469 F.3d 534 (6th Cir. 2006), 05-2359, Audi AG v. D'Amato

Docket Nº:05-2359.
Citation:469 F.3d 534, 81 U.S.P.Q.2d 1108
Party Name:AUDI AG and Volkswagen of America, Inc., Plaintiffs-Appellees, v. Bob D'AMATO, d/b/a Quattro Enthusiasts, Defendant-Appellant.
Case Date:November 27, 2006
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 534

469 F.3d 534 (6th Cir. 2006)

81 U.S.P.Q.2d 1108

AUDI AG and Volkswagen of America, Inc., Plaintiffs-Appellees,

v.

Bob D'AMATO, d/b/a Quattro Enthusiasts, Defendant-Appellant.

No. 05-2359.

United States Court of Appeals, Sixth Circuit.

November 27, 2006

Argued: October 24, 2006

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ARGUED:

Damian G. Wasserbauer, INTELLECTUAL PROPERTY ADVISORS, LLC, Canton, Connecticut, for Appellant.

Gregory D. Phillips, HOWARD, PHILLIPS & ANDERSON, Salt Lake City, Utah, for Appellees.

ON BRIEF:

Damian G. Wasserbauer, INTELLECTUAL PROPERTY ADVISORS, LLC, Canton, Connecticut, for Appellant.

Gregory D. Phillips, Cody W. Zumwalt, HOWARD, PHILLIPS & ANDERSON, Salt Lake City, Utah, for Appellees.

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Before: MARTIN and COOK, Circuit Judges; BERTELSMAN, District Judge[*]

OPINION

BOYCE F. MARTIN, JR., Circuit Judge.

Defendant Bob D'Amato, who is unaffiliated with Audi, used the domain name www.audisport.com to sell goods and merchandise displaying Audi's name and trademarks. Audi claims that D'Amato's website infringes and dilutes its world famous trademarks "AUDI," the "AUDI FOUR RING LOGO," and "QUATTRO," as well as the distinctive trade dress of Audi automobiles. Audi also claims that D'Amato violated the Anti Cybersquatting Consumer Protection Act. The district court granted summary judgment and injunctive relief to Audi on all claims. The district court also granted Audi attorneys' fees, but refused to award Audi statutory damages under 15 U.S.C. § 1117(a). D'Amato appeals the grant of summary judgment and injunctive relief and award of attorneys' fees to Audi. He also appeals the district court's denial of his Rule 56(f) motion for additional discovery. For the reasons below, we AFFIRM the district court.

I

On February 11, 1999, Defendant Bob D'Amato registered the domain name www.audisport.com. He posted content to the website on June 4, 1999, and April 4, 2000. Audi AG v. D 'Amato, 381 F.Supp.2d 644, 654 (E.D. Mich. 2005). According to D'Amato, Richard Cylc, who worked at Champion Audi, an Audi dealership in Pompano, Florida, contacted him via email stating that he liked the site. Cylc later "asked if it would be mutually beneficial if we develop the site." Appellant's Br. at 4. Cylc then turned development over to Devin Carlson, a salesperson employed by Champion Audi, who D'Amato claims sent content to the site. Id. at 4-5. D'Amato testified that Carlson gave him verbal authorization to display Audi Trademarks. D'Amato alleges that when he asked if displaying the logos was permissible, Carlson stated that it had been authorized by a man named Bob Skal. Audi, 381 F.Supp.2d at 649. D'Amato states that he asked Skal for written authorization "many, many, many times," but that Skal continued to make excuses as to why he had not gotten around to giving D'Amato written authorization. Id. at 649-50.

Audi has shown that in reality, Skal was not affiliated with Audi in any way.1 Id. at 650. Further, Champion Audi, the employer of Carlson and Cylc, entered into an agreement with Audi providing that: "This agreement does not grant Dealer [Champion Audi] any license or permission to use Authorized Trademarks except as mentioned herein, and Dealer has no right to grant any such permission or interest'' Id. (emphasis added).

Beginning on April 18, 2002, D'Amato agreed with Carlson that he would post hyperlinks to another site, www.audisportline.com, which would direct internet customers to an "Audisport Boutique and Services" webpage. This webpage offered goods (such as hats and shirts) with the "Audi Sport" logo, and an email subscription service offering "audisport.com" email addresses. Id. these items were posted for sale in 2003. Id. at 648. In exchange for posting the link on

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the website, D'Amato would receive a portion of the sales revenue. Id. at 650. Each item had a Paypal button for customers to make payments.

Prior to posting these items for sale, D'Amato commissioned Thompson Smith, a graphic designer, to create two logos incorporating the AUDI RING LOGO that D'Amato displayed on his audisport.com website. Smith visited the plaintiff s actual www.audi.com website and noticed some items of concern, which he emailed to D'Amato on May 21, 2002:

1. Audi already HAS a "Collection" site that is really well done with "some very limited" Audi Sport goodies. Are we taking over management, production of this and it will then become "audisport.com"?

2. Are you sure that we have the licensing rights to reproduce "Audi", "Audi Sport", quattro, etc. logos? If we do, lets please see this in writing for working with vendors, etc. I will need a copy of this.

3. Will the new company be incorporated, and we are employees/partners or are we going to be sub-contractors for [Audi of America]?

4. If incorporated or LLC as www.audisport.com. do we have a corporate lawyer?

Audi, 381 F.Supp.2d at 648.

While the www.audisport.com website was running, the homepage displayed the message: "Who are we? We are a cooperative with Audi of America, and will be providing the latest products for your Audi's [sic] and information on Audisport North America." Id. at 649. D'Amato initially testified that he never received written permission to display Audi Trademarks, but later stated that:

Since the spring of 2003 to the present, I received email, oral, and written communications from Melissa Grunnah, Audi AG, currently Audi AG's Press Officer.2 Devin Carlson initially directed me to Melissa Grunnah, who sends me news and press releases by e-mail about Audi racing events. She has on more than one occasion given me permission to post news, content, images and racing information at audisport.com as well as emailed to other multiple parties including audiworld.com. she sends copies of this content by email to multiple people, of which I am one of, on the email distribution list.

Id.

On May 29,2003, due to the fact that the website had generated no profit, Carlson cancelled any further development. Id. at 650-51. He told D'Amato that he would tell him the actual date he should remove the links, though Carlson never got back to D'Amato about taking them down. On December 19,2003, December 22, 2003, and January 8, 2004, D'Amato received Cease and Desist letters from Audi. Mat 651.

D'Amato claims that on February 9, 2004, he "removed references to all approved page designs, all logos developed, and content posted having Audi Trademarks (AUDI, AUDI FOUR RINGS, and QUATTRO)" such that, as a result, " audisport.com appeared in a noncommercial way." D'Amato states that through the course of its existence, his "website was transformed from a noncommercial informational

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website, to a site for an Audi's [sic] licensee, and then back to noncommercial website," and contends that "Audi AG continues to use and supply content to audisport.com '' Appellant's Br. at 9.

Despite D'Amato's contention, the facts show that www.audisport.com continued to have some commercial purpose. At the time the district court ruled on summary judgment, D'Amato was still offering to sell advertising space on the website. Audi, 381 F.Supp.2d at 650. Simultaneously, the website informed visitors "this page is not associated with Audi AG or Audi USA in any way." Id.

II

The district court found that there were no issues of material fact and entered summary judgment in favor of Plaintiff Audi for its infringement, dilution, false designation of origin, and cyberpiracy claims. Id. at 670-71. The court denied Audi's request for statutory damages under 15 U.S.C. § 1117(a), but granted its request for a permanent injunction and attorneys' fees. Id.

The court also denied D'Amato's motion to reopen the discovery period through his submission of a Rule 56(f) affidavit. It found that although D'Amato was well aware of the issues with regard to which he sought discovery, he had not attempted to conduct discovery until after business hours on the last day of discovery. Id. at 653.

III

We review a district court's denial of additional time for discovery for abuse of discretion. Plott v. General Motors Corp., 71 F.3d 1190, 1198 (6th Cir. 1995). Factors that should be considered include when the moving party learned of the issue that is the subject of discovery, how the discovery would affect the ruling below, the length of the discovery period, whether the moving party was dilatory, and whether the adverse party was responsive to prior discovery requests. Id. at 1196-97.

In this case, the discovery period ended on February 28, 2005. D'Amato sought additional discovery in the form of a notice of deposition faxed to Audi after business hours on this day, which Audi did not receive until the next day. Audi, 381 F.Supp.2d at 653. The magistrate judge denied D'Amato's motion to compel responses and extend the discovery deadline, and the district court affirmed on June 17, 2005. Id. when it denied D'Amato's Rule 56(f) affidavit, the district court found that such an affidavit is appropriate when a party files it before discovery, but here, D'Amato filed it after discovery. Id. the court also noted that it had previously addressed and rejected this issue in June. Id.

D'Amato contends that his delay was excusable because he was unaware of the issue the request pertained to — namely, an alleged abandonment by Audi of its mark "AUDI SPORT" — until February 16, 2005. Appellant's Br. at 43-44. Even if we believe D'Amato, this was twelve days prior to the discovery deadline on which D'Amato finally made his discovery request. More importantly, D'Amato's counsel conceded at the magistrate hearing that D'Amato had been aware of the issue this request pertained to since December 14, 2004, a full two-and-a-half months before the discovery deadline.

In Plot...

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