Startup luxury brokerage Carolwood sued for trademark infringement

Soon after luxury residential brokerage Carolwood Estates officially debuted, the firm was sued for trademark infringement by another Los Angeles-based group named Carolwood Equities LLC, which also deals in real estate.

The trademark infringement suit of Carolwood Equities LLC, its sibling company Carolwood Capital Partners LLC vs. Carolwood Partners Inc. is making its way through U.S. District Court for the Central District of California, where a 13-page complaint was filed in December. In mid-April, a joint rule report for the case was filed. The document outlines schedules for upcoming hearings and a possible jury trial in 2024.

Plaintiff Carolwood Equities LLC, helmed by Andrew Shanfeld and Adam Rubin, says in the complaint that its business started in 2014 and has consistently used the name Carolwood. The firm’s attorneys at Novian & Novian claim that their clients’ use of the name Carolwood was prominently displayed in past advertisements and had been mentioned in news media stories.

Late last year, star broker Drew Fenton left the Hilton & Hyland agency in Beverly Hills to start his own agency. In November, Fenton, veteran brokerage executive Nick Segal and HIlton & Hyland alum Ed Leyson announced the name of their startup: Carolwood.

After the new Beverly Hills-based Carolwood made social media posts announcing the company name, some viewers made posts asking if it was Shanfeld’s and Rubin’s company, according to the complaint.

“At this point, it was obvious that marketplace participants in the real estate investment markets, even very savvy ones, could not tell the genuine services offered by plaintiffs,” the complaint alleges.

In a statement summarized in the joint rule filing, the defendant’s lawyers at the law firm Buchalter said the plaintiffs got it wrong. Fenton’s Carolwood offers different services, and its clients are more sophisticated, so there is no likelihood of confusion between the two companies.

According to its website, Shanfeld’s and Rubin’s company deals in private equity and real estate investments.

Doug Lipstone, a trademark attorney with the Los Angeles office of Weinberg Gonser Frost, said trademark infringement suits involving real estate companies are not uncommon. Lipstone is not involved in the Carolwood case.

“Trademark users have to accept more risk than they used to,” Lipstone said. “The internet made the world a smaller place, and trademark holders are much more apt to encounter companies, even relatively small ones, using similar names on the internet.”

If a company is ordered by a court to stop using its name, changing a business name can turn into an expensive proposition. “Changing a name can cost a lot of money as many things have to be changed, including marketing materials, signage and internet domain names,” Lipstone said.

The court has set a May 26 scheduling conference for the Carolwood case. In the complaint, the plaintiffs demand that defendants stop using the Carolwood name. They also request compensatory and punitive damages, as well as attorney fees.

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