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Select Auto Imports Inc. v. Yates Select Auto Sales, LLC.

United States District Court, E.D. Virginia, Alexandria Division

July 7, 2016

SELECT AUTO IMPORTS INCORPORATED, Plaintiff,
v.
YATES SELECT AUTO SALES, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          GERALD BRUCE LEE UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the two-day non-jury trial of Select Auto Imports, Incorporated's ("Select Auto Imports") claims against Defendants Yates Select Auto Sales, LLC and Jeffrey Lee Yates (collectively, "Yates Select Auto Sales") seeking both injunctive relief and monetary damages for trademark infringement and unfair competition under §§ 32 and 43(a) of the Federal Trademark Act (the "Lanham Act"), Virginia Code § 59.1-92.12 (the "Virginia Trademark and Service Mark Act"), Virginia common law, and for trademark cyberpiracy under Section 43(d) of the Lanham Act.

         On November 16, 2015, the Court entered a Stipulation dismissing Defendant Saleiman Azizi and dismissing the claim for monetary damages (Doc. 31). Plaintiff withdrew its claim for trademark cyberpiracy (Count III) in its Opposition to Motion for Summary Judgement (Doc. 54). On January 6, 2016, the Court entered a Stipulation dismissing with prejudice Plaintiffs claims for attorney's fees (Doc. 71). The sole remaining relief sought by Select Auto Imports is a claim for injunctive relief with respect to claims for federal trademark infringement in violation of § 32 of the Lanham Act, 15 U.S.C. § 1114 (Count I), unfair competition and false designation of origin in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (Count II), trademark infringement in violation of the Virginia Trademark and Service Mark Act, Virginia Code § 59.1-92.12 (Count IV), and unfair competition and trademark infringement under common law (Count V).

         Yates Select Auto Sales does not contest that (1) Select Auto Imports possesses the SELECT AUTO IMPORTS mark, (2) Yates Select Auto Sales used its YATES SELECT AUTO SALES mark, (3) Yates Select Auto Sales's use of its mark occurred "in commerce, " or (4) Yates Select Auto Sales used the mark "in connection with the sale, offering for sale, distribution, or advertising" of goods or services. Therefore, the only issue before the Court is whether Select Auto Imports has established that Yates Select Auto Sales used its mark in a manner likely to confuse consumers.

         The Court finds that all nine factors in the likelihood of confusion analysis weigh in favor of Plaintiff Select Auto Imports or are neutral to the analysis. Therefore, the Court holds that Defendant Yates Select Auto Sales's use of a confusingly similar mark in connection with similar goods and services is likely to cause confusion among consumers as to the source of Yates Select Auto Sales's goods and services. Thus, the Court holds that Plaintiff Select Auto Imports is entitled to a permanent injunction, requiring Yates Select Auto Sales to cease and desist all use of the YATES SELECT AUTO SALES mark and any other mark confusingly similar to SELECT AUTO IMPORTS.

         I. STANDARD OF REVIEW

         In a non-jury case, the court must make specific findings of fact and separately state its conclusions of law. Fed.R.Civ.P. 52(a)(1). The trial judge has the function of finding the facts, weighing the evidence, and choosing from among conflicting inferences and conclusions those which he considers most reasonable. Perm-Texas Corp. v. Morse, 242 F.2d 243, 247 (7th Cir. 1957) (citation and internal quotation marks omitted). The trial judge has the inherent right to disregard testimony of any witness when satisfied that the witness is not telling the truth, or the testimony is inherently improbable due to inaccuracy, uncertainty, interest, or bias. Id. (citation and internal quotation marks omitted); see Columbus-Am. Discovery Grp. v. Ail. Mut. Ins. Co., 56 F.3d 556, 567 (4th Cir. 1995) (internal quotation omitted) (stating that the fact finder is in a better position to make judgments about the reliability of some forms of evidence, including evaluation of the credibility of witnesses). It is the duty of the trial judge sitting without a jury to appraise the testimony and demeanor of witnesses. See Burgess v. Farrell Lines, Inc., 335 F.2d 885, 889 (4th Cir. 1964).

         To satisfy the demands of Rule 52(a), a trial court must do more than announce statements of ultimate fact. United States ex rel. Belcon, Inc. v. Sherman Constr. Co., 800 F.2d 1321, 1324 (4th Cir. 1986) (citation omitted). The court must support its rulings by spelling out the subordinate facts on which it relies. Id.

         The language of Rule 52 has been construed,

not to require a court to make findings on all facts presented or to make detailed evidentiary findings; if the findings are sufficient to support the ultimate conclusion of the court they are sufficient. Nor is it necessary that the trial court make findings asserting the negative of each issue of fact raised. It is sufficient if the special affirmative facts found by the court, construed as a whole, negative each rejected contention. The ultimate test as to the adequacy of the findings will always be whether they are sufficiently comprehensive and pertinent to the issues to provide a basis for decision and whether they are supported by the evidence.

Darter v. Greenville Cmty. Hotel Corp., 301 F.2d 70, 75 (4th Cir. 1962). This rule does not require that the trial court set out findings on the myriad of factual questions that arise in a case. Golf City, Inc. v. Wilson Sporting Goods, 555 F.2d 426, 433 (5th Cir. 1977). The sufficiency of the trial court's findings depends upon the particular facts of each individual case, and no general rule can govern. Darter, 301 F.2d at 75.

         II. FINDINGS OF FACT

         The following are findings of fact made by the Court after having had an opportunity to observe the witnesses, consider the evidence, and weigh the demeanor and credibility of the witnesses.

         A. The Parties

         Plaintiff Select Auto Imports is a Virginia corporation, located at 5630 S. Van Dorn Street, Alexandria, Virginia 22310. Plaintiff operates a used car dealership on this property (Doc. 88 at ¶1).

         Defendant Yates Select Auto Sales LLC is a limited liability company organized under the laws of Virginia, located at 3030 Duke Street, Alexandria, Virginia 22314 (Doc. 88 at ¶ 6). Defendants Yates Select Auto Sales and Mr. Yates operate a used car dealership on the 3030 Duke Street property, less than four miles away from Select Auto Imports's dealership. Defendant Jeffrey Lee Yates is the organizer of Yates Select Auto Sales, LLC (Doc. 88 at ¶ 7).

         B. Select Auto Imports and its Valuable SELECT AUTO IMPORTS Mark

         Select Auto Imports has substantially and continuously used the mark SELECT AUTO IMPORTS in connection with its used car dealership located at 5630 S. Van Dorn Street since at least 1987 (PL's Ex. 1, 6). Before Select Auto Imports adopted the SELECT AUTO IMPORTS mark, it asked an attorney to investigate whether there were any active used car dealerships in the Washington, D.C. metropolitan area using the term "Select" in their names (Trial Tr., 32, Feb. 22, 2016, a.m. session). The investigation uncovered no such businesses. Id.

         Select Auto Imports owns the valid active federal trademark Registration No. 2, 567, 206 on the Principal Register for the mark SELECT AUTO IMPORTS covering an "automobile dealership" (registered on May 7, 2002), depicted in the image below:

         (Image Omitted)

         See Pl.'s Ex. at 1. Registration No. 2, 567, 206 includes a disclaimer for the phrase "Auto Imports." Id. Registration No. 2, 567, 206 became incontestable on March 19, 2013 (Doc. 11-B).

         Since its inception, Select Auto Imports has promoted its used car dealership under the SELECT AUTO IMPORTS mark, including more recently on its website at www.selectautoimports.com (Doc. 88 at ¶ 5). The logo in the homepage banner on Select Auto Imports's website is a variation of the above logo and appears as follows:

         (Image Omitted)

         Id. Select Auto Imports sells approximately fifty cars per month (Trial Tr., 78, Feb. 23, 2016).

         C. Yates Select Auto Sales and its YATES SELECT AUTO SALES Mark

         In or around October 2014, Defendant Jeffrey Lee Yates acquired the used car dealership at 3030 Duke Street, Alexandria, Virginia 22314, known at the time as Alexandria Motors, as well as Alexandria Motors's inventory (Doc. 88 at ¶ 9). Mr. Yates chose to begin the name of his new business with the word "Yates" because "Yates" is a family house mark that has been used since 1962 in connection with numerous automotive and other companies in the Alexandria area (Trial Tr., 77, Feb. 22, 2016, p.m. session). The Yates name and family house mark is currently or has been used previously by Mr. Yates or by Mr. Yates' family members in connection with at least the following businesses: Yates Automotive, Yates Car Care, Yates Car Wash & Detail Center, Yates Kingstowne Car Wash & Convenience, Yates Express Lube, Yates Auto Parts, Yates Old Town Auto Body, Yates Automotive Service Garage, Yates Corner, Yates Dry Cleaning & Laundry Services, Yates Pizza Palace, and Yates Real Estate (Doc. 88 at ¶12).

         Before October 2014, neither Mr. Yates nor anyone else in the Yates family was in the business of selling cars (Trial Tr., 43-44, Feb. 22, 2016, p.m. session). On October 10, 2014, Mr. Yates registered the name Yates Select Auto Sales, LLC with the Commonwealth of Virginia State Corporation Commission (Doc. 88 at ¶ 11). Mr. Yates has not sought registration of the YATES SELECT AUTO SALES mark with the United States Patent and Trademark Office ("USPTO") (Trial Tr., 56, Feb. 22, 2016, p.m. session).

         Mr. Yates testified that he chose to use the word "Select" because it would indicate to customers that the automobiles being sold were "selected" by Yates trained staff, and since Yates is a known professional in the automotive industry, customers would see quality associated with the selected vehicles (Trial Tr., 68-69, Feb. 22, 2016, p.m. session). Mr. Yates testified that he did not choose the name Yates Select Auto Sales in an effort to copy or imitate the Select Auto Imports name. Id. at 70. Mr. Yates had knowledge of Select Auto Imports, and his personal impression of Select Auto Imports was favorable based on his experience of purchasing a vehicle from Select Auto Imports many years ago. Id. at 70-71.

         In January 2014, Maria Kyriacou of Commercial Art, L.L.C. drafted a series of logo concepts for potential use by Yates Select Auto Sales at the direction of Mr. Yates, and Mr. Yates requested that Ms. Kyriacou create a logo similar to various other Yates family logos (Def s Ex. 3(b)-(j)). The logos are in fact very similar to other logos used in Yates family businesses (Def s Ex. 5).

         Ms. Kyriacou drafted similar logos for potential use in connection with some of Mr. Yates' other businesses, including Yates Select Real Estate, Yates Car Wash Detail Center, Yates Business Enterprises, and Yates Automotive and Detail Center (Def s Ex. 3(a), (k)). Yates Select Auto Sales uses the same or similar logos on hats, shirts, stationary, and on the web (Def s Ex. 4). "Yates Select" is the dominant element of Yates Select Auto Sales (Doc. 15 at ¶ 19).

         On February 3, 2015, before Yates Select Auto Sales began using the YATES SELECT AUTO SALES mark in commerce, Dunner Law PLLC, acting on behalf of Select Auto Imports, sent Yates Select Auto Sales a cease and desist letter advising that its YATES SELECT AUTO SALES mark infringes the SELECT AUTO IMPORTS mark (Trial Tr., 10-11, Feb. 22, 2016, p.m. session). Yates Select Auto Sales failed to heed Select Auto Imports's warning and began using the YATES SELECT AUTO SALES mark in connection with the sale of used automobiles similar to those sold by Select Auto Imports in late February 2015. Id. at 74.

         On February 26, 2015, Mr. Azizi, who by this time had become the general manager of Yates Select Auto Sales, registered the domain name address www.yatesselectautosales.com (Doc. 88 at ¶ 16). That same day, Mr. Azizi asked AutoRevo, the website administrator, to move Yates Select Auto Sales's website to this new domain address and to change the name of the business on the website from "Alexandria Motors" to "Yates Select Auto Sales" with the simple instruction to make the new name "fit nicely" in the banner. Id. at ¶ 17; Def s Ex. 6.

         Prior to the name change from Alexandria Motors to Yates Select Auto Sales, the homepage banner on the Alexandria Motors website appeared as follows:

         (Image Omitted)

         Doc. 88 at ¶ 18. After this change in name, from around or on March 2, 2015 until October 27, 2105, the logo on the www.yatesselectautosales.com website appeared as follows:[1]

         Image Omitted.

         Id. at ¶ 19. Mr. Yates had not seen this banner before his deposition in October, 2015 (Trial Tr., 73, Feb. 22, 2016, p.m. session). When he saw the banner, he did not like it and instructed that the banner be removed. Id. The new banner was created by Auto Revo, the website host, with the instruction to remove the "A" from the old banner, and "make it fit nicely" (Def s Ex. 6). Yates Select Auto Sales has now withdrawn this homepage banner. (Trial Tr., 73, Feb. 22, 2016, p.m. session).

         Shortly after the name on the website had been changed, the dealership located at 3030 Duke Street changed its signage from Alexandria Motors to Yates Select Auto Sales (Doc. 88 at ¶ 19). Over the following weeks, Select Auto Imports's lawyers had telephone conversations with Mr. Azizi on March 4, 11, and 16, 2015 and with Mr. Yates on March 16, 2015 (Trial Tr., 12, Feb. 22, 2016, p.m. session). On March 20, 2105, Select Auto Imports's lawyers sent a second letter to Mr. Yates and Mr. Azizi, but did not receive any response (PL's Ex. 21). On May 28, 2015, Select Auto Imports filed the complaint in the instant lawsuit against Yates Select Auto Sales, alleging trademark infringement and unfair competition, among other claims (Doc.1).

         Yates Select Auto Sales advertises primarily online and by word of mouth, does not advertise via print media, on the radio, or on the television, and does not have physical signs and advertisements in places other than at its car lot (Trial Tr., 103, Feb. 22, 2016, p.m. session). Yates Select Auto Sales sells approximately nine cars per month. Id. at 112; PL's Ex. 41.

         D. The Likelihood of Confusion Factors

         The Court's findings of fact with respect to the nine factors used in this Circuit to assess likelihood of confusion, George & Co., LLC v. Imagination Entm 't Ltd., 575 F.3d 383, 393 (4th Cir. 2009), are as follows:

         1. The Strength of the SELECT AUTO IMPORTS Mark

         The USPTO registered the SELECT AUTO IMPORTS mark in 2002 without requiring proof of secondary meaning (PL's Ex. 1). The UPSTO has registered four other trademarks which include "select" in the name (PL's Ex. 99-102). Select Auto Imports has been operating for nearly three decades, during which time it has pursued other used car dealerships that have sought to use the term "Select" in the Washington, D.C. metropolitan area (Trial Tr., 73, Feb. 22, 2016, a.m. session).

         Select Auto Imports has spent more than $6 million on advertising from 2005-2014, including advertising through print, radio, TV, online, and other means such as the scoreboard at the Verizon Center in Washington, D.C. (PL's Ex. 62, 66, 70). Select Auto Imports has generated over $150 million in revenues in the past five years (Trial Tr., 46, Feb. 22, 2016, a.m. session).

         As of the date of trial, Select Auto Imports's Registration No. 2, 567, 206 was the only active federal trademark registration for a mark containing the terms "Select" and "Auto" with a connection to the sale of used cars (Trial Tr., 19-20, Feb. 22, 2016, p.m. session). Among the currently active businesses in Virginia, which promote their products via the internet, are "Virginia Select Auto, " physically located in Amherst, Virginia and operating in Charlottesville, Richmond, and Roanoke with the knowledge and consent of Select Auto Imports (Def s Ex. 13(i), 15). The Court notes that these businesses are not located within Plaintiffs geographic market. According to Select Auto Imports, Select Auto Imports and Yates Select Auto Sales are the only car dealerships operating in the Washington, D.C. metropolitan area whose names contain both the terms "Select" and "Auto."

         2.The Similarity of the Marks

         Select Auto Imports uses the SELECT AUTO IMPORTS mark as its primary trademark. Yates Select Auto Sales uses the YATES SELECT AUTO SALES mark as its primary trademark (Doc. 88 at ¶¶ 20-21).

         Select Auto Imports sometimes refers to itself as "Select" or "Select Auto" in advertisements, and Select Auto Imports regularly emphasizes the word "Select" in advertisements, including in the following slogan: "Be Selective...Select Quality, Select Value, Select Auto Imports" (PL's Ex. 71-73, 75). Consumers predictably refer to the business as both "Select" and "Select Auto" -not "Imports" (Trial Tr., 73, Feb. 22, 2016, p.m. ...


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