Misuse of Audi Trademarks Leads To Injunction And Attorneys' Fees Award

Case: Audi AG v. D'Amato (11/27/06 - 6th Cir. No. 05-2359)


The One Sentence Summary: Injunctive relief and attorneys' fees were affirmed against a defendant who used Audi's trademarks on a website at audisport.com.


What They Were Fighting About: The district court granted summary judgment against defendant in favor of Audi on claims of trademark infringement, trademark dilution, false designation of origin and cyber-piracy in connection with defendant's operation of a website called audisport.com.

Sixth Circuit Holdings:

• The district court properly granted summary judgment on the trademark infringement claim due to defendant's use of the Audi mark and Audi logo.
• The fact that Audi had previously stopped using the trademark Audi Sport did not allow defendant to use that as his domain name, particularly where he was using replicas of the Audi trademarks on that site.
• With respect to actual confusion, the court noted that an experienced graphic designer had questioned whether defendant had the right to use the Audi trademarks. This indicated that a consumer could be confused as was the graphic designer.
• Because both plaintiff and defendant used the Internet for marketing goods bearing the Audi trademark, there was more likelihood of confusion.
• Confusion was also likely because consumers on the Internet were unlikely to employ much care in selecting the goods so that they would realize the source of the goods.
• The evidence that defendant had requested permission unsuccessfully from Volkswagen to market Audi merchandise on the website indicated that he intentionally used the plaintiff's trademarks.
• Mass e-mails from Audi of press releases did not constitute a contract allowing defendant to use the Audi marks.
• Defendant did not have the right to use the Audi marks even though an Audi dealer had worked with him in setting up the infringing website. The dealer did not have authority to grant permission to use the Audi marks.
• A disclaimer on the website stating that the page was not associated with Audi was not a defense. There would still be initial interest confusion by a consumer arriving at the site even if he later read the disclaimer. Moreover, the site incorrectly stated that there was a signed agreement with Audi allowing use of the site which negated that statement in the disclaimer.
• The panel rejected the claim that the site was non-commercial because it merely included links to other sites. Because defendant had sold advertising on the site and had provided links to other sites where merchandise could be purchased, there was commercial use of the trademarks.
• Defendant was properly found to have diluted the famous Audi trademark. The use of identical trademarks on the goods and services on the website satisfied the factor of showing dilution of the distinctive quality of the mark.
• The defendant also violated the Anti-Cyber Squatting Consumer Protection Act (ACPA). 15 U.S.C. §1125(d)(1)(A). Defendant did not succeed in showing that he had reasonable grounds to believe that he had authority to use the trademarks. The receipt of the press releases from Audi could not reasonably be interpreted as authority to use the trademarks.
• The district court properly granted injunctive relief against defendant from further use of the plaintiff's trademark.
• The district court properly awarded attorneys' fees to plaintiff under 15 U.S.C. § 1117 (a) upon finding that this was an exceptional case justifying an award of attorneys' fees. There was no need for Audi to show monetary damages. It prevailed by receiving injunctive relief. The infringement was malicious, fraudulent, willful or deliberate because there was a showing that defendant knew that permission was required to use the marks yet he proceeded without that permission. Moreover, defendant's alteration of the websites after receiving cease and desist letters did not absolve him of his wrong doing and prevent an award of attorneys' fees.