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Email service in infringement case was proper.

Byline: Virginia Lawyers Weekly

Where plaintiffs' complaint alleged that defendants used their trademarks without authorization to sell counterfeit versions of their products and plaintiffs properly served defendants by email pursuant to a court order, plaintiffs were entitled to default judgment on their claims that defendants violated Sections 32 and 43 of the Lanham Act.

Background

Plaintiffs Volvo Car Corporation and Volvo Trademark Holding AB are corporations organized under Swedish law with principal places of business in Gothenburg, Sweden. Volvo Car is a world-famous automobile manufacturer that sells Volvo automobiles, parts and accessories through a network of licensed Volvo car dealerships throughout the United States. Volvo is one of the most well-recognized brands in the world and has long been associated with automobile safety.

Volvo Car and Volvo Trademark hold a number of federally registered trademarks for automobiles, parts, accessories and a long list of related services and merchandise. Volvo Car incorporates these trademarks in the design of its vehicles, parts and accessories.

Defendants are individuals and business entities, based in China, who operate in a number of online marketplaces by selling counterfeit goods bearing Volvo trademarks at substantially lower prices than genuine Volvo Car products. They have gone to great lengths to conceal their identities, including the use of fictitious names and addresses. Many of their counterfeit goods were stamped with genuine Volvo Car product numbers and were intended to fit original Volvo Car automobiles.

Defendants facilitate their sales by designing internet stores that appear to be authorized online retailers, outlet stores or wholesalers. They also use plaintiffs' trademarks without authorization within the content, text and/or meta tags of their websites to attract various search engines looking for websites relevant to consumer searches for Volvo Car products.

On Aug. 17, 2018, plaintiff filed this complaint against defendants alleging various claims of trademark infringement. Due to the difficulty of ascertaining defendants' identities and physical addresses, the court allowed plaintiffs to effectuate service by email. Plaintiffs served the defendants by email on Oct. 17, 2018, and filed their notice of service two days later. On Dec. 3 2018, plaintiffs filed a motion for the entry of default judgment against defendants. A hearing was held on Dec. 14, 2018, and no one appeared on behalf of defendants.

Analysis

This court has subject matter jurisdiction over this action because it arises under federal law. This court also has specific personal jurisdiction over the defendants. Defendants sought to avail themselves of the privilege of conducting business in Virginia by operating commercial internet stores where Virginia residents could purchase their products, offering shipping to the state and accepting payment in U.S. dollars, and this action arises directly from defendant's unauthorized and unlicensed sales of counterfeit products targeting Virginia. In addition, the exercise of jurisdiction would be constitutionally reasonable based on this court's interest in the resolution of grievances of its citizens and businesses and the plaintiff's interest in obtaining convenient and effective relief. Notably, defendants would not be burdened by litigating in this court given that the majority of defendants did not even respond to plaintiff's complaint.

Plaintiffs have also properly effectuated service on all defendants remaining in the action by emailing the summons, complaint and court order allowing service by e-mail to defendants at the email addresses they use to conduct foreign business.

As the defendants have failed to answer or otherwise respond to the complaint, the well-pleaded allegations of fact therein are deemed to be admitted. These allegations are sufficient to establish plaintiff's entitlement to judgment.

Specifically, the allegations of fact are sufficient to show that defendants violated Section 32 of the Lanham Act. Plaintiffs have demonstrated that they are the owners of federally-registered trademarks that are incorporated in the design and marketing of their vehicles, parts, accessories and services. Plaintiffs have further demonstrated that defendants were selling counterfeits of their products without their consent. Finally, plaintiffs have established that defendants' unauthorized use of their trademarks is likely to cause confusion. Plaintiffs' trademarks are well-known and recognizable, defendants used exact replicas of their trademarks to sell their counterfeit products, the counterfeit products were intended to be used as a replacement for Volvo Car's actual products, and defendants intended to profit from the sale of their counterfeit products by offering them at a lower price than genuine Volvo Car products.

The allegations of fact in the complaint are likewise sufficient to demonstrate that defendants violated Section 43 of the Lanham Act by using a false designation to deceive customers about the origin, ownership, or sponsorship of the counterfeit products. In addition, plaintiffs have demonstrated that the use of this false designation is likely to damage plaintiffs' reputation and the goodwill of the Volvo Car brand.

Motion granted.

Volvo Car Corp. v. Unincorporated Associations, Case No. 1:18-cv-977, Feb. 5, 2019. EDVA at Alexandria (O'Grady). VLW 019-3-063. 29 pp.

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Title Annotation:Volvo Car Corp. v. Unincorporated Associations, U.S. District Court for the Eastern District of Virginia
Publication:Virginia Lawyers Weekly
Date:Mar 8, 2019
Words:813
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