Ramada Inns, Inc. (Ramada Inns), is a franchisor that licenses franchisees to operate motor hotels using the Ramada Inns trademarks and service marks. In August, the Gadsden Motel Company (Gadsden), a partnership, purchased a motel in Attalla, Alabama, and entered into a franchise agreement with Ramada Inns to operate it as a Ramada Inns motor hotel. Five years later, the motel began receiving poor ratings from Ramada Inns inspectors, and Gadsden fell behind on its monthly franchise fee payments. Despite prodding from Ramada Inns, the motel never met the Ramada Inns operational standards again. One year later, Ramada Inns properly terminated the franchise agreement, citing quality deficiencies and Gadsden’s failure to pay past due franchise fees. The termination notice directed Gadsden to remove any materials or signs identifying the motel as a Ramada. Gadsden continued using Ramada Inns signage, trademarks, and service marks inside and outside the motel. In September, Ramada Inns sued Gadsden for trademark infringement. Who wins? Ramada Inns, Inc. v. Gadsden Motel Company, 804 F. 2d 1562, 1986 U. S. App. Lexis 34279 (United States Court of Appeals for the Eleventh Circuit)
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