2002 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-28-2002

Choice Hotels Intl v. Pennave Assoc Inc

Precedential or Non-Precedential: Non-Precedential

Docket No. 01-1632

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Recommended Citation

"Choice Hotels Intl v. Pennave Assoc Inc" (2002). 2002 Decisions. Paper 542.

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 NOT PRECEDENTIAL 

 THE UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 ___________ 

 Nos. 01-1632, 01-1925, and 01-2397 

 ___________ 

 CHOICE HOTELS INTERNATIONAL, INC., 

 vs. 

 PENNAVE ASSOCIATES, INC.; DAVID S. MILLER, 

 David S. Miller, Appellant. 

 ___________ 

 APPEAL FROM THE UNITED STATES DISTRICT COURT 

 FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

 (D.C. No. 98-cv-04111) 

 District Judge: The Honorable Berle M. Schiller 

 ___________ 

 ARGUED JULY 23, 2002 

 BEFORE: SLOVITER, NYGAARD, and BARRY, Circuit Judges. 

 (Filed August 28, 2002) 

 ___________ 

Donald J. Martin, Esq. (Argued) 

22 West Airy Street 

Norristown, PA 19401 

 Counsel for Appellant 

Cecelia L. Fanelli, Esq. (Argued) 

Katten, Muchin, Zavis & Rosenman 

575 Madison Avenue 

New York, NY 10022 

 Counsel for Appellee 

 ___________ 

 OPINION OF THE COURT 

 ___________ 

NYGAARD, Circuit Judge. 

 Following a trial, the District Court concluded that Appellant, David S. 

Miller’s use of Choice Hotel’s trademark without its consent violated 15 U.S.C. 1114. 

It found that Miller’s use of the Clarion mark was likely to deceive as to the connection 

between Miller’s hotel and Choice Hotels in violation of 15 U.S.C. 1125(a). The court 

also held Miller individually liable for his acts of infringement because no "special or 

contractual relationship is required" to hold an individual liable for acts of infringement. 

Because Miller failed to maintain and produce accurate records of his profits and losses, 

the court exercised its discretion under 15 U.S.C. 1117(a) to award Choice Hotels 
$100,000.00 as profits. The court also awarded attorneys’ fees pursuant to 15.S.C. 

1117(a) because it found that Miller’s conduct constituted knowing and willful 

infringement. Miller now appeals. He contends in numerous issues that the District 

Court erred both in awarding damages and attorneys fees to the Appellee. 

 We apply plenary review to the District Court’s conclusions of law with 

respect to the Lanham Act claim. Express Servs., Inc. v. Careers Express Staffing Servs, 

176 F.3d 183, 185 (3d Cir. 1999). We review factual findings regarding the Lanham Act 

violations for clear error. Id. We review the District Court’s finding that this was an 

"exceptional case," and thus merited an award of attorneys’ fees, for an abuse of 

discretion. Securacomm Consulting, Inc. v Securacom, Inc., 224 F.3d 273, 279 (3d Cir. 

2000). The method by which attorneys’ fees were awarded is a question of law to which 

we apply plenary review. Loughner v. Univ. of Pittsburgh, 260 F.3d 173, 177 (3d Cir. 

2001). We review the District Court’s award of equitable remedies for an abuse of 

discretion. Voest-Alpine Trading USA Corp. v. Vantage Steel Corp., 919 F.2d 206, 211 

(3d Cir. 1990) 

 As noted, this is an action for trademark infringement under 15 U.S.C. 

1051 et seq., unfair competition under 15 U.S.C. 1125(a), and unfair competition under 

state law. The District Court had jurisdiction pursuant to 15 U.S.C. 1121, 28 U.S.C. 

1338, and 28 U.S.C. 1367. We have appellate jurisdiction under 28 U.S.C. 1291. We 

will affirm. 

 DISCUSSION 

 The facts and procedural history are well known to the parties, and we see 

no benefit in recounting them in any detail greater than necessary to explain our decision 

to the parties. We note at the outset that Miller’s first argument seems to confuse the 

issue of liability with the issue of damages. He argues that there was no proof of loss, 

which is a damages issue, and that there was no proof of confusion, which is a liability 

issue. The answer, however, is in the text of the statute itself, which does not require that 

actual confusion be proved for an award of damages. Use of a mark which is "likely to 

cause confusion" is all that is required by 15 U.S.C. 1125(a)(1)(A). 

 Miller next argues that Choice failed to prove actual damages, and that 

absent evidence of actual damage, there is no right to an award of damages or profits. 

Miller’s argument again falls before the language of the statute. It is clear from the 

statute itself that an award of profits is not conditioned upon an award of damages. The 

statute clearly provides that a prevailing party can recover three distinct types of awards, 

which are enumerated as "(1) defendant’s profits, (2) any damages sustained by the 

plaintiff, and (3) the costs of the action." There is no statutory language limiting awards 

of profits only to those situations where damages are also awarded. Miller’s argument 

that "[a]bsent evidence of actual damage, there is no right to an award of damages or 

profits" is simply wrong. 

 Next, section 1117(a) of the Lanham Act permits a district court to award 

attorneys’ fees "in exceptional cases." Miller challenges the District Court’s finding that 

this is one of those "exceptional cases." Considering that we review its findings for clear 

error and its award for an abuse of discretion, we only need note that the record 

overwhelmingly supports the District Court’s award. Without recapitulating all the facts, 

we merely note that (1) Miller received numerous letters from Choice informing him of 

his infringing conduct, but he ignored them; and (2) Miller failed to comply with the 

District Court’s temporary restraining order within the appropriate time period. Under 

these circumstances, the District Court’s finding that this is an "exceptional case" is more 

than amply supported. After an extensive review of the record, we conclude that each of 

the District Court’s findings is supported, and that the District Court’s fee decision is 

within the limits of its discretion. 

 CONCLUSION 

 In sum, after thoroughly examining the issues, hearing oral argument on the 

cause, and following an extensive review of the record, we conclude that there is no merit 

to any of Appellant’s issues, and will affirm. 

_________________________ 

TO THE CLERK: 
 Please file the foregoing opinion. 

 /s/ Richard L. Nygaard 

 Circuit Judge