PHILADELPHIA – A panel of appellate judges has ruled to vacate a trial court’s decision with interpretation to statutes surrounding counterfeiting and pre-judgment interest in a trademark use action.

On Nov. 23, judges Michael A. Chagares, Thomas M. Hardiman and Anthony J. Scirica decided a U.S. District Court for the Middle District of Pennsylvania decision was partially vacated, and the case remanded to its trial court.

Hardiman authored the U.S. Court of Appeals for the Third Circuit's opinion in this matter.

Before Judge Yvette Kane on March 22, the trial court decreed the levying of a number of six-figure judgments against the defendants in this case due to violations of the Lanham Act [for trademark infringement] and the denial of requests for treble damages and pre-judgment interest, on behalf of the plaintiffs.

“Following a generally favorable result in the District Court, plaintiffs Motel 6 Operating LP, G6 Hospitality IP LLC, G6 Hospitality Franchising LLC, and G6 Hospitality LLC (collectively, “Motel 6”) filed this appeal,” Hardiman said.

In this appeal, Motel 6 claimed: “(1) The District Court committed legal error when it interpreted the Lanham Act’s anti-counterfeiting penalties not to reach the use of the Motel 6 mark without permission; and (2), The District Court abused its discretion when it failed to award pre-judgment interest to Motel 6.”

According to Court records, defendants HI Hotel Group LLC, Navnitlal B. Zaver, Shailesh Patel, 1450 Hospitality PA LLC, Priyesh K. Shah, and Indrajit Patel “neither filed a responsive brief nor participated in oral argument.” As a result, Hardiman said “the Court’s review and deliberation of the issues presented has been hindered by the absence of an adversarial presentation.”

“Having reviewed the record below and the brief filed on appeal, along with the relevant statutory and decisional law, the Court agrees that the District Court interpreted the Lanham Act too narrowly and contrary to the weight of persuasive authority,” Hardiman said.

“Accordingly, we will vacate the District Court’s order to the extent it holds that Motel 6 may not recover treble damages under 15 U.S.C. Section 1117(b), and remand the matter for the District Court to determine, with respect to each individual defendant/appellee, whether “extenuating circumstances” exist under Section 1117(b) such that treble damages would not be appropriate as to that particular party,” Hardiman added.

Hardiman said with respect to Motel 6’s second issue, the District Court believed the plaintiffs “were not entitled to pre-judgment interest because the case did not involve counterfeiting under the Lanham Act” and in following the decision to vacate the District Court order for counterfeiting in the case, the order for pre-judgment interest also had to be vacated.

“We disagree with Motel 6 that the District Court was required to award pre-judgment interest once it found the case exceptional for purposes of attorney’s fees and costs under Section 1117(a). Accordingly, we leave the decision whether to award pre-judgment interest to the sound discretion of the District Court after it considers anew the counterfeiting issue,” Hardiman stated.

“Accordingly, it is hereby ordered and adjudged by the Court that the judgment of the United States District Court for the Middle District of Pennsylvania entered March 22, 2016, be and the same is hereby vacated as to the above two issues alone, and the case is remanded to the United States District Court for the Middle District of Pennsylvania,” Hardiman said.

The plaintiffs are represented by Kristen A. Topolewski of Ward Greenberg Heller & Reidy, in Philadelphia.

U.S. Court of Appeals for the Third Circuit case 16-1989

U.S. District Court for the Middle District of Pennsylvania 1:11-cv-02176

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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