All Star Championship Racing, Inc. v. O'Reilly Automotive Stores, Inc.
2013 U.S. Dist. LEXIS 55218
| C.D. Ill. | 2013Background
- Contract dispute focused on plaintiff’s use of defendant’s Marks in sponsorship-related materials; five counterclaims by defendant: trademark infringement, false designation of origin, Illinois UDTPA, Illinois CFBPA, and defamation; disputes over whether there was an implied license and whether post-termination uses were counterfeit; some agreements (2007–2009) lacked express license terms, leading to implied license analysis; termination date contested, with July 16, 2011 identified as a key cut-off for implied license; actions and website materials post-termination raised issues about infringement and counterfeit-mark liability; court granted in part and denied in part the motion for summary judgment as to counts 1–4 and denied count 5; case was removed from state court and involved Lanham Act claims and related state law claims; jurisdiction included federal question, supplemental, and diversity grounds; procedural history includes prior R&R and dismissal of main contract claim under Statute of Frauds; magistrate judge proceedings led to the present ruling and referral for mediation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Trademark infringement scope and timeframe | Plaintiff maintains no improper use; any appearances were inadvertent/without intent to profit | Defendant contends continued post-termination use violated license or created implied license issues | Partial summary judgment: infringement held for July 16, 2011–Sept 30, 2011; pre- and post-periods analyzed for license status; issues remain for certain periods. |
| False designation of origin (false endorsement) | Claims align with trademark infringement; similar elements apply | Same evidence supports false endorsement; post-termination use misleads as to sponsorship | Granted for July 16, 2011–Sept 30, 2011; denied for other periods. |
| Illinois Uniform Deceptive Trade Practices Act | UDTPA should mirror federal trademark infringement findings | Claims coextensive with infringement; contingent on likelihood of confusion | Granted for events July 16, 2011–Sept 30, 2011; denied for other periods. |
| Illinois Consumer Fraud and Deceptive Business Practices Act | CFDBPA claim coextensive with UDTPA/trademark arguments | Same underlying conduct as UDTPA | Granted on same terms as Count 3 (July 16, 2011–Sept 30, 2011). |
| Defamation | Publication harmed defendant’s reputation; statements about unpaid invoice reflect business mismanagement | Statements were not per se defamatory and could be innocently construed | Denied for defamation; court applies innocent construction and allows claim to proceed as defamation per quod. |
Key Cases Cited
- McGraw-Edison Co. v. Walt Disney Prods., 787 F.2d 1163 (7th Cir. 1986) (likelihood of confusion and protectable mark elements under Lanham Act)
- U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185 (6th Cir. 1997) (holdover franchisee/licensing issues and counterfeiting standards)
- Idaho Potato Comm’n v. G & T Terminal Packaging, Inc., 425 F.3d 708 (9th Cir. 2005) (counterfeit mark as to certification marks; holdover licensees risks)
- Gen. Electric Co. v. Speicher, 877 F.2d 531 (7th Cir. 1989) (use of marks by non-authorized entities and counterfeit liability)
- Century 21 Real Estate, LLC v. Destiny Real Estate Properties, 2011 WL 6736060 (N.D. Ind. 2011) (discussion of counterfeit liability in franchise-like sponsorship context ( WL only))
- Doeblers’ Pennsylvania Hybrids, Inc. v. Doebler, 442 F.3d 812 (3d Cir. 2006) (implied trademark license; naked licensing and quality control)
- De Forest Radio Tel. & Tel. Co. v. United States, 273 U.S. 236 (1927) (early definition of license implied from conduct)
- Church of Scientology Int’l v. Elmira Mission of the Church of Scientology, 794 F.2d 38 (2d Cir. 1986) (endorsement/confusion analysis in licensing contexts)