Motel 6 Operating LP v. HI Hotel Group LLC
670 F. App'x 759
3rd Cir.2016Background
- Plaintiffs Motel 6 Operating LP and related entities (collectively "Motel 6") appealed after a generally favorable District Court result, contesting two legal rulings.
- Motel 6 sought treble damages under the Lanham Act’s anti-counterfeiting provision (15 U.S.C. § 1117(b)) for unauthorized use of the Motel 6 mark and requested prejudgment interest.
- The District Court had held that the anti-counterfeiting penalties did not apply to the defendants’ use of the Motel 6 mark and denied prejudgment interest.
- Several appellees did not file briefs or participate in oral argument; the Court noted the lack of an adversarial presentation.
- The Third Circuit found the District Court’s interpretation of the Lanham Act too narrow compared to persuasive authority and vacated the District Court’s rulings on treble damages and prejudgment interest.
- The case was remanded for the District Court to determine, as to each defendant, whether "extenuating circumstances" under § 1117(b) preclude treble damages, and to reconsider prejudgment interest in its discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lanham Act § 1117(b) anti‑counterfeiting treble damages can apply to defendants’ unauthorized use of the Motel 6 mark | § 1117(b) applies to defendants’ use and Motel 6 may recover treble damages | District Court: § 1117(b) does not reach this use; treble damages inappropriate | Vacated District Court’s narrow interpretation; remanded to decide per defendant if "extenuating circumstances" bar treble damages |
| Whether prejudgment interest must be awarded because the case was exceptional under § 1117(a) | Motel 6: award of prejudgment interest required once case found exceptional | District Court: denied prejudgment interest because it concluded no counterfeiting | Vacated District Court’s prejudgment‑interest ruling; left award of prejudgment interest to District Court’s discretion after reconsidering counterfeiting issue |
Key Cases Cited
- State of Idaho Potato Comm’n v. G & T Terminal Packaging, Inc., 425 F.3d 708 (9th Cir. 2005) (supporting broader reading of § 1117(b) to reach certain unauthorized uses)
- Rolex Watch U.S.A., Inc. v. Meece, 158 F.3d 816 (5th Cir. 1998) (interpreting anti‑counterfeiting remedies broadly)
- Gen. Elec. Co. v. Speicher, 877 F.2d 531 (7th Cir. 1989) (treating § 1117(b) as applicable to counterfeiting contexts beyond narrow readings)
- Century 21 Real Estate LLC v. Bercosa Corp., 666 F. Supp. 2d 274 (E.D.N.Y. 2009) (district court decision adopting a broad view of § 1117(b))
- U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185 (6th Cir. 1997) (contrasting authority that reads § 1117(b) more narrowly)