G6 Hospitality Franchising LLC v. HI Hotel Group, LLC

171 F. Supp. 3d 340, 2016 WL 1109211, 2016 U.S. Dist. LEXIS 36827
CourtDistrict Court, M.D. Pennsylvania
DecidedMarch 22, 2016
DocketNo. 1:11-cv-02176
StatusPublished
Cited by4 cases

This text of 171 F. Supp. 3d 340 (G6 Hospitality Franchising LLC v. HI Hotel Group, LLC) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
G6 Hospitality Franchising LLC v. HI Hotel Group, LLC, 171 F. Supp. 3d 340, 2016 WL 1109211, 2016 U.S. Dist. LEXIS 36827 (M.D. Pa. 2016).

Opinion

MEMORANDUM

Kane, Judge

Before the Court is Plaintiffs’ petition for treble damages, attorney’s fees, costs, and prejudgment interest. (Doc. No. 224.) For the reasons that follow, Plaintiffs’ petition will be granted in part and denied in part.

I. BACKGROUND

On or about October 6, 2009, Defendant HI Hotel Group, LLC (“HI Hotel Group”) and its members, Navnitlal Zaver (“Za-ver”) and Shailesh Patel (“S. Patel”), entered into a Motel 6 franchising agreement with Accor Franchising North America, LLC concerning property located at 1450 Harrisburg Pike, Carlisle, Pennsylvania.1 (Doc. Nos. 61 ¶ 22; 215 at Stipulation 7; 224-2 at 5, 32, 36; 224-3 at 20.) By September 2011, Defendant HI Hotel Group had breached the franchising agreement by failing to pay the required monthly fees or maintain brand standards. (See Doc. No. 215 at Stipulations 6, 8-10.) In fact, around that time, the motel was rebranded as a Travel Inn and, from September 27, 2011, as a Red Roof Inn. (Id. at Stipulation 18.) As discussed in detail below, the Motel 6 name and marks nonetheless remained in use at the 1450 Harrisburg Pike location. (Id. at Stipulations 19, 20.)

The Motel 6 franchising agreement granted Defendant HI Hotel Group the right to use Motel 6 trademarks for the operation of the franchised motel. (Id. at Stipulation 14.) Plaintiff G6 Hospitality IP LLC is the owner of three valid and incontestable federal trademark registrations for the Model 6 marks with registration [344]*344numbers: 1,816,223, 2,264,831, and 3,660,-463 (“Motel 6 trademarks”). (Id. at Stipulations 15, 17.) By rebranding the motel as a Travel Inn on or around September 2011, Defendant HI Hotel Group lost its right to conduct business using the Motel 6 trademarks. (See id. at Stipulations 19, 20.) Nonetheless, Defendant HI Hotel Group continued to use the Motel 6 trademarks at the 1450 Harrisburg Pike location. (Id. at Stipulation 20.)

On or about September 28, 2011, Defendant HI Hotel Group sold the motel to Defendant 1450 Hospitality PA, LLC (“1450 Hospitality”). (Id. at Stipulation 22.) For months, Defendant 1450 Hospitality operated the property with the Motel 6 name and marks on “roadway signs, the building exterior, and guestroom materials.”2 (See id. at Stipulations 29, 31.) In fact, Defendant 1450 Hospitality used “Motel 6 forms for guests to sign at the registration desk” and issued Motel 6 receipts to guests after payment. (Id. at Stipulation 23.) Defendants 1450 Hospitality and its members, Priyesh Shah (“Shah”)' and In-drajit Patel (“I. Patel”), did not have the right to use the Motel 6 trademarks. (Id. at Stipulation 24.) On November 2, 2011, the Motel 6 franchising agreement was terminated. (Id. at Stipulation 28.)

On November 21, 2011, Plaintiffs G6 Hospitality Franchising LLC, G6 Hospitality IP LLC, G6 Hospitality LLC, and Motel 6 Operating L.P. (together “Plaintiffs”) filed the above-captioned action, alleging that Defendants HI Hotel Group and 1450 Hospitality, along with their respective members Zaver, S. Patel, Shah, and I. Patel, infringed Plaintiffs’ Motel 6 trademarks. (Doc. No. 1.) Plaintiffs also brought a breach of contract claim against Defendants HI Hotel Group, S. Patel, and Zaver. (Id.) Prior to trial, the parties stipulated that Defendants HI Hotel Group and 1450 Hospitality committed trademark infringement under the Lanham Act.3 The jury trial commenced on April 27, 2015 to determine the amount of damages, whether Defendants Zaver, S. Patel, Shah, and I. Patel were personally liable for the infringement, and whether the infringement was intentional.

On April 30, 2015, the jury found that Defendant HI Hotel Group’s infringement amounted to $81,000.00 in actual damages and that Defendant 1450 Hospitality’s infringement amounted to $125,000.00 in actual damages. (Doc. No. 219.) The jury also found that: (1) Defendant S. Patel was personally liable for HI Hotel Group and 1450 Hospitality’s infringement; (2) Defendant Zaver was personally liable for HI Hotel Group’s infringement; (3) Defendant I. Patel was personally liable for 1450 Hospitality’s infringement; and (4) Defendant Shah was personally liable for 1450 Hospitality’s infringement. (Id.) Defendants S. Patel, I. Patel, and Shah were also found by the jury to have infringed Motel 6’s trademarks “intentionally or willfully, knowing it was an infringement, or was willfully blind to the infringement.” (Id.) On May 18, 2015, the Court subsequently granted judgment as a matter of law against Defendants HI Hotel Group, S. Patel and Zaver as to Plaintiffs breach of contract claim. (Doc. No. 222.)

On May 19, 2015, Plaintiffs petitioned the Court to award Plaintiffs treble damages, attorney’s fees, costs, and prejudg[345]*345ment interest. (Doc. No. 224.) Plaintiffs contend that they are contractually entitled to reasonable attorney’s fees and costs under the Motel 6 franchising agreement as well as statutorily entitled to treble damages, reasonable attorney’s fees, costs, and prejudgment interest under Section 85 of the Lanham Act. (See id.) On June 2, 2015,- Defendants S. Patel, Shah, and I. Patel wrote this Court to oppose an award of treble damages and attorney’s fees. (See Doc. Nos. 227, 228.) The petition is now ripe for disposition.

II. DISCUSSION

Section 35 of the Lanham Act, codified at 15 U.S.C. § 1117, lists the several remedies available for trademark infringement by separating and categorizing “each type of monetary award.” Georgia-Pac. Consumer Prods. LP v. von Drehle Corp., 781 F.3d 710, 717 (4th Cir.2015) (citing 15 U.S.C. § 1117). Section 35 of the Lanham Act distinguishes, in particular, the monetary relief for “counterfeiting” from mere trademark infringement. State of Idaho Potato Comm’n v. G & T Terminal Packaging, Inc., 425 F.3d 708, 720 (9th Cir.2005). As the United States Court of Appeals for the Fourth Circuit summarized in Georgia-Pacific Consumer Products LP:

Section 1117(a), which applies generally to trademark infringement cases ... authorizes a plaintiff to recover (1) the defendant’s profits based simply on proof of the defendant’s sales; (2) the plaintiff’s damages; (3) court costs; and (4) in exceptional cases, attorneys fees ... Section 1117(b), on the other hand, mandates the award of treble profits or treble damages for a defendant’s “use of [a] counterfeit mark” if the infringement consists of (1) “intentionally using a mark or designation, knowing such mark or designation is a counterfeit mark,” or (2) “providing goods or services [using such mark], with the intent that the recipient of the goods or services would put the goods or services to use in committing the violation.”

781 F.3d at 717-18 (citing 15 U.S.C. § 1117).

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171 F. Supp. 3d 340, 2016 WL 1109211, 2016 U.S. Dist. LEXIS 36827, Counsel Stack Legal Research, https://law.counselstack.com/opinion/g6-hospitality-franchising-llc-v-hi-hotel-group-llc-pamd-2016.