The last couple of months have now seen three trademark actions by hotel chains against accused holdover licensees. The first two that we covered dealt with the marks HOLIDAY INN® and RODEWAY INN®. The most recent one concerns a hotel operator in Vancouver, Washington and, once again, the HOLIDAY INN® family of marks.

On October 16, 2012, Holiday Hospitality Franchising, LLC (“HHFL”) and Six Continents Hotels, Inc. (collectively "Plaintiffs") sued Premier NW Investment Hotels, L.L.C. (“Premier”) and its manager and owner Michael DeFrees for federal service mark infringement, dilution under the Lanham Act, and unfair competition under the Lanham Act and Georgia common law.  Plaintiffs asserted a count solely against Premier for breach of a license agreement, and a count solely against Mr. DeFrees, who had become a guarantor regarding that license, for breach of his guarantee.

The complaint alleges that HHFL and Premier entered into a License Agreement on December 11, 1998, which “authorized and required” Premier to use Plaintiffs’ HOLIDAY INN® marks in the operation of a HOLIDAY INN EXPRESS® hotel in Vancouver, Washington.  “As an inducement to HHFL to execute the License Agreement,” alleges the complaint, Mr. DeFrees executed a guarantee that same date, December, 1998.  The License Agreement terminated on December 31, 2010, according to the complaint.

Plaintiffs’ allegations recite unsuccessful pre-lawsuit efforts to get the defendants to completely disassociate themselves from the HOLIDAY INN® brand, which they allege was required by the License Agreement.  For instance, although Premier removed the term “HOLIDAY” and substituted for it the word “GATEWAY,” Plaintiffs did not deem this sufficient: HHFL wrote Defendants and pointed to their continued use of the same scripted style of text that appears in HHFL’s HOLIDAY INN EXPRESS® registration (see comparisons below).   For further example, Plaintiffs allege that Defendants continue to use the domain name, with the letters “hie” standing for “Holiday Inn Express.”  The complaint and its exhibits refer to additional objections noted by Plaintiffs.  

Click here to see Mark appearing in U.S. Trademark Reg. No. 2,207,318

Click here to see Excerpt from Exhibit N to Complaint, purporting to show a sign on Defendants' hotel

´╗┐Part of the injunctive relief Plaintiffs request (in addition to compensatory monetary relief) is an order requiring Defendants to transfer the domain name to them, and to “deliver up for impoundment and destruction all HOLIDAY INN EXPRESS® signs including those on which the word ‘Holiday’ has been replaced with the word ‘Gateway.’”  Plaintiffs additionally request all expenses of litigation under Georgia’s “stubbornly litigious” statute, § 13-6-11, as well as attorneys’ fees under O.C.G.A. § 13-1-11[1] and 15 U.S.C. § 1117.

The case is Holiday Hospitality Franchising, LLC and Six Continents Hotels, Inc. v. Premier NW Investment Hotels, L.L.C. and Michael DeFrees, No. 1:12-cv-3608-RWS, filed 10/16/12 in the U.S. District Court for the Northern District of Georgia, Atlanta Division.  The case has been assigned to U.S. District Judge Richard W. Story.