Pensacola Motor Sales Inc. v. Eastern Shore Toyota, LLC
2012 U.S. App. LEXIS 12726
| 11th Cir. | 2012Background
- Esfahani, an Alabama car dealer, operates Eastern Shore Toyota and related entities; Vaughan, Hyundai’s marketing expert, proposed offensive and defensive internet strategies.
- Eastern Shore purchased thousands of domain names, including some infringing competitor trademarks, and created microsites to divert or mislead consumers.
- eBay warned Eastern Shore in 2009 that the domain name use could violate the Lanham Act and Anticybersquatting Consumer Protection Act; Eastern Shore surrendered the infringing domain names to GoDaddy.com.
- Bob Tyler Toyota sued Eastern Shore for fourteen domain-name registrations/uses alleging federal false advertising, unfair competition, and anticybersquatting, plus Florida claims; Eastern Shore raised a safe-harbor defense under 15 U.S.C. § 1125(d)(1)(B)(ii).
- At trial, the district court denied Bob Tyler’s summary-judgment motion and granted judgment on the antiphishing claim; only the anticybersquatting claim went to the jury.
- The jury found a violation of the ACPA but also found a safe-harbor belief; disputes over jury instructions and an admission under Fed. R. Civ. P. 36 were raised post-verdict and reviewed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court erred by denying summary judgment on appeal | Bob Tyler contends denial was improper after full trial | Eastern Shore argues appealability to summary judgment denial is improper post-trial | Not reviewable; post-trial appeals of denied summary judgment are barred |
| Whether equitable relief was properly denied for false advertising and unfair-competition claims | Bob Tyler sought injunctive relief based on likelihood of reoccurrence | Eastern Shore showed ceased conduct and lack of likelihood of re-registration | No abuse of discretion; equitable relief was unwarranted given cessation and evidence |
| Whether Eastern Shore could rely on the ACPA safe harbor defense and related jury instructions | Eastern Shore’s defense should be barred by bad-faith evidence | Safe harbor allowed where belief was reasonable and grounded in law; jury instructions appropriate | Safe harbor defense properly admitted and submitted to the jury; not error |
| Whether the verdict was inconsistent on the ACPA claim | Jury found violation but also safe-harbor protection | Inconsistency should have been challenged timely | Verdict inconsistency waived due to failure to object before discharge |
| Whether the district court erred in denying Bob Tyler’s renewed JMOL and new-trial motions | Evidence supported JMOL and great-weight reversal | Evidence supported the jury’s verdict and weight of the evidence | No reversible error; JMOL and new-trial denials affirmed |
Key Cases Cited
- United States v. W.T. Grant Co., 345 U.S. 629 (U.S. 1953) (equitable discretion after cessation requires a strong showing of abuse)
- Southern Grouts & Mortars, Inc. v. 3M Co., 575 F.3d 1235 (11th Cir. 2009) (bad-faith intent not determined by a numeric factor count)
- Virtual Works, Inc. v. Volkswagen of Am., Inc., 238 F.3d 264 (4th Cir. 2001) (no strict tipping-point of factors for safe harbor)
- Lahoti v. VeriCheck, Inc., 586 F.3d 1190 (9th Cir. 2009) (examples of bad-faith cybersquatting beyond safe harbor)
- Coca-Cola Co. v. Purdy, 382 F.3d 774 (8th Cir. 2004) (continued conduct after warnings undermines safe harbor)
- Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en banc endorsement for prior circuit decisions)