Capital One Financial Corporation v. Capital One Auto Group 1 Inc. (New York)
2:19-cv-07201
E.D.N.YMar 4, 2022Background
- Plaintiff Capital One owns incontestable federally registered "Capital One" trademarks and operates auto-financing services including "Auto Navigator".
- Defendants (several corporate entities and Dimitrios Mestousis) used names and domain names (e.g., capitaloneautogroup.com, capitaloneautogroupnj.com) incorporating the Capital One mark to sell and finance used cars, purchasing inventory from the same auctions Capital One used.
- Capital One sent cease-and-desist letters in December 2018 and January 2019; Defendants did not respond and were properly served in this action but failed to appear or answer.
- Clerk entered defaults against all Defendants; Capital One moved for default judgment on Lanham Act trademark infringement, cybersquatting (ACPA), related state-law claims, and sought a permanent injunction plus statutory ACPA damages for two domain names.
- Magistrate Judge Reyes recommended granting default judgment for trademark infringement (Lanham Act and New York common law) and cybersquatting, dismissing the remaining claims as unnecessary, issuing a permanent injunction, and awarding $40,000 in statutory damages under the ACPA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Trademark infringement (Lanham Act and NY common law) | Capital One owns valid registrations and Defendants' use of Capital One + modifiers is likely to cause consumer confusion under the Polaroid factors | No defense; Defendants defaulted | Default judgment for Capital One; liability established for infringement |
| Cybersquatting (ACPA, 15 U.S.C. § 1125(d)) | Domain names are confusingly similar, marks were distinctive at registration, and Defendants acted in bad faith to divert customers | No defense; Defendants defaulted | Default judgment for Capital One; ACPA liability found |
| Permanent injunction | Irreparable harm from likely confusion, inadequate legal remedies, balance of hardships favors injunction, public interest served | No defense; Defendants defaulted | Permanent injunction enjoining use/registration of CAPITAL ONE and confusingly similar marks and related assistance granted |
| Statutory damages under ACPA | Seeks maximum $100,000 per domain ($200,000 total) as willful cybersquatting | No defense; Defendants defaulted | Court exercised discretion and awarded $40,000 in statutory damages in total |
| Remaining claims (dilution, unfair competition, NY GBL) | Also pleaded but relief duplicative of Lanham Act remedies | No defense | Recommended dismissal of remaining claims as unnecessary to relief awarded |
Key Cases Cited
- Tiffany & Co. v. Costco Wholesale Corp., 971 F.3d 74 (2d Cir. 2020) (standard for trademark infringement and likelihood of confusion)
- Polaroid Corp. v. Polarad Elec. Corp., 287 F.2d 492 (2d Cir. 1961) (sets nonexclusive factors for likelihood of confusion)
- City of N.Y. v. Mickalis Pawn Shop, LLC, 645 F.3d 114 (2d Cir. 2011) (two-step default judgment process)
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (default concedes well-pleaded allegations of liability)
- Sporty's Farm L.L.C. v. Sportsman's Mkt., Inc., 202 F.3d 489 (2d Cir. 2000) (incontestable registration establishes distinctiveness)
- eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (four-factor test for injunctive relief)
- Arrow Fastener Co. v. Stanley Works, 59 F.3d 384 (2d Cir. 1995) (reputational harm and product quality relevant to confusion analysis)