing letters bearing Delta’s trademark made them believe they qualified for free round-trip airline tickets, according to the complaint.
     The travel club defendants then sold participants travel memberships that offered no discounts and were virtually worthless due to many limitations and restrictions. Consumers were also asked to pay taxes and fees that exceeded the value of the “free” airline tickets, or to pay a nonexistent “port tax” to qualify for a cruise, Delta claimed.
     The network included: “travel fulfillment” companies that sold the memberships, “mailers” who sent out the bogus marketing materials, “schedulers” who screened callers for the sales presentations, “distributors” who held the sales presentations, and “award fulfillment” companies that answered calls from consumers who tried to claim the free tickets.
     Delta claimed that, by giving the impression that the airline endorsed their scheme, the defendants harmed its business reputation and caused consumer confusion.
     Millenium Travel and Promotions Inc., Vacation Tours USA, and Henry Armand, who acted as distributors in the alleged scheme, asked the court to dismiss all claims against them.
     U.S. District Judge Susan Bucklew upheld the trademark infringement and unfair competition claims, finding that the use of Delta’s mark in the letterhead of the marketing letter suggested the airline’s affiliation with or endorsement of the material.
     In advancing the trademark dilution claims, Bucklew noted that “a jury could conclude that defendants did not use plaintiff’s mark simply to identify that the recipient could receive free tickets on plaintiff’s airline; instead, a jury could find that defendants used plaintiff’s mark to induce recipients into believing that plaintiff was one of the entities involved in sending the fly letter and involved in the creation of the free ticket offer.”
     Even if consumers do receive the promised free airline tickets, the tickets are worthless, suggesting that Delta is part of a fraudulent scheme, according to the Sept. 2 ruling.
     Since Armand, who represented Millenium and Vacation Tours, personally participated in the marketing campaigns, Delta has sufficiently alleged that the three defendants intentionally induced the alleged infringement, the order states.
     Delta also showed that the Millenium defendants were involved in a scheme they ran via mail fraud and wire fraud, and established a pattern of racketeering activity, Bucklew found.
     Damages to the goodwill associated with Delta’s trademark due to its unauthorized use cannot be determined by using the traditional formula for unfair trade practice damages, the judge ruled in upholding one of Delta’s state-law claims.
     Delta however cannot pursue an unjust enrichment claim under Florida law, but it may seek to recover defendants’ profits under federal trademark infringement law, the order adds.
     Bucklew said Delta could amend its complaint by Sept. 9 to include punitive damages relating to the remaining claims.
     Attorneys for the parties did not respond to requests for comment.

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