On August 6, 2014, in La Quinta Worldwide LLC v. Q.R.T.M., S.A. DE C.V., the US Court of Appeals for the Ninth Circuit affirmed in part and vacated and remanded in part the district court's judgment and order finding a likelihood of confusion and granting a permanent injunction against the defendant, Quinta Real (No. 12-15985, (9th Cir. Aug. 6, 2014)). Notably, the Ninth Circuit held that the "use in commerce" element of Sections 32 and 43(a) of the Lanham Act was not a jurisdictional requirement. Also noteworthy is the court's consideration of the parties' activities outside the US (specifically, in Mexico) when assessing the balance of hardships for injunctive relief.

The plaintiff, La Quinta, has been operating hotels and motels in the US and Mexico since 1968. The defendant, Quinta Real, opened its first hotel in Mexico in 1986 and operates eight luxury hotels throughout Mexico. Quinta Real planned to develop a hotel in the US and entered into two separate letters of intent in 1994 and 2007 to build hotels in San Antonio, Texas and Tucson, Arizona, respectively. Neither letter of intent came to fruition, but Quinta Real still intends to enter the US market.

In 2009, La Quinta filed a complaint for trademark infringement in the US District Court for the District of Arizona. After a bench trial, the district court granted La Quinta a permanent injunction against Quinta Real, finding a likelihood of confusion. Quinta Real appealed and argued that:

The court disagreed with Quinta Real's argument that there was no subject-matter jurisdiction. The court distinguished between jurisdictional requirements and requirements to establish a cause of action and concluded that the "use in commerce" element of claims under Sections 32 and 43(3) are unconnected to the Lanham's jurisdictional grant in 15 U.S.C. § 1121(a). That section of the Lanham Act grants federal subject-matter jurisdiction without any reference to a "use in commerce" requirement. Therefore, the court had subject-matter jurisdiction, regardless of whether Quinta Real's letters of intent constituted a use in commerce.

The court also concluded the district court correctly found a likelihood of confusion exists because after applying the Sleekcraft likelihood of consumer confusion factors, none of the factors supported Quinta Real and only two factors appeared neutral.

However, the Ninth Circuit vacated the district court's permanent injunction order and remanded for further analysis because the district court did not consider all relevant factors in assessing the balance of hardships between the parties. Specifically, the Ninth Circuit was concerned that the district court did not address the fact that a permanent injunction in La Quinta's favor would bar Quinta Real from opening a hotel in the US while La Quinta could continue to engage in unrestrained competition with Quinta Real in Mexico. The Ninth Circuit expressed no opinion on whether the district court should grant a permanent injunction but noted that the parties' activities in Mexico may be a pertinent fact affecting the balance of the hardships.