United States District Court, W.D. Virginia, Roanoke Division
ELIZABETH K. DILLON, UNITED STATES DISTRICT JUDGE
an action for trademark infringement filed by Choice Hotels
International, Inc. (Choice Hotels or Choice). Choice Hotels
alleges that A Royal Touch Hospitality, LLC (NC) (A Royal
Touch (NC)), Ujas B. Patel, and Ketki Patel (the Franchisee
Defendants) continued using Choice's trademarks after
their franchise agreement with Choice was terminated. Choice
also alleges that A Royal Touch Hospitality, LLC (VA) (A
Royal Touch (VA)), a related non-franchisee, made
unauthorized use of Choice's marks. Choice moves for
summary judgment. (Mot. Summ. J., Dkt. No. 36.) Defendants
are not represented by counsel, and none of the defendants
responded to Choice's motion for summary
reasons stated below, the court will grant Choice Hotels'
motion for summary judgment.
Hotels is the owner of a family of QUALITY® trademarks
which it uses in connection with its lodging franchise
business. Included in that family of marks are the following
United States Trademark Registrations: the ‘881
registration; the ‘372 registration; the ‘294
registration; the ‘820 registration; and ‘488
registration; the ‘999 registration; the ‘875
registration; the ‘054 registration; the ‘436
registration; the ‘437 registration; the ‘888
registration; the ‘885 registration; the ‘789
registration; and the ‘912 registration. (Dkt. Nos. 1-1
about June 16, 2010, Choice Hotels entered into a Franchise
Agreement with A Royal Touch (NC), Ujas B. Patel, and Ketki
Patel, which permitted them to operate a QUALITY INN®
hotel franchise at 429 Main Street, Covington, Virginia 24426
(the Subject Property). Seven days after execution of the
Franchise Agreement, Ketki Patel created a new limited
liability company in Virginia under the same name, A Royal
Touch Hospitality, LLC, and identified the Subject Property
as its registered office address. A Royal Touch (VA) was
never a party to the Franchise Agreement or the
later-executed Reinstatement Agreement, and thus was not
permitted to operate a QUALITY INN® hotel franchise at
the Subject Property.
Patel, Ujas Patel, and A Royal Touch (NC) defaulted on their
material obligations under the Franchise Agreement, and on
December 30, 2013, Choice Hotels terminated the Franchise
Agreement. A Royal Touch (NC) was administratively dissolved
in March 2014. Even so, on or about April 22, 2014, Choice
entered into a Reinstatement Agreement with Ujas B. Patel,
Ketki Patel, and (purportedly) A Royal Touch (NC) reinstating
the Franchise Agreement. Ketki Patel executed the
Reinstatement Agreement on behalf of A Royal Touch (NC)
knowing that the company had been administratively dissolved.
Thereafter, Ketki Patel, Ujas Patel, and A Royal Touch
(VA)--purporting to be A Royal Touch (NC)--defaulted on the
payment obligations imposed by the Reinstatement Agreement.
Accordingly, on June 3, 2015, Choice Hotels terminated the
Reinstatement Agreement. The Franchisee Defendants admit they
did not comply with the terms of the Notice of Termination.
22, 2016, Choice issued a Notice of Service Mark Infringement
to the Franchisee Defendants. The Franchisee Defendants admit
the Notice of Service Mark Infringement instructed them to
immediately discontinue all use of the QUALITY® family of
marks and to take immediate action to correct its identity
with third-party booking sites like Tripadvisor.com,
Expedia.com, and Booking.com. The Franchisee Defendants admit
they did not comply with the Notice of Infringement.
about August 5, 2017, counsel for Choice conducted a site
inspection of the Subject Property. Photographs show the
QUALITY® family of marks on display. (Compl. ¶ 81,
Dkt. No. 1.) Defendants admit that in addition to signage
bearing the QUALITY® family of marks, the hotel at the
Subject Property displays a white BAYMONT INN &
SUITES® branded banner. (Answer ¶ 82, Dkt. No. 10.)
BAYMONT INN & SUITES® is not a Choice Hotels brand.
(Id. ¶ 83.) Defendants further admit in their
answer that the online third-party booking site
Tripadvisor.com identifies the Subject Property as a BAYMONT
INN & SUITES® but displays photographs of the hotel
bearing both QUALITY® and BAYMONT INN & SUITES®
signage. (Id. ¶ 84.) A photograph shows the
hotel located at the Subject Property in obvious disrepair.
(Id. ¶ 85.)
Touch (VA) was never a party to an agreement that would allow
it to operate a QUALITY INN® hotel franchise at the
Subject Property. Even so, A Royal Touch (VA) operated such a
franchise from March 2014 until September 2017 while
purporting to be A Royal Touch (NC).
the Reinstatement Agreement was terminated on June 3, 2015, A
Royal Touch (NC), Ketki Patel, and Ujas B. Patel were not
authorized to use any of the marks in the QUALITY® family
of marks at the Subject Property. Notwithstanding, A Royal
Touch (VA), purporting to be A Royal Touch (NC), Ketki Patel,
and Ujas B. Patel continued to make extensive unauthorized
use of the QUALITY® family of marks at the Subject
Property until at least September 2017.
Standard of Review
obtain summary judgment, the moving party must show that
there is no genuine dispute as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). In considering a motion for summary
judgment, the court will not “weigh the evidence and
determine the truth of the matter.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Instead,
the court will draw any permissible inference from the
underlying facts in the light most favorable to the nonmoving
party. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587-88 (1986).
noted above, Choice's motion is unopposed, but the court
does not automatically grant such a motion.
[I]n considering a motion for summary judgment, the district
court ‘must review the motion, even if
unopposed, and determine from what it has before it whether
the moving party is entitled to summary judgment as a matter
of law.' Custer v. Pan Am. Life Ins. Co., 12
F.3d 410, 416 (4th Cir. 1993) (emphasis added).
‘Although the failure of a party to respond to a
summary judgment motion may leave uncontroverted those facts
established by the motion,' the district court must still
proceed with the facts it has before it and determine whether
the moving party is entitled to judgment as a matter of law
on those uncontroverted facts. Id.
Robinson v. Wix Filtration Corp. LLC, 599 F.3d 403,
409 n.8 (4th Cir. 2010).
Federal Trademark Infringement
trademark infringement is governed by Section 32 of the
Lanham Act. 15 U.S.C. § 1114. To establish trademark
infringement under the Lanham Act, Choice Hotels must prove:
(1) that it owns a valid mark; (2) that the defendant used
the mark “in commerce” and without
plaintiff's authorization; (3) that the defendant used
the mark (or an imitation of it) “in connection with
the sale, offering for sale, distribution, or
advertising” of goods or services; and (4) that the
defendant's use of the mark is likely to confuse
consumers. Rosetta Stone Ltd. v. Google, Inc., 676
F.3d 144, 152 (4th Cir. 2012).
Ownership of a valid trademark
certificates of registration are attached as exhibits to the
complaint. (See Dkt. Nos. 1-1 to 1-14.) When the
Patent and Trademark Office issues a certificate of
registration, that registration provides the registrant with
prima facie evidence of the validity of the mark and its
registration, the registrant's ownership, and the
registrant's “exclusive right” to use the
mark on or in connection with the goods and services
specified in the certificate of registration. U.S.
Search, LLC v. U.S. Search.com Inc., 300 F.3d 517, 524
(4th Cir. 2002). In fact, these registrations have achieved
“incontestable status” pursuant to Section 15 of
the Lanham Act, 15 U.S.C. § 1065. (See Dkt.
Nos. 1-1 to 1-14.) Incontestable status is “conclusive
evidence of the validity of the registered mark and of the
registration of the mark, of the registrant's ownership
of the mark, and of the registrant's exclusive right to
use the registered mark in commerce.” 15 U.S.C. §
1115(b). Choice has demonstrated that it owns the trademarks
Unauthorized use of the mark in commerce
failing to respond to Choice's requests for admission,
defendants admitted to making unauthorized use of the
QUALITY® family of marks after termination of the
Franchise Agreement/Reinstatement Agreement. (See
Dkt. Nos. 37-3, 37-4, 37-5, 37-6.) In their Answer,
defendants admitted that the QUALITY® family of marks
“were visible” at the Subject Property following
termination of the Franchise Agreement. (Compl. ¶ 74;
Answer ¶ 74.) Choice Hotels also provided photographic
evidence of defendants' unauthorized use, taken more than
two years after termination of the Franchise
Agreement/Reinstatement Agreement. (Compl. ¶ 81.) Choice
has demonstrated unauthorized use in commerce.
In connection with ...