I. INTRODUCTION
Plaintiff General Motors Corporation (“GM”) brought this action against defendant Autovation Technologies, Inc. (“Defendant”) to enjoin Defendant from advertising and selling foot pedals bearing counterfeits of the world-famous GM trademarks. In this lawsuit, GM alleges claims for federal trademark counterfeiting and infringement, federal trademark dilution, and false designation of origin or sponsorship under Sections 32(1), 43(c), and 43(a) of the United States Trademark Act of 1946, as amended (the “Lanham Act”), 15 U.S.C. §§ 1114(1), 1125(c), and 1125(a), and trademark infringement under Michigan common law.
The parties stipulate to the following findings of fact and conclusions of law, and consent to entry of a permanent injunction as set forth below. Accordingly, the Court enters the following:
II. FINDINGS OF FACT
Plaintiff GM is a Delaware corporation with its principal place of business in Detroit, Michigan.
Defendant Autovation Technologies, Inc. is a South Carolina corporation with its principal place of business in Charleston, South Carolina.
Defendant advertises and sells foot pedals that bear counterfeits of the GM Trademarks as set forth in the following side-by-side comparison of the counterfeit pedals (taken from Defendant’s website at www.autovation.net) and GM’s own Trademarks:
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For many years, GM has used a number of famous, registered trademarks in connection with GM’s world-famous and high quality automobile products and services. GM has obtained several trademark registrations from the United States Patent and Trademark Office for these trademarks, including, but not limited to, the CORVETTE FLAG LOGO®, U.S. Registration Nos.2683719, 2750257, 2654528, 2242877, 2232346, and 2086434; the trademark CORVETTE®, U.S. Registration Nos. 0579485, 2463898, 2314485, 2311215, 2144177, 2105243, 1792602, 1495033, 1494171, 1494980, and 1467522; the Z06 LOGO®, US. Registration No. 2538434; the trademark Z06®, US. Registration No. 2485607; the trademark; ZR-1®, U.S. Registration No. 2654525, the trademark FIERO®, U.S. Registration No. 1478600; the FIERO LOGO®, U.S. Registration No. 1478600; the trademark TAHOE®, U.S. Registration Nos. 2652036 and 1880529; the trademark SUBURBAN®, U.S. Registration Nos. 2652035 and 1490090; the trademark YUKON®, US. Registration No. 1598480; the trademark SIERRA®, U.S. Registration No. 1573202; the trademark SILVERADO®, U.S. Registration.No. 1039220; the trademark DENALI®, U.S. Registration No. 75056070; and the trademark Z28®, U.S. Registration No. 74586039 (hereinafter the “GM Trademarks”). These registrations are valid, unrevoked, subsisting, and incontes-tible, and constitute prima facie evidence of GM’s exclusive 'ownership of the GM Trademarks.
GM has used the GM Trademarks since long before the acts of Defendant described herein. GM has spent hundreds of millions of dollars and has expended significant effort in advertising, promoting, and developing the GM Trademarks throughout the United States and the world. As a result of such advertising and expenditures, GM has established considerable goodwill in the GM Trademarks. The GM Trademarks have become widely known and recognized throughout the world as symbols of high quality, reliable automobile products and services. The GM Trademarks are famous and distinctive, and have come to be associated by the consuming public exclusively with the products marketed, by GM. The GM Trademarks are invaluable assets of substantial and inestimable worth to GM.
Defendant is in the business of marketing and selling parts, products, and services for GM vehicles on the Internet and through more traditional channels, such as by catalog, telephone, and mail order. In
GM sells foot pedals and replacement pedals for GM vehicles that bear the GM Trademarks and/or are sold in packaging bearing the GM Trademarks. GM’s foot pedals compete directly with Defendant’s foot pedals. In addition, GM and GM’s authorized dealers advertise and sell genuine GM parts on official GM and GM Dealer websites on the Internet.
Defendant is hot in any way affiliated with, authorized, or sponsored by'GM and has no authority to use the GM Trademarks. Despite its lack of affiliation, authorization, or sponsorship, Defendant unlawfully uses.the GM Trademarks Marks as alleged above.
Defendant’s misappropriation of the GM Trademarks constitutes a misappropriation of the GM Trademarks and associated goodwill, and is likely to cause potential purchasers of Defendant’s products and services, as well as the public at large, to believe that Defendant’s services and products are affiliated with, authorized by, sponsored by, or endorsed by GM. In addition, Defendant’s wrongful use of the GM Trademarks dilutes, tarnishes, and whit-, ties away the distinctiveness of .the GM Trademarks.
III. CONCLUSIONS OF LAW
. The Court has subject matter jurisdiction of GM’s First, Second, and Third Claims for relief asserted in the Complaint under 28 U.S.C. §§ 1331 and 1338(a), as such claims for relief are brought under federal trademark laws, specifically sections of the Lanham Act, 15 U.S.C. § 1051 et. seq. This Court has supplemental subject matter jurisdiction of GM’s Fourth Claim for relief under 28 U.S.C. § 1367. Venue is proper in this District under 28 U.S.C. § 1391(b)(1) & (2).
This lawsuit is closely analogous to
Ford Motor Co. v. Lloyd Design Corp.,
In this lawsuit, GM’s success on its trademark counterfeiting and infringement claim, and on GM’s false designation/unfair competition claim, turns on its ability to show that Defendant’s use of counterfeits of the GM Trademarks on its pedals is likely to cause confusion as to source, sponsorship, affiliation, or endorsement. Under GM’s claim for federal counterfeiting and trademark infringement, likelihood of confusion is the central element.
See
15 U.S.C. § 1114;
Two Pesos, Inc. v. Taco Cabana, Inc.,
A. Defendant’s Use of Precise Counterfeits of the GM Trademarks on Directly Competing Goods Gives Rise to a Presumption of a Likelihood of Confusion.
In many cases, a likelihood of confusion can be established only by evaluating the degree of similarity between two distinct marks in light of a multi-factored inquiry into the extent of competition, overlap in marketing channels, characteristics of potential purchasers, etc.
(e.g.,
the use of the mark “Delta” by Delta Airlines and Delta Faucets). However, such multifactored balancing is unnecessary in cases like this one where the defendant has misappropriated precise counterfeits of the plaintiffs trademarks on goods that compete with the trademark holder’s own goods. As the Sixth Circuit has noted, in this latter set of cases, “a likelihood of confusion is presumed when a defendant intentionally copies a trademark design ‘with the intent to derive a benefit from the reputation of another.’ ”
Ford Motor Co.
v.
Lloyd,
The Ninth Circuit has explained the difference in the two approaches as follows:
When the goods produced by the alleged infringer compete for sales with those of the trademark owner, infringement usually will be found if the marks are sufficiently similar that confusion can be expected. When the goods are related, but not competitive, several other factors are added to the calculus.
AMF, Inc. v. Sleekcraft Boats,
In its Verified Complaint, GM has established that Defendant uses precise counterfeits of the GM Trademarks on pedals that compete directly with GM’s own.genuine pedals. Indeed, the Court need look no further than the marks themselves to determine that Defendant has gone out of its way to misappropriate precise counterfeits of the GM Trademarks. See Verified Complaint ¶ 1.
B. Even Without the Presumption of Confusion, the Same Result is Dictated by Application of the Factors for Determining Likelihood of Confusion.
Although an application of the traditional factors for determining likelihood of confusion is unnecessary in this case, the analysis nevertheless confirms that consumer confusion is likely. Where likelihood of confusion is not presumed, the following factors are considered:
1. strength of the senior mark; 2. relatedness of the goods or services; 3. similarity of the marks; 4. evidence of actual confusion; 5. marketing channels used; 6. likely degree of purchaser care;7. the intent of defendant in selecting the mark; and 8. likelihood of expansion of the product lines.
Lloyd,
1. The GM Trademarks are Strong.
Similar to Judge Robert’s ruling that the numerous Ford trademarks (such as FORD®, JAGUAR®, ASTON MARTIN®, LINCOLN® MERCURY®, MUSTANG®, BRONCO®, TAURUS®, WINDSTAR®, EXCURSION®, EXPEDITION®, NAVIGATOR®, MOUNTAINEER®, THUNDERBIRD®, F-150®, F-250®, F-350®, etc.) are strong marks,
Lloyd,
2. The Parties’ Goods-Pedals-Are Related.
There is, no dispute that both parties in this case make and sell pedals that compete directly. Verified Complaint ¶ 11. Thus, this factor weighs in GM’s favor.
3. Defendant’s Marks Are Identical to the GM Trademarks.
The “similarity-of-the-marks” factor was devised by courts because many infringement cases involve the use of a mark that is not identical to, but is alleged to be confusingly similar to, the plaintiffs mark.' Unlike those cases, based upon the side-by-side comparison set forth above, Defendant uses the GM Trademarks in the identical manner that GM uses the GM Trademarks — i.e., the Defendant uses counterfeits of the GM Trademarks. Thus, this factor weights in GM’s favor.
4. Evidence Of Actual Confusion Is Not Necessary.
Evidence of actual confusion is not required to make out an infringement claim.
Frisch’s Restaurants, Inc. v. Shoney’s Inc.,
5. Defendant Uses Similar Marketing Channels.
As GM and its authorized dealers increase their sale of genuine GM parts on their websites on the Internet, GM’s use of the Internet will expand. GM and GM’s authorized dealers market their parts and products on the Internet. Verified Complaint ¶ 11. Thus, Defendant and GM use similar marketing channels.
6. Purchasers Do Not Exercise Much Care.
Defendant sells its pedals for approximately $55-65. Verified Complaint ¶ 10.
7. Defendant Intends to Profit from GM’s Goodwill.
The side-by-side comparison set forth above demonstrates that Defendant intentionally copied not o'nly GM’s Trademarks, but also the design and logos of such GM Trademarks. As Judge Roberts noted, “[a] likelihood of confusion' is presumed when a trademark design is intentionally copied.”
Lloyd,
8. Likelihood of Expansion of Product Lines.
In cases where the parties’ products are not in direct competition, courts may consider whether either party may expand its product line into an area in which the other party operates. In this case, the parties are already in direct competition in the same market. Accordingly, this factor must be weighed heavily in favor of GM.
C. Defendant Dilutes Plaintiffs’ Trademarks
The Federal Trademark Dilution Act (FTDA) defines the term “dilution” to mean “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception.” 15 U.S.C. § 1127 (emphasis added). “For a plaintiff to succeed on a federal claim of dilution ‘(1) the senior mark must be famous; (2) it must be distinctive; (3) the junior use must be a commercial use in commerce; (4) it must begin after the senior mark has become famous; and (5) it must cause dilution of the distinctive quality of the senior mark.’ ”
Kellogg Co. v. Exxon Corp.,
GM’s dilution claim easily succeeds under this standard. As Judge Roberts found in
Lloyd,
“the general public recognizes” trademarks such as those at issue in this lawsuit, and such marks “are sufficiently famous. And, it is otherwise undisputed that Defendant began using [GM’s] marks after they became famous. Therefore, [GM has] satisfied the first and fourth element necessary to prove an FTDA claim.”
As the Supreme Court recently clarified, the FTDA “requires a showing of actual dilution, rather than a likelihood of dilution,” but “direct evidence of dilution such as consumer surveys” is not “necessary” where “actual dilution can reliably be proven through circumstantial evidence,” such as' “where the junior and senior marks are
The GM Trademarks are among the most famous and world-renowned marks. GM has spent hundreds of millions of dollars and has expended significant effort in advertising, promoting, and developing the GM Trademarks throughout the United States and the world. As a result of such advertising and expenditures, GM has established considerable goodwill in the GM Trademarks. The GM Trademarks have become widely known and recognized throughout the world as symbols of high quality, reliable automobile products and services. Verified 'Complaint at ¶ 9. Quite simply, the GM Trademarks are the proto-typically “famous” marks that Congress had in mind when it expanded federal trademark protection to encompass protection from dilution. See
Michael Caruso & Co., Inc. v. Estefan Enterprises, Inc.,
Nor can there be any dispute that Defendant is making commercial use of the GM Trademarks after those marks became famous or that Defendant’s use of counterfeits of the marks presents a likelihood of diluting the distinctive value of those marks. As one court has stated: “The purpose of the [dilution] law is ‘to protect famous trademarks from subsequent uses that blur the distinctiveness of the mark or tarnish or disparage it, even in the absence of a likelihood of confusion..’ ”
Genovese Drug Stores, Inc. v. TGC Stores, Inc.,
The theory of dilution by blurring is that if one small user can blur the sharp focus of the famous mark to uniquely signify one source, then another and another small user can and will do so. Like being stung by a hundred bees, significant injury is caused by the cumulative effect, not by just one. ... This is consistent with the classic view that the injury caused by dilution is the gradual diminution or whittling away of the value of the famous mark by blurring uses by others. It is also consistent with the rule in the likelihood of confusion cases that even a small infringer will not be permitted to “nibble away” at the plaintiffs reputation and goodwill.
4 McCarthy § 24-94.
• Defendant’s use of the GM Trademarks clearly “dilutes” those marks in the sense of lessening their capacity to identify only products authorized by, sponsored by, or somehow affiliated with GM. Thus, GM is also entitled to judgment on its dilution claims.
JUDGMENT AND PERMANENT INJUNCTION
Based on the foregoing, Defendant, its owner, shareholders, officers, directors, employees, and successors, and all persons in active concert or participation with any of them, shall be and are hereby ordered and permanently enjoined and restrained as set forth below. WHEREFORE, IT IS HEREBY ORDERED THAT:
A. Defendant and its owners, shareholders, officers, directors, employees, and successors, and all persons acting in concert or in participation with any of them, are enjoined from:
(1) imitating, copying, or making unauthorized use of any of the GM Trademarks or trade dress;
(2) importing, manufacturing, producing, distributing, circulating, selling, offering for sale, advertising, promoting or displaying any service or product using any simulation, reproduction, counterfeit, copy, or colorable imitation of any or all of the GM Trademarks or trade dress;
(3) using any simulation, reproduction, counterfeit, copy or colorable imitation of the GM Trademarks or trade dress in connection with the promotion, advertisement, display, sale, offering for sale, manufacture, production, circulation or distribution of any service or product;
(4) using any false designation of origin or false description including, without limitation, any letters or symbols constituting the GM Trademarks or trade dress, or performing any act, which can, or is likely to, lead members of the trade or public to believe that any service or product manufactured, distributed or sold by Defendant is in any manner associated or connected with GM or the GM Trademarks, or is sold, manufactured, licensed, sponsored, approved or authorized by GM;
(5) transferring, consigning, selling, shipping or otherwise moving any goods, packaging or other materials in Defendant’s possession, custody or control bearing a design or mark substantially identical to any or all of the GM Trademarks or trade dress;
(6) engaging in any other activity constituting unfair competition with GM with respect to the GM Trademarks or trade dress, or constituting an infringement of any or all of the GM Trademarks, or of GM’s rights in, or to use or exploit, any or all of the GM Trademarks or trade dress; and
1. (7) instructing, assisting, aiding or abetting any other person or business entity in engaging in or performing any of the activities referred to in subparagraphs (1) through (6) above.
B. Defendant and its owners, shareholders, officers, directors, employees, and successors, and all persons acting in concert or in participation with any of them, are ordered to, within thirty (30) days after the entry of this Final Judgment and Permanent Injunction, deliver to GM for destruction all products, parts, labels, tags, signs, prints, packages, videos, and advertisements in their possession or under their control, bearing or using any or all of the GM Trademarks, or any simulation, reproduction, counterfeit, copy or colorable imitation thereof, and all plates, molds, matrices and other means of making the same, pursuant to 15 U.S.C. § 1118.
C. Defendant and its owners, shareholders, officers, directors, employees, and successors are ordered to serve upon GM’s counsel within thirty (30) days after entry of this Final Judgment and Permanent Injunction, pursuant to 15 U.S.C. § 1116, a report in writing under oath, setting forth in detail the manner and form in which Defendants have complied with the above. In addition, Defendant is ordered to serve upon GM’s counsel within thirty (30) days after entry of this Final Judgment and Permanent Injunction a written accounting signed under oath by an officer of Defendant accounting for and detailing gross revenues received or to be received from all sales of products bearing any of the GM Trademarks or counterfeits of the GM Trademarks from January 1, 1999 through the date of the accounting. Defendant shall pay GM within five (5) days of such accounting twenty-five percent (25%) of the gross revenue received from the sale of all pedals bearing the GM Trademarks or
D. Defendant is ordered to permit GM, and/or auditors for GM, to audit and inspect the books and records of Defendant for a period of six months after entry of this Final Judgment and Permanent Injunction to determine the scope of Defendant’s compliance with this Final Judgment and Permanent injunction. Any information revealed during such audit or inspection shall not be disclosed except to those persons/entities necessary to address a purported violation of this Final Judgment and Permanent Injunction.
E. Each of the parties shall bear its own attorneys’ fees.and costs.
SO ORDERED AND ADJUDGED.