Choice Hotels International, Inc. v. Key Hotels of Atmore II, LLC et al
ORDER & DEFAULT JUDGMENT, Plf's Motion for Default Judgment is GRANTED as set out. Permanent injunction issues as set out. Within 30 days of this Order, Dfts shall file with the Court & serve on counsel for Plf a written statement setting fort h the steps to comply w/this Order as set out. Clerk is DIRECTED to mail two copies of this Order to Dfts, by certified mail & by first class mail, as set out. Signed by Senior Judge Callie V. S. Granade on 11/9/2016. (copies mailed to Dfts via cert. mail & first class mail on 11/9/16) (tot) (Additional attachment(s) added on 11/9/2016: # 1 Cert. Mail Receipts) (tot).
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
KEY HOTELS OF ATMORE II,
LLC; ANAND PATEL; DIPAN
PATEL; and SARJU PATEL,
) CIVIL ACTION NO. 16-452-CG-B
ORDER and DEFAULT JUDGMENT
This matter is before the Court on a motion for default judgment and
accompanying memorandum in support filed by Choice Hotels International, Inc.
(“Plaintiff”) in this action against Key Hotels of Atmore II, LLC; Anand Patel; Dipan
Patel; and Sarju Patel (“Defendants”). (Doc. 18; Doc. 19). For the reasons set forth
below, the Court finds that Plaintiff’s motion is due to be GRANTED.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff is a Delaware corporation. (Doc. 1, ¶ 1). Its principal place of
business is in Maryland and is licensed to conduct business in Alabama. Id.
Plaintiff has been in the business of operating hotels and motels since the 1930s
and has become one of the largest and most successful lodging franchisors in the
world, which includes the QUALITY® family of marks.1 Id. at ¶¶ 13–17. The
Plaintiff is the registrant of United States Trademark Registration No. 0,886,881
for the mark QUALITY; No. 1,050,372 for the mark QUALITY for use in connection
with the provision of hotel, motel, and restaurant services; No. 1,183,294 for the
QUALITY® family of marks have become widely associated, in the minds of the
consuming and general public, with goods and services offered by Plaintiff. Id. at ¶
52. Plaintiff, its predecessors, and franchisees have worked to instill and use its
marks in association with the highest value of hotel and motel services. Id. at ¶ 48.
Defendants Anand Patel, Dipan Patel, and Sarju Patel are natural persons residing
within the Southern District of Alabama and are members of Key Hotels of Atmore
II, LLC. Id. at ¶¶ 3–5. Defendant Key Hotels of Atmore II, LLC is a limited
mark QUALITY INN for use in connection with the provision of hotel, motel, and
restaurant services; No. 1,534,820 for the mark QUALITY HOTEL for use in
connection with the provision of hotel and restaurant services; No. 1,769,488 for the
mark QUALITY RESORT for use in connection with the provision of hotel and
motel services; No. 2,729,999 for the mark Q QUALITY INN + design for use in
connection with the provision of hotel and motel services; No. 2,732,875 for the
mark Q QUALITY SUITES + design for use in connection with the provision of
hotel and motel services; No. 2,946,054 for the mark Q QUALITY + design for use in
connection with the provision of hotel and motel services, hotel and motel
reservation services for others, and online hotel and motel reservation services for
others; No. 3,053,888 for the mark QUALITY SUITES for use in connection with
the provision of hotel and motel services, hotel and motel reservation services for
others, and online hotel and motel reservation services for others; No. 3,448,436 for
the mark QUALITY INN & SUITES for use in connection with the provision of
hotel and motel services, hotel and motel reservation services for others, and online
hotel and motel reservation services for others; No. 3,448,437 for the mark Q
QUALITY INN & SUITES + design for use in connection with the provision of hotel
and motel services, hotel and motel reservation services for others, and online hotel
and motel reservation services for others; No. 3,435,885 for the mark Q QUALITY +
design for use in connection with the provision of hotel and motel services, hotel and
motel reservation services for others, and online hotel and motel reservation
services for others; No. 3,569,789 for the mark Q QUALITY HOTEL + design for use
in connection with the provision of hotel and motel services, hotel and motel
reservation services for others, and online hotel and motel reservation services for
others; and No. 3,837,912 for the mark Q (stylized) for use in connection with hotel
and motel services, hotel and motel reservation services for others, online hotel and
motel reservation services for others, and providing a complimentary breakfast to
hotel guests. (Doc. 1, ¶¶ 11–44; Doc. 1-2 to Doc. 1-14). Plaintiff contends that each
registration is incontestable under Section 15 of the Lanham Act, 15 U.S.C. § 1065.
See (Doc. 1).
liability company organized under the law of the State of Alabama regularly
engaging in the provision of hotel-motel services at 1610 South Main Street,
Atmore, Alabama 36502 (“the Motel”). Id. at ¶ 2.
On September 30, 2011, Plaintiff and Defendants entered into a Franchise
Agreement (“the Agreement”). (Doc. 1-15). The Agreement permitted Defendants
to operate a QUALITY INN® franchise at the Motel and licensed the QUALITY®
family of marks to Defendants for the duration of the Agreement. (Doc. 1, ¶¶ 53–
54). The Agreement required Defendants make monthly franchise fee payments
and pay service charges unto Plaintiff on an ongoing basis. Id. at ¶ 56. Defendants
failed to satisfy these two obligations at some point prior to June 27, 2013. Id.
Plaintiff notified Defendants of their breaches and provided an opportunity to cure.
Id. at ¶ 58. Defendants did not cure their breaches. On August 29, 2013, Plaintiff
notified Defendants that it was terminating the Agreement and that, per paragraph
11 of the Agreement, Defendants were no longer authorized to use the QUALITY®
family of marks. Id. at ¶¶ 55, 61. Defendants were to immediately discontinue use
of the QUALITY® family of marks in any manner and pay unto Plaintiff
$86,390.33. Id. at ¶¶ 63, 65. Plaintiff made Defendants aware that further use of
the QUALITY® family of marks by Defendants would constitute trademark
infringement. Id. at ¶ 64. In spite of the August termination letter, Defendants
continued to use the QUALITY® family of marks in, around, and in publicity for the
Motel. Id. at ¶¶ 67–68.
Plaintiff then filed an arbitration claim against Defendants. On May 7, 2016,
the American Arbitration Association issued Plaintiff an award totaling $95,870.73.
(Doc. 1, ¶¶ 70). Despite termination of the Agreement as of August 29, 2013 and
subsequent arbitration, Defendants continued to make unauthorized use of the
QUALITY® family of marks in, around, and in publicity with the Motel. Id. at
¶¶71–72. A site inspection on July 22, 2016 established that Defendants’
unauthorized use continued at least through that date. Id. at ¶73.
Plaintiff initiated this action on August 26, 2016. (Doc. 1). Plaintiff asserts
three Counts in its Complaint: (1) federal trademark infringement in violation of §
32(a) of the Lanham Act, 15 U.S.C. § 1114; (2) federal unfair competition in
violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); and (3) trademark
infringement/unfair competition in violation of Alabama common law. Plaintiff
served a copy of the Summons and Complaint on Sarju Patel on September 7, 2016
(Doc. 13); Anand Patel on September 11, 2016 (Doc. 14); Key Hotels of Atmore II,
LLC on September 11, 2016 (Doc. 15); and Dipan Patel on September 17, 2016 (Doc.
12). Defendants did not respond. The Clerk entered default on October 13, 2016.
In its Motion for Default Judgment, Plaintiff requests that Defendants be
permanently enjoined from further use of the QUALITY® family of marks and be
awarded statutory damages, which include profits realized by Defendants, damages
suffered by Plaintiff, costs, and attorneys’ fees. The Court will discuss each count
and remedy sought in turn after setting forth the standard for analyzing Plaintiff’s
“In this Circuit, ‘there is a strong policy of determining cases on their merits
and we therefore view defaults with disfavor.’” Virgin Records America, Inc. v.
Lacey, 510 F. Supp. 2d 588, 590 (S.D. Ala. 2007) (quoting In re Worldwide Web
Systems, Inc., 328 F.3d 1291, 1295 (11th Cir. 2003)). Even so, it is well understood
that a court “has the authority to enter default judgment for failure … to comply
with its orders or rules of procedure.” Wahl v. McIver, 773 F.2d 1169, 1174 (11th
Where, as here, a defendant has failed to answer, appear, or otherwise
acknowledge a suit after service, entry of a default judgment may be appropriate.
Rule 55 itself provides for entry of default and default judgment when a defendant
“has failed to plead or otherwise defend” against a claim. Fed. R. Civ. P. 55(a).
Indeed, courts have entered default judgments against defendants who have failed
to defend a claim of trademark infringement against them following proper service
of process. See, e.g., Illinois Tool Works Inc. v. Hybrid Conversions, Inc., 817 F.
Supp. 2d 1351 (N.D. Ga. 2011) (issuing a default judgment awarding damages and
instituting a permanent injunction in a trademark infringement action); Alfa Corp.
v. Alfa Mortg. Inc., 560 F. Supp. 2d 1166 (M.D. Ala. 2008) (issuing a default
judgment granting damages and a permanent injunction in a trademark
infringement action brought under the Lanham Act and Alabama common law);
PetMed Express, Inc. v. MedPets.Com, Inc., 336 F. Supp. 2d 1213 (S.D. Fla. 2004)
(entering a default judgment awarding damages and a permanent injunction in a
trademark infringement case). “In short, then, ‘[w]hile modern courts do not favor
default judgments, they are certainly appropriate when the adversary process has
been halted because of an essentially unresponsive party.’” Virgin Records America,
Inc., 510 F. Supp. 2d at 591 (quoting Flynn v. Angelucci Bros. & Sons, Inc., 448 F.
Supp. 2d 193, 195 (D.D.C. 2006)).
As established above, Plaintiff completed service of process on Defendants.
Defendants did not respond. Upon Plaintiff’s motion, the Clerk made an entry of
default, but this entry alone does not necessarily entitle Plaintiff to a default
judgment. It is well established that a default is not an admission of liability
establishing a right to recover. Default is merely “an admission of the facts cited in
the Complaint, which by themselves may or may not be sufficient to establish a
defendant’s liability.” Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 F. Supp. 2d 1353,
1357 (S.D. Ga. 2004). More simply, “a default judgment cannot stand on a
complaint that fails to state a claim.” Chudasama v. Mazda Motor Corp., 123 F.3d
1353, 1370 n. 41 (11th Cir. 1997). If the facts within the complaint establish
liability, then the Court must determine appropriate damages. Where all essential
evidence is of record, an evidentiary hearing on damages is not required. See S.E.C.
v. Smyth, 420 F.3d 1225, 1232 n.13 (11th Cir. 2005) (“Rule 55(b)(2) speaks of
evidentiary hearings in a permissive tone…. We have held that no such hearing is
required where all essential evidence is already of record.”) (citations omitted); see
also PetMed Express, 336 F. Supp. 2d at 1223 (entering default judgment,
permanent injunction, and statutory damages in a Lanham Act case without a
A. Federal and Common Law Trademark Infringement (Claims I and III)
Section 32(1) of the Lanham Act attaches liability for trademark
infringement when a person “use[s] in commerce any reproduction, counterfeit,
copy, or colorable imitation of a registered mark” which “is likely to cause confusion,
or to cause mistake, or to deceive.” 15 U.S.C. § 1114(1)(a). In a successful
trademark infringement claim, a plaintiff establishes that (1) defendant used
plaintiff’s mark in commerce, (2) without plaintiff’s consent, and (3) defendant’s
mark is likely to cause consumer confusion or result in mistake. Int’l Cosmetics
Exch., Inc. v. Gapardis Health & Beauty, Inc., 303 F.3d 1242, 1249 (11th Cir. 2002);
see also Alfa Corp., 560 F. Supp. 2d at 1174 (applying this three part test to a
default judgment for trademark infringement). The elements of an Alabama statelaw infringement claim are the same as they are under the Lanham Act. Alfa
Corp., 560 F. Supp. 2d at 1175 (citing Arthur Young, Inc. v. Arthur Young & Co.,
579 F. Supp. 384, 389 (N.D. Ala. 1983)).
Plaintiff’s Complaint establishes that Plaintiff is the registrant of the
QUALITY® family of marks. Defendants were no longer authorized to use the
QUALITY® family of marks after August 29, 2013. Even so, Defendants continued
to use Plaintiff’s marks in operation of the Motel. The mark Defendants continued
to operate the Motel under is in fact a QUALITY® mark. Their unauthorized use of
the mark is sure to lead consumers to believe that the Motel is actually affiliated
with Plaintiff. Additionally, Defendants made no attempt to respond to or defend
against this action, although provided notice. Defendants’ “course of conduct
amounts to a deliberate and intentional failure to respond, which is just the sort of
dilatory litigation tactic for which the default judgment mechanism was created.”
Virgin Records America, Inc., 510 F. Supp. 2d at 592. Therefore, the Court
concludes that Plaintiff is entitled to default judgment on Count 1 of the Complaint.
Further, Plaintiff is entitled to default judgment on the common law trademark
infringement claim in Count III since Alabama’s elements are the same as under
the Lanham Act.2
B. Federal Unfair Competition (Count II)
Section 43(a)(1)(A) of the Lanham Act creates a cause of action for unfair
competition. 15 U.S.C. § 1125(a). To succeed on a claim of unfair competition, a
plaintiff must establish “(1) it had prior rights to the mark at issue, and (2) the
defendant adopted a mark or name that was the same, or confusingly similar to,
plaintiff’s mark such that consumers were likely to confuse the two.” Alfa Corp.,
560 F. Supp. 2d at 1174 (citing Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d
1188, 1193 (11th Cir. 2001)).
As established above, Plaintiff’s Complaint establishes that it is the
registrant of the QUALITY® family of marks. Little question exists that Plaintiff
has priority since Defendants sought a franchise from Plaintiff. The mark
Defendants used and continue to use is a holdover from prior authorized use, so
confusion is certain. Defendants’ deliberate and intentional failure to respond
further justifies default judgment in this matter. Virgin Records America, Inc., 510
Plaintiff styles Count III as a claim of “Common Law Trademark/Unfair
Competition”; however, the elements Plaintiff speaks to under Count III go to a
claim of trademark infringement. Further, Plaintiff relies on “the arguments and
evidence cited [in its] federal infringement claim” section to support default
judgment on Count III. (Doc. 16, p. 9). The Court deduces that Plaintiff does not
raise a separate common law claim of unfair competition. Support for this
deduction is grounded in the principle that “Alabama does not recognize a commonlaw tort of unfair competition.” Alfa Corp., 560 F. Supp. 2d at 1175. Indeed,
Plaintiff heavily relies on Alfa Corp. to support the present motion and, therefore, is
aware no such action lies under Alabama’s common law. To the extent Plaintiff
does, in fact, raise such a claim, it is DENIED for the reasons just stated.
F. Supp. 2d at 592. Therefore, the Court finds that Plaintiff is entitled to default
judgment on Count II.
Plaintiff seeks four different remedies: (1) a permanent injunction against
Defendants, (2) a destruction order, (3) recovery of Defendants’ profits and
Plaintiff’s damages for the period of infringement, and (4) attorneys’ fees and costs.
The Court will address each in turn.
1. Permanent Injunction
Plaintiff moves the Court for a permanent injunction requiring the following:
(1) Defendants be permanently and forever enjoined from using the QUALITY®
family of marks; (2) Defendants immediately remove all signage or indicia bearing
the QUALITY® family of marks from the Motel; and (3) Defendants file a sworn
statement of compliance which specifically states the date upon which they ceased
use of the QUALTIY® family of marks at the Motel. (Doc. 16, pp. 11–12).
The Lanham Act confers the “power to grant injunctions, according to the
principles of equity and upon such terms as the court may deem reasonable, to
prevent the violation of any right of the registrant of a mark registered in the
Patent and Trademark Office.” 15 U.S.C. § 1116(a). An issuing court may require a
defendant to serve upon a plaintiff “a report in writing under oath setting forth in
detail the manner and form in which the defendant has complied with the
injunction.” Id. Equitable principles require a plaintiff seeking a permanent
injunction establish four elements: “(1) it has suffered an irreparable injury; (2)
remedies available at law, such as monetary damages, are inadequate to
compensate for that injury; (3) considering the balance of hardships between the
plaintiff and defendant, a remedy in equity is warranted; and (4) the public interest
would not be disserved by a permanent injunction.” Angel Flight of Ga., Inc. v.
Angel Flight of America, Inc., 522 F.3d 1200, 1208 (11th Cir. 2008) (citing eBay Inc.
v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)).
“‘[I]rreparable injury include[s] loss of control of reputation, loss of trade, and
loss of goodwill.’” Sylvan Learning Inc. v. Learning Solutions, Inc., 795 F. Supp. 2d
1284, 1299 (S.D. Ala. 2011) (quoting Ferrellgas Partners, L.P. v. Barrow, 143 F.
App’x 180, 190 (11th Cir. 2005)). As the court in Ferrellgass explained,
[t]he most corrosive and irreparable harm attributable to trademark
infringement is the inability of the victim to control the nature and
quality of the defendants’ goods. Even if the infringer’s products are of
high quality, the plaintiff can properly insist that its reputation should
not be imperiled by the acts of another.
Ferrellgas, 143 F. App’x at 190–91 (citation omitted). It is not necessary that actual
damage to a plaintiff’s reputation be established because “the loss of control of one’s
reputation by the adoption of a confusingly similar mark [ ] supplies the substantial
threat of irreparable harm.” Id. at 191.
In this case, Defendants’ infringement affords them unfettered use of the
QUALITY® family of marks. This robs Plaintiff of any control or input into actions
directly bearing on its reputation and goodwill. Plaintiff claims that this has
exposed and continues to expose it to irreparable injury. (Doc. 1, ¶ 97). The Court
agrees. Moreover, Defendants continue to display Plaintiff’s trademarks at the
Motel. At a minimum, Defendants’ display is sure to cause confusion because
consumers have no reasonable means of establishing that the Motel is not affiliated
with Plaintiff. Therefore, the Court is satisfied that Plaintiff has satisfactorily
established irreparable injury.
The Court is also satisfied that Plaintiff has shown that no adequate remedy
at law exists. “It is generally recognized in trademark infringement cases that [ ]
there is not adequate remedy at law to redress infringement ….” Tally-Ho, Inc. v.
Coast Cmty. Coll. Dist., 889 F.2d 1018, 1029 (11th Cir. 1989) (citation omitted). In
fact, a holdover franchisee’s continued use of a trademark establishes that money
damages are inadequate. Hospitality Intern., Inc. v. Sitaram, Inc., 2013 WL
6798927, at *7 (M.D. Fla. Dec. 23, 2013).
Considering the balance of hardships, it has been established that
Defendants continue to operate the Motel under the QUALITY® family of marks.
Plaintiff stands to lose goodwill so long as Defendants continue their infringement
since consumers could easily believe the Motel is affiliated with Plaintiff. Should
consumers be dissatisfied with a stay at the Motel, they might provide a bad review
or not stay with a QUALITY® family of marks franchise again. All along, Plaintiff
would have no control over the outcome of a visit. In contrast, injunctive relief
would not be focused on curtailing all operations of the Motel, just the unauthorized
use of Plaintiff’s trademarks. Defendants have no right to operate under the
QUALITY® family of marks, and “therefore could suffer no legitimate hardship by
being forced to stop that which [they] ha[ve] no right to do.” Tiramisu Intern. LLC
v. Clever Imports, LLC, 741 F. Supp. 2d 1279, 1288 (S.D. Fla. 2010). Therefore, the
undersigned is satisfied the balance of hardships tips in favor of Plaintiff.
As to the final element, “the ‘public interest’ relevant to the issuance of a
permanent injunction is the public’s interest in avoiding unnecessary confusion.”
Angel Flight, 522 F.3d at 1209. Prohibition of Defendants’ further use of Plaintiff’s
trademarks will certainly benefit the public by eliminating any possible confusion
regarding Defendants’ affiliation with the QUALITY® family of marks.
Given that Plaintiff has demonstrated all four elements, the Court finds that
a permanent injunction foreclosing Defendants’ trademark infringement is, in fact,
“the order of the day.” Angel Flight, 522 F.3d at 1209. Defendants are hereby
permanently enjoined from use of the QUALITY® family of marks as set out below.3
2. Destruction of QUALITY® Family of Marks in Defendants’ Possession
Plaintiff requests that the Court issue an order requiring that Defendants
destroy any item in their custody or control bearing the QUALITY® family of
marks.4 (Doc. 16, p. 12). Under the Lanham Act, a court may order infringing
items “delivered up and destroyed.” 15 U.S.C. § 1118. Of course, a prerequisite to
such an order is that a plaintiff establish a valid claim of infringement. This
prerequisite is established above.
However, courts are reluctant to issue a destruction order when a plaintiff’s
right against infringement is adequately protected by a permanent injunction. See
Romag Fasteners, Inc. v. Fossil, Inc., 29 F. Supp. 3d 85, 112 (D. Conn. 2014) (finding
a destruction order unnecessary when a permanent injunction issues); Neva, Inc. v.
Christian Duplications Int’l, Inc., 743 F. Supp. 1533, 1549 (M.D. Fla. 1990) (same).
Therefore, the Court need not determine whether Plaintiff is due an injunction
based on Count II or Count III.
4 Plaintiff requests destruction as part of the injunction, but as explained,
destruction of infringing items is a separate remedy under the Lanham Act.
This reluctance, however, is not without exception. “[W]hen a defendant has
defaulted, an order pursuant to § 1118 may be issued in addition to a permanent
injunction when necessary to protect plaintiff’s interest.” Diesel S.P.A. v. Does,
2016 WL 96171, at *11 (S.D.N.Y. Jan. 8, 2016) (ordering delivery and destruction of
infringing products because “the [d]efendants … failed to appear in th[e] action, and
because th[e] [c]ourt ha[d] no assurance that [the] [d]efendants w[ould] comply with
the terms of the permanent injunction”); S & S Brands, Inc. v. Seaford Stop & Shop
Inc., 2014 WL 3871396, at *4 (E.D.N.Y. Aug. 5, 2014) (“[B]ecause the defendant has
defaulted, the court cannot determine the extent of destruction that may be
necessary, and … is unable to obtain representations from Defendant [ ] that [it]
will comply with the injunction.”); Hammerhead Entertainment, LLC v. Ennis, 2011
WL 2938488, at *10 (E.D. Va. July 19, 2011) (issuing a destruction order
contemporaneously with an injunction when the defendant defaulted).
Given Defendants’ default status, the Court finds that Plaintiff’s interests are
more adequately protected with a permanent injunction and a § 1118 order.
Plaintiff, however, does not request that Defendants deliver up the infringing items
but merely asks for Defendants to destroy them. Given Defendants’ disregard for
legal proceedings and ongoing infringement, the Court finds the more prudent
measure is for Defendants to deliver up and Plaintiff ensure destruction. Therefore,
a delivery and destruction order under § 1118 should issue. Plaintiff shall provide
notice to the Court and Defendants unto whom delivery should be made.
Defendants will have thirty (30) days from such notice to make delivery as set forth
3. Profits and Damages
The registrant of a trademark who successfully establishes a defendant’s
infringement of that mark is entitled, “subject to the provisions of sections 1111 and
1114 …, and subject to the principles of equity, to recover (1) defendant’s profits
[and] (2) any damages ….” 15 U.S.C. § 1117(a). Recovery for infringement is
“cumulative, that is, the court may award the registrant both its damages and the
infringer’s profits.” Inmuno Vital, Inc. v. Golden Sun, Inc., 49 F. Supp. 2d 1344,
1362 (S.D. Fla. 1997). Section 1117 “confers upon the district court a wide scope of
discretion to determine the proper relief due an injured party.” Burger King Corp.
v. Weaver, 169 F.3d 1310, 1315 (11th Cir. 1999).
Presently, Plaintiff seeks to recover both damages and profits. But as
Plaintiff points out, Defendants’ default status makes calculating either
problematic. To be sure, royalties cannot be properly calculated because
Defendants have made unauthorized use of the QUALITY® family of marks from
August 29, 2013 through at least July 22, 2016. So, Defendants must identify the
date upon which they ceased use of the QUALITY® family of marks in order to
calculate royalties. Additionally, without documentation from Defendants, there is
no way to know what profits Defendants realized from their unauthorized use of the
QUALITY® family of marks. Therefore, pursuant to 15 U.S.C. § 1116(a), the Court
finds Defendants shall provide an accounting of gross profits and a declaration as to
when they ceased using the QUALITY® family of marks in writing and under oath
as set forth below.
4. Costs and Attorneys’ Fees
As with damages, the Lanham Act allows a registrant who establishes a
defendant’s trademark infringement to collect costs and attorneys’ fees. 15 U.S.C. §
1117(a). With respect to attorneys’ fees, the statute specifies that a court may
award them “in exceptional cases.” Id. “Exceptional cases are those where the
infringing party acts in a malicious, fraudulent, deliberate, or willful manner.”
Planetary Motion, 261 F.3d at 1205 (citation omitted).
To begin with, the plain language of § 1117(a) makes clear that the higher
standard for attorneys’ fees does not apply to costs. Plaintiff as the prevailing party
is, therefore, due to recover qualifying costs incurred in this action. As to attorneys’
fees, Plaintiff has established that Defendants made unauthorized use of the
QUALITY® family of marks. Defendants have had ample notice to cease use of the
QUALITY® family of marks but persist in their unauthorized use. It is this
continued use that demonstrates the deliberate and willful nature of Defendants’
infringement. Thus, Plaintiff, the prevailing party, is also entitled to reasonable
attorneys’ fees. However, as Plaintiff points out, several matters remain
unresolved. The total attorneys’ fees and costs are certain to change. The Court,
therefore, reserves ruling on the amount of reasonable attorneys’ fees and costs due
until a later time.
In consideration of the above, the Court hereby FINDS as follows:
1. Plaintiff’s Motion for Default Judgment (Doc. 18) is GRANTED.
2. A permanent injunction ISSUES as follows:
a. Defendants, their officers, agents, employees, representatives,
subsidiaries, successors, assigns, and any persons or entities in
active concert or participation with Defendants, shall be and
hereby are PERMANENTLY ENJOINED and restrained from
using any of the QUALITY® family of marks as set forth in
footnote 1 or any mark confusingly similar thereto in connection
with the advertising, promotion, or sale of any product or
b. Defendants, their officers, agents, employees, representatives,
subsidiaries, successors, assigns, and any persons or entities in
active concert or participation with Defendants, shall be and
hereby are PERMANENTLY ENJOINED and restrained from
operating or doing business under any name or mark that is
likely to give the impression that the Motel is licensed by
c. Defendants are required to IMMEDIATELY remove any and all
QUALITY® branded signs, placards, and source indicators from
the Motel located at 1610 South Main Street, Atmore, Alabama
d. Within thirty (30) days of this Order, Defendants shall file with
the Court and serve on counsel for Plaintiff a written statement
made under oath setting forth all of the steps taken to comply
with this Order.5
3. Plaintiff is ORDERED to serve notice to Defendants where all items
to be destroyed are to be delivered within ten (10) days of entry of this
4. Defendants are ORDERED to deliver up to Plaintiff for destruction all
items, products, labels, signs, prints, packages, wrappers, receptacles,
and/or advertisements in their possession or control bearing any of the
QUALITY® family of marks as described in footnote 1 or any mark
confusingly similar thereto within thirty (30) days of receiving service
of notice from Plaintiff as to where such items are to be delivered.
5. Defendants are ORDERED to submit within thirty (30) days of this
Order a report in writing and under oath setting forth the following:
(1) the date upon which Defendants ceased use of the QUALITY®
family of marks at the Motel and (2) an accounting of all gross profits
received at the Motel from August 29, 2013 through the date
Defendants ceased use of the QUALITY® family of marks. The parties
shall notify the Court when said accounting is concluded. Upon
conclusion of the accounting, the Court will order additional relief as
the Court considers appropriate, at which time a final judgment will
issue. Should the Court find a hearing necessary to determine the
nature and amount of any damages or profits, the parties will be
Any writing herein required by Defendants need not be individually submitted by
each Defendant but can be made by all acting in unison.
The Clerk is directed to mail two copies of this Order, one by certified mail,
return receipt requested, and the other by first class mail, to Defendants at the
address where each received service of process, to wit:
1. Key Hotels of Atmore II, LLC at 3960 Wimbledon Park, Mobile, AL
2. Anand Patel at 3960 Wimbledon Park, Mobile, AL 36608;
3. Dipan Patel at 6401 Canebrake Road, Mobile, Alabama 36695; and
4. Sarju Patel at 108 East Oak Ridge Place, Brewton, AL 36426.
DONE and ORDERED this 9th day of November, 2016.
/s/ Callie V. S. Granade
SENIOR UNITED STATES DISTRICT JUDGE
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