Ford Motor Co. v. B & H SUPPLY, INC.
| Decision Date | 28 October 1986 |
| Docket Number | Civ. No. 3-85-865. |
| Citation | 646 F. Supp. 975 |
| Parties | FORD MOTOR COMPANY, Plaintiff, v. B & H SUPPLY, INC., a corporation; Minnesota Dealer Supply, Inc., d/b/a Accent Parts, International, a corporation; Dealer's Discount Supply II, Inc., a corporation; Minneapolis Warehouse Supply, Inc., d/b/a B & H Supply, a corporation; All-American Automotive, Inc., a corporation; Tri-City Distributing, a corporation; Mid-West Automotive Dealers Supply, Inc., a corporation; Autocraft Parts Supply, Inc., a corporation; Superior Plug, Inc., a corporation; Robert Hooper, an individual; Richard Jobe, an individual; Robert Mitchell, an individual; Mark Nelson, an individual; Phil Berdell, an individual; and Henry Bechthold, an individual, Defendants. |
| Court | U.S. District Court — District of Minnesota |
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David C. Hilliard, and Charles R. Mandly, Jr., Pattishall, McAuliffe & Hoftstetter, Chicago, Ill., Warren Spannaus, Dorsey & Whitney, Minneapolis, Minn., and Clifford L. Sadler, Dearborn, Mich., for plaintiff Ford Motor Co.
Malin D. Greenberg, St. Louis Park, Minn. for defendants B & H Supply, Inc., Mid-West Automotive Dealers Supply, Inc., Superior Plug, Inc.
Robert Hooper, Phil Berdell, and Henry Bechthold, Timothy B. Poirier, Harrigan & Hanley, Minneapolis, Minn., for defendants Dealers' Discount Supply II, Inc., Minnesota Dealers Supply, Inc., Accent Parts Intern., Inc., Autocraft Parts Supply, Inc., and Richard Jobe.
James W. Hunter, Rapaport, Wylde & Hunter, Minneapolis, Minn., for defendants Minneapolis Warehouse Supply, Inc., All-American Automotive, Inc., Tri-City Distributing, Inc., Robert Mitchell, and Mark Nelson.
INTRODUCTION
Plaintiff Ford Motor Company (Ford) commenced this action against the various defendants on June 26, 1984, alleging claims of copyright infringement (Count I), trademark infringement and unfair competition (Count II), and racketeering and corrupt practices (Count III). Contemporaneous with filing its Complaint, Ford sought a Temporary Restraining Order and an Order for Seizure. In an Order dated June 26, 1984, Judge Harry H. MacLaughlin issued a Temporary Restraining Order, restraining the several defendants from using Ford's copyrighted package designs and trademarks, or any counterfeit or imitation of such designs or trademarks, and from doing any other act likely to confuse, mislead, or deceive the public that defendants' products originate from Ford or are approved by Ford. In his Order of June 26, 1984, Judge MacLaughlin also authorized a seizure of merchandise at the warehousing facilities of defendants B & H Supply, Inc., 8050 Wallace Road, Eden Prairie, Minnesota and Dealer's Discount Supply II, Inc., 6008 Culligan Way, Minnetonka, Minnesota. Upon execution of the seizure order, the United States Marshal seized significant quantities of automotive products and packaging which Ford alleges are counterfeit or spurious copies of Ford copyrights and trademarks.
On July 13, 1984, after a hearing on the merits, Judge MacLaughlin ordered a Preliminary Injunction as to defendants Dealers Discount Supply II, Inc., Minnesota Dealer Supply, Inc., Accent Parts International, Inc., Autocraft Parts Supply, Inc., and Richard Jobe. On July 16, 1984, the court issued a Consent Order for Preliminary Injunction as to defendants B & H Supply, Inc., Minneapolis Warehouse Supply, Inc., All-American Automotive, Inc., Tri-City Distributing, and Robert Hooper.1 All defendants subsequently filed their Answers in December 1984, entering a general denial to Ford's allegations and asserting the affirmative defenses of failure to state a claim and estoppel, laches, and waiver. Following the disqualification of Judge MacLaughlin on May 8, 1985, this court entertained Ford's Motion for Summary Judgment. In an Order dated August 10, 1985, the court denied Ford's summary judgment motion, finding that genuine issues of material fact existed with respect to each of Ford's claims for relief.
During the course of the litigation, Ford brought two separate motions for an Order to Show Cause why certain defendants should not be found in contempt of court for violations of the preliminary injunctions previously ordered by the court. Specifically, in a motion filed August 8, 1985, Ford alleged that defendants Dealer's Discount Supply II, Inc. and Richard Jobe sold counterfeit Ford automotive parts in violation of the Preliminary Injunction entered against such defendants on July 13, 1985. Similarly, in a motion filed November 22, 1985, Ford alleged that defendant Henry Bechthold and Northland Automotive Warehouse, Inc., a/k/a Mainline Automotive, sold counterfeit Ford automotive parts in violation of the Preliminary Injunction of July 16, 1985. The court withheld consideration of Ford's motions for an Order to Show Cause until such time as the case was tried on the merits.
This lawsuit came on for trial before Judge Paul A. Magnuson on December 17, 1985 and December 18, 1985, and was fully submitted to the court upon the completion of post-trial briefing on February 7, 1986. The court had jurisdiction over the parties and subject matter of this action pursuant to 28 U.S.C. § 1338(a) and (b) and 28 U.S.C. § 1331. The court heard and received evidence with respect to Ford's claims of copyright and trademark infringement, unfair competition, and racketeering and corrupt practices. The court, having considered the testimony and evidence received at trial and the arguments and briefs of counsel, now offers this Memorandum and Order which constitutes the findings of fact and conclusions of law of the court as required under Rule 52(a) of the Federal Rules of Civil Procedure.
Ford Motor Company is engaged in the manufacture, advertising, and sale of a variety of motor vehicles, communication equipment, and related products and services, including automotive replacement parts and accessories. As part of its automotive replacement parts business, Ford has developed a unique and distinctive printed speeding car packaging design in blue, black and white colors and in red, black and white colors for which it has received Certificates of Registration from the United States Copyright Office.3 Since at least 1966, Ford has used its distinctive speeding car trade dress and distinctive Ford Numbering System, and its FORD, Ford Oval, and MOTORCRAFT trademarks to identify its automotive parts and accessories. Ford has registered its FORD and MOTORCRAFT trademarks with the United States Patent and Trademark Office and it is undisputed that the registrations are valid, giving Ford the exclusive right to use such marks.
Over the past ten years, Ford has sold over ten billion dollars ($10,000,000,000.00) worth of automotive replacement parts and accessories and has spent over one hundred thirty million dollars ($130,000,000.00) in promoting such automotive parts under its trademarks and copyrighted package designs. By virtue of Ford's long use of its FORD, Ford Oval, MOTORCRAFT, Ford Numbering System and the Ford speeding car design trademarks, such trademarks acquired a secondary meaning signifying Ford and its products prior to the alleged infringing acts of defendants at issue in this action. Ford now owns a most valuable goodwill which is symbolized by its FORD, Ford Oval, MOTORCRAFT, Ford Numbering System and Ford speeding car design trademarks. As a result, the use of Ford's trademarks substantially increases the salability of Ford's products.4
Ford, concerned about increasing reports of counterfeit parts and simulated Ford packaging,5 launched an investigation to determine the sources of such parts. Ford's concerns stemmed not only from the resulting lost profits, but also from their findings that the actual parts were of lesser quality and did not meet Ford's quality standards. Through its investigation, Ford identified approximately one hundred and twenty (120) sources of counterfeit and simulated parts, twenty-seven (27) of which were from Minnesota. A further investigation in early 1984 led Ford to believe that the warehousing facilities of defendants B & H Supply, Inc. and Dealer's Discount Supply II, Inc. supplied counterfeit and simulated parts to customers on a national basis. Consequently, Ford commenced this lawsuit and initiated the court-ordered seizures which took place on June 26, 1984. Ford alleges that all of the defendants are engaged together in the business of purchasing, warehousing, marketing, selling, and distributing automotive replacement parts, including parts bearing counterfeits or simulations of Ford's copyrighted speeding car design and Ford trademarks. Ford contends that defendants' conduct has resulted in violations of the copyright laws, 17 U.S.C. § 101-914, the trademark laws, 15 U.S.C. §§ 1051-1127, the anti-racketeering laws, 18 U.S.C. §§ 1961-1968, and the Minnesota law of unfair competition.
Defendant B & H Supply, Inc. (B & H Supply), a Minnesota corporation, is engaged in the business of purchasing, warehousing, and shipping automotive parts. Beginning in March 1984 and continuing through the present time, B & H Supply ships automotive parts exclusively for defendants Minneapolis Warehouse Supply, Inc. (Minneapolis Warehouse), All-American Automotive, Inc. (All-American), and Tri-City Distributing (Tri-City). Prior to March 1984, B & H Supply operated under the name of Dealer's Discount Supply, Inc. (Dealer's Discount I). During that period, Dealer's Discount I shipped automotive parts on behalf of defendant Dealer's Discount Supply II, Inc. in addition to Minneapolis Warehouse, All-American, and Tri-City. B & H Supply is solely owned by defendant Robert Hooper (Hooper), who also serves as the corporation's president.
Minneapolis Warehouse, All-American, and Tri-City are three distinct, though related,...
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