United States District Court, E.D. Washington
RED LIONS HOTELS FRANCHISING, INC., a Washington Corporation, Plaintiff,
GHAZANFAR KHAN, an individual; ZULFIQAR KHAN, an individual; MOHAMMAD TAFAIL KHAN, an individual; KHAN/SLEEP, LLC, a Colorado Limited Liability Company; and TOWER HOSPITALITY, LLC, a Colorado Limited Liability Company, Defendants.
ORDER GRANTING PRELIMINARY INJUNCTION
O. RICE Chief United States District Judge.
THE COURT is Plaintiff Red Lion Hotels Franchising,
Inc.'s Motion for Preliminary Injunction (ECF No. 13) and
Motion to Expedite (ECF No. 20). The Motion for Preliminary
Injunction (ECF No. 13) was submitted for consideration with
oral argument on May 3, 2017. J. Michael Keys and Brian J.
Janura represented Plaintiff. Of the Defendants, only
Defendant Ghazanfar Khan, pro se, participated
Court has reviewed the record and files herein, and is fully
informed. For good cause shown and the reasons discussed
below, the motions (ECF Nos. 13; 20) are
Red Lion Hotels Franchising, Inc. is the owner of several
federally registered trademarks. Per franchise agreements
between Plaintiff and Defendants, Defendants had a license to
use these trademarks contingent on their compliance with the
franchise agreements. ECF No. 13 at 5. According to
Plaintiff, Defendants have failed to pay substantial amounts
due under the agreements, and have therefore terminated the
agreements, requiring Defendants to “immediately”
remove any and all Red Lion trademarks from their respective
hotels per the terms of the respective agreements. ECF No. 13
at 5. Plaintiff contends, and supports with evidence, that
Defendants have continued to use the trademarks in violation
of the agreement and the federal Lanham Act. ECF No. 13 at
6-7. Plaintiff now seeks a preliminary injunction barring
Defendants from further use of the trademarks. ECF No. 13.
record now reflects that all Defendants have been properly
served with, inter alia, the Summons, the Complaint, the
Motion for Preliminary Injunction, and the supporting
pleadings. ECF No. 23-27, 35, 35-2, 35-3, 36.
should grant a preliminary injunction when a plaintiff
establishes “that [it] is likely to succeed on the
merits, that [it] is likely to suffer irreparable harm in the
absence of preliminary relief, that the balance of equities
tip in [its] favor, and that the injunction is in the public
interest.” Marylyn Natraceuticals, Inc. v. Mucos
Pharma GmbH & Co., 571 F.3d 873, 877 (9th Cir. 2009)
(citing Winter v. Natural Res. Def. Council, Inc.,
555 U.S. 7, 374 (2008)). Plaintiff contends that all four
factors strongly favor Red Lion and the issuance of a
preliminary injunction. The Court agrees.
prevail on a claim of trademark infringement, the plaintiff
must demonstrate that it (1) owns a valid trademark, and that
(2) it shows the defendant's mark is likely to cause
confusion. 15 U.S.C. § 1114(1); Brookfield
Commc'ns, Inc. v. W. Coast Entm't Corp., 174
F.3d 1036, 1046 (9th Cir. 1999). Plaintiff's federal
registrations demonstrate the validity of the trademarks, and
the Defendants explicitly acknowledged the ownership rights
in the mark. ECF No. 14-3 at 6, ¶ 4. Further, Plaintiff
clearly demonstrated a likelihood of consumer confusion: (1)
the mark is strong, as it is inherently distinctive and
arbitrary with respect to the underlying hotel services; (2)
the services are identical; (3) the trademarks are identical;
(4) there is evidence of actual confusion; (5) the marketing
channels are the same or at least very similar; (6) customers
would not be able to distinguish the services of Plaintiff
and Defendant, regardless of the degree of care exercised;
(7) Defendants selected the mark because of its desire to be
a franchisee per the franchise agreement; and (8) the
underlying services are identical, precluding the need to
determine likelihood of expansion. See AMF Inc. v.
Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979),
abrogated in part, on other grounds recognized by Mattel,
Inc. v. Walking Mountain Prods., 353 F.3d 792, 810 n.19
(9th Cir. 2003).
demonstrated by the actual confusion and negative reviews of
the hotels bearing the infringing trademarks, Plaintiff has
demonstrated a likelihood of irreparable harm. Notably, the
negative impression of customers of Defendants' hotels
will likely impact their future purchasing choices, and
Defendants' continued use of the trademarks will serve to
promote the false association. Financial recovery will not
adequately or fairly compensate this harm. See Sunearth,
Inc. v. Sun Earth Solar Power, Co., Ltd., 846 F.Supp.2d
1063, 1083 (N.D. Cal. 2012) (the loss of goodwill and ability
to control plaintiff's reputation is irreparable where
the plaintiff has made a significant investment of time in
establishing a reputation).
balance of equities strongly tips in favor of Plaintiff. As
noted above, Plaintiff's brand is suffering irreparable
harm due to Defendant's apparently sub-standard services.
Plaintiff is the undisputed owner of the trademarks and has
put significant effort into building its image associated
with the trademarks. Although Defendants will have to take
drastic efforts to remove the infringing material, this is
merely a consequence of the terminated agreement and does not
suggest an inequity on Defendant's part.
the injunction is in the public interest. Consumers are
currently being deceived into believing Defendants'
hotels are affiliated with Red Lion. As the negative reviews
demonstrate, the public is being harmed because they are
receiving a quality of service that is below what they expect
when visiting a Red Lion hotel. The very purpose of federal
and state trademark laws are the protection of consumers in
May 4, 2017 hearing, Defendant Ghazanfar Khan voiced no
objection to the entry of an injunction, explaining that they
were no longer using anything with the Red Lion brand.