United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
H. Miller United States District Judge.
before the court is plaintiff Choice Hotels International,
Inc.'s (“Choice Hotels”) unopposed motion for
damages in its lawsuit against defendants Frontier Hotels,
Inc., Muhammad Khan, and Abdus Salam (collectively,
“Defendants”). Dkt. 23 (asking the court to rule
on Dkt. 19).Having considered the motion, evidence, and
applicable law, the court is of the opinion that the
previously denied portion of the motion should be GRANTED.
a trademark infringement case. Dkt. 18 at 1. Choice Hotels
owns twenty-four different trademark registrations related to
the “COMFORT” family of marks. Id. In
2008, Choice Hotels entered into a franchise agreement with
Defendants. Id. at 2. Under that agreement,
Defendants could operate a COMFORT INN® but had to stop
using the marks upon termination. Id. Defendants
breached. Id. On two occasions, Choice Hotels
alerted Defendants as to the breach. Id. On both
occasions, Choice Hotels gave Defendants a chance to cure.
Defendants did not cure, Choice Hotels terminated the
agreement and instructed Defendants to stop using any of its
registered trademarks. Id. Defendants did not stop.
Id. Instead, Defendants continued to use the marks
for over a year including up to the point Choice Hotels filed
its supplemental brief. Dkt. 19 at 6-7. Although
Defendants removed some signs after this suit began,
Defendants continued to use the marks in photographs posted
to third-party booking websites and on roadside signs.
Id. During discovery, Defendants provided incorrect
statements about when they removed the signs. Id.
Throughout this period, Defendants knew they needed to stop
using the marks yet continued to do so anyway. Defendants
even ignored the court's order that permanently enjoined
their use of those marks. Dkt. 18.
Income, expenses, and profits
to profit-loss sheets from December 2014 to February 2016,
Defendants earned a monthly average income of $58, 970.28 and
accrued $48, 646.86 in monthly expenses. Dkt. 19 at 8.
From December 2014 through February 2016, Defendants reported
$190, 641.69 in profits. Id. Because Defendants did
not provide profit-loss documentation for March through
August of 2016, Choice Hotels estimates based on figures from
the previous year. Id. at 9. Specifically, Choice
Hotels estimates that Defendants earned $61, 940.56 in
profits over those six months. Id. Adding together
Defendants' reported profits of $190, 641.69 and the
estimated profits of $61, 940.56, Choice Hotels calculates
Defendants' total profits for December 2014 through
August 2016 as $252, 582.25. Id.
the franchise agreement, franchisees owed Choice Hotels 9.5%
of their gross room revenue (not net profits). Dkt. 17-25.
From December 2014 through February 2016, Defendants'
total income was $917, 816.89. Dkt. 19. Using the average
monthly income of $58, 970.28, Defendants' estimated
total income for March through August 2016 was $358, 825.34.
Together, Defendants' gross room revenue was $1, 273,
Lanham Act provides monetary relief for successful trademark
infringement claims. 15 U.S.C. § 1117. Under §
1117(a), a plaintiff can recover: (1) defendant's
profits; (2) its actual damages; and (3) the costs of the
action. See 15 U.S.C. § 1117(a). Under that
subsection, the court can award up to three times actual
damages. Id.; see also Ga.-Pac., 781 F.3d
at 717. If the court finds that a defendant intentionally
infringed a counterfeit mark, the court can: (1) treble
plaintiff's actual damages or defendant's profits;
and (2) award reasonable attorneys' fees. 15 U.S.C.
§1117(b)(1); see also Ga.-Pac., 781 F.3d at
717; Yah Kai World Wide Enters. Inc. v. Napper, 292
F.Supp.3d 337, 364 (D.C. Cir. 2018) (accord). “Great
latitude is given the district court in awarding damages
under the Lanham Act.” Reservoir, Inc. v.
Truesdell, 1 F.Supp.3d 598, 617 (S.D. Tex. 2014) (Atlas,
J.) (quoting Martin's Herend Imports, Inc. v. Diamond
& Gem Trading USA, Co., 112 F.3d 1296, 1304 (5th
Hotels can recover Defendants' profits. 15 U.S.C. §
1117(b). Section 1117(b) directs the court to first determine
Defendants' profits under § 1117(a). See
Id. (“in assessing damages under [§ 1117(a)]
. . . in a case involving . . . a counterfeit mark . . . the
court shall . . . enter judgment for three times such profits
or damages, whichever amount is greater . . . if the
violation consists of intentionally using a mark . . .
knowing such mark is a counterfeit mark.”). For
profits, “the plaintiff shall be required to prove
defendant's sales only.” 15 U.S.C. § 1117(a).
Defendants must “prove all elements of costs or
deductions claimed.” Id. Defendants did not
respond, let alone claim any deductions.
Hotels calculated Defendants' profits as $252, 582.25.
Dkt. 19 at 8. The court finds that the record supports that
calculation. See Dkt. 19-5; Dkt. 19-9 at 2.
Specifically, Choice Hotels provided evidence of
Defendants' profit-loss sheets from December 2014 to
February 2016 amounting to $190, 641.69.Id.
Between March and August of 2016, Choice Hotels estimates
Defendants received $61, 940.56 in profits. Accordingly,