Thursday, September 6, 2012, 11:58 AM

Holiday Hospitality Franchising and the InterContinental Hotels Group File Suit Against Former Licensee of HOLIDAY INN® Marks

A Las Vegas hotel operator has been sued by the owners of the HOLIDAY INN® brand for allegedly continuing to use certain Holiday Inn service marks in connection with its hotel after the termination of a franchise agreement.

On August 31, 2012, Holiday Hospitality Franchising, LLC ("HHFL"), Six Continents Hotels, Inc. ("SCH"), doing business as InterContinental Hotels Group, IHG Management (Maryland) LLC ("IHGM"), and InterContinental Hotels Group Resources, Inc. ("IHGR") (collectively, "Plaintiffs"), all based in Atlanta, Georgia, filed a complaint in the Northern District of Georgia against Flamingo Structures LLC ("Flamingo"), Halston Mikail, Farrah Mikail, Kevin Bral, and Jackie Bral (collectively, "Defendants"), all of Santa Monica, California.  The 64-page complaint, with twenty-one supporting exhibits, asserts nine causes of action, including federal service mark infringement, dilution, unfair competition, and false designation of origin under the Lanham Act, common law trademark infringement and unfair competition, breach of license agreement, breach of guaranty agreement, and breach of management agreement.

According to the complaint, the Plaintiffs operate a worldwide network of more than 3,300 hotels under the HOLIDAY INN®, HOLIDAY INN EXPRESS®, and other federally registered service marks.  Plaintiffs contend that certain of the marks, including Reg. No. 0592539, issued on July 13, 1954 for the mark HOLIDAY INN for "motor hotel services--namely, providing lodging and restaurant services in motels and hotels," are incontestable.  Plaintiffs allege that HHFL entered into a License Agreement with Flamingo on July 28, 2006, authorizing Flamingo to use the HOLIDAY INN® marks in connection with the operation of a Holiday Inn franchise hotel.  The agreement called for the payment of certain fees to HHFL and required Flamingo to maintain certain standards at the hotel according to the "System" set in place by HHFL.  Plaintiffs claim that Flamingo breached the license agreement through its "failure to maintain brand standards" and its failure to pay the required licensing fees.  According to the complaint, Plaintiffs mailed several notification of default and demand letters to Flamingo, and formally terminated the license agreement on January 30, 2012.  Despite the termination of the license agreement, however, Plaintiffs claim that Flamingo continued to use its HOLIDAY INN® marks in connection with its renamed Blackstone Hotel.  According to TripAdvisor reviews, the Blackstone Hotel was still using certain Holiday Inn-branded items, including "Do Not Disturb" signs and various appliances, as of July 2012.

The complaint alleges that Plaintiffs are suffering irreparable harm and ask the Court to preliminarily and permanently enjoin the Defendants from further use of the HOLIDAY INN® marks, and order the destruction of all labels, signs, uniforms, advertising material, stationary, or other materials in Defendants' possession bearing the HOLIDAY INN® marks.  Plaintiffs also seek damages for infringement of its marks in an amount to be determined at trial, damages for breach of the license agreement and guaranty in the amount of $545,737.37, damages for breach of the management agreement and guaranty in the amount of $665,388.75, as well as attorneys' fees and costs.   

The case is Holiday Hospitality Franchising, LLC, et al. v. Flamingo Structures LLC, et al., No. 1:12-cv-3064-TCB, U.S. District Court for the Northern District of Georgia, Atlanta Division, and is assigned to U.S. District Judge Timothy C. Batten.

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2 Comments:

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