The US Court of Appeals for the Fourth Circuit vacated a district court’s decision finding no infringement that focused on only the geographic distance between the physical locations of the two users without considering the factors bearing on any likelihood of confusion. Westmont Living, Inc. v. Retirement Unlimited, Inc., et al., Case No. 23-2248 (4th Cir. Mar. 18, 2025) (Niemeyer, Benjamin, Berner, JJ.)
Westmont Living, a California corporation that operates several retirement communities and assisted living facilities on the West Coast, sued Retirement Unlimited, a Virginia corporation that operates retirement communities and assisted living facilities on the East Coast, for trademark infringement. Westmont, which operates and markets its facilities using the mark WESTMONT LIVING, alleged that Retirement opened a new facility using the name The Westmont at Short Pump for services identical to those provided by Westmont.
The district court entered summary judgment for Retirement. The district court acknowledged that many factors are potentially relevant to determining the likelihood of confusion, but it concluded that because the parties’ physical facilities were located “in entirely distinct geographic markets,” as a matter of law “consumer confusion [was] impossible.” The district court based its holding on the Second Circuit’s 1959 decision in Dawn Donut v. Hart’s Food Stores, which held that when parties use their marks in separate and distinct markets, there can be no likelihood of confusion. Westmont appealed.
The Fourth Circuit found that the district court failed to address the parties’ competitive marketing, the locations from which they solicit and draw their customers, the scope of their reputations, and any of the nine factors for determining likelihood of confusion in the Fourth Circuit under its 2021 decision in RXD Media v. IP Application Dev. The Court explained that while not every factor necessarily needs to be considered in the analysis, the district court erred by relying solely on the fact that the parties’ physical facilities were on opposite coasts, without considering the many other factors that might bear on whether Westmont had shown a likelihood of confusion.
The Fourth Circuit disagreed with the district court’s reliance on Dawn Donut, explaining that the case stands for a narrow principle that where businesses use the same mark in physically distinct geographical markets, and their marketing and advertising are confined to those markets, there won’t be a likelihood of confusion. Given increased potential customer mobility, the internet, and the reduced influence of local radio and newspaper advertising, it is far less likely today that two businesses would operate in such physically distinct geographical markets as when the Dawn Donut rule was promulgated. In this case, both parties advertised nationwide on the internet. The Court noted that it may be especially difficult for a casual consumer to distinguish between the two companies when engaging in online research about retirement living, and the physical distance of the parties’ facilities does not eliminate that risk. The Fourth Circuit concluded that the district court’s reliance on only the geographic distance between the physical facilities of the two companies was simply too narrow an approach and remanded for further proceedings to consider all relevant factors for determining likelihood of confusion.