Sam's Riverside Inc. D/B/A Sam's Riverside Auto Parts v. Intercon Solutions Inc.

• Decision Date: 10 June 2011
• Docket Number: No. 4:09–CV–20 RP–RAW.,4:09–CV–20 RP–RAW.
• Court: U.S. District Court — Southern District of Iowa
• Parties: SAM'S RIVERSIDE, INC. d/b/a Sam's Riverside Auto Parts, Plaintiff,v.INTERCON SOLUTIONS, INC.; A–Reliable Auto Parts & Wreckers, Inc.; ARSHG, Inc., f/k/a Automotive Rebuilders Supply Company d/b/a ARSCO, Defendants.

790 F.Supp.2d 965

SAM'S RIVERSIDE, INC. d/b/a Sam's Riverside Auto Parts, Plaintiff,

v.INTERCON SOLUTIONS, INC.; A–Reliable Auto Parts & Wreckers, Inc.; ARSHG, Inc., f/k/a Automotive Rebuilders Supply Company d/b/a ARSCO, Defendants.

No. 4:09–CV–20 RP–RAW.

United States District Court,S.D. Iowa,Central Division.

June 10, 2011.

Kirk M. Hartung, Christine Lebron–Dykeman, Kurt R. Van Thomme, Jeffrey D. Harty, McKee Voorhees & Sease P.L.C., Des Moines, IA, for Defendants.William W. Graham, Graham Ervanian & Cacciatore, LLP, Timothy J. Zarley, Zarley Law Firm PLC, Des Moines, IA, for Plaintiff.

MEMORANDUM OPINION AND ORDER

ROBERT W. PRATT, Chief Judge.

Currently before the Court is a “Motion for Summary Judgment” filed by Intercon Solutions, Inc. (“Intercon”), A–Reliable Auto Parts & Wreckers, Inc. (“A–Reliable”), and ARSHG, Inc. (“ARSCO” ¹) (collectively “Defendants”) on October 12, 2010. Clerk's No. 123. Sam's Riverside, Inc. (“Plaintiff”) filed a response in opposition to the motion on November 12, 2010. Clerk's No. 151. Defendants filed a reply on November 22, 2010. Clerk's No. 177. Plaintiff filed a sur-reply on December 3, 2010. Clerk's No. 185. Also before the Court are a number of cross-motions for partial summary judgment filed by Plaintiff on October 12, 2010. Clerk's Nos. 113 (“Motion for Partial Summary Judgment as to Liability for Cybersquatting”), 118 (“Motion for Partial Summary Judgment as to Liability for False Advertising”), 120 (“Motion for Partial Summary Judgment as to Liability for False Designation of Origin”), 129 (“Motion for Partial Summary Judgment as to Liability for Per Se Palming Off”). Defendants filed responses in opposition to these motions on November 12, 2010. Clerk's Nos. 150, 161, 162, 163. Plaintiff filed replies on November 19, 2010. Clerk's Nos. 168, 169, 170, 175. Plaintiff filed a supplemental brief, with leave of Court, on March 21, 2011. Clerk's No. 198; see also Clerk's No. 199. Defendants filed a response to the supplemental brief on April 1, 2011. Clerk's No. 203. Plaintiff filed a reply on April 6, 2011. Clerk's No. 204. Defendants filed a sur-reply, with leave of Court, on April 11, 2011. Clerk's No. 207; see also Clerk's No. 206. Plaintiff filed a reply to that sur-reply on April 18, 2011. Clerk's No. 210.

The Court held a hearing on these motions on March 28, 2011. Clerk's No. 202. At the hearing, the Court ordered Plaintiff to file a letter with additional factual information. See id. Plaintiff did so on April 6, 2011. See Clerk's No. 208. Defendants filed a response to that letter on April 13, 2011. Clerk's No. 209. The matters are fully submitted.²

I. FACTUAL BACKGROUND ³

A. The Parties

Plaintiff is a diversified business in the automotive and truck industry. Clerk's No. 150–1 ¶ 1. Plaintiff sells, among other things, heavy duty truck parts and air cleaners. See Clerk's No. 151–1 ¶ 1 (referring to Plaintiff's “heavy duty truck parts, air cleaners business and heavy duty truck salvage business”). Bryan Hainline (“Hainline”) is one of Plaintiff's employees. See id.; Clerk's No. 131 ¶ 1.

Intercon is a company currently owned by Howard Gossage (“Gossage”) and Brian Brundage (“Brundage”). Clerk's No. 131 ¶ 23. Gossage originally founded Intercon as a fax service “for locating truck parts but eventually Gossage sold off the fax locating services and entered into the web marketing business.” Id. ¶ 24. When Gossage entered the Internet marketing business, he hired his nephew, Brundage, “to run the Intercon business because Brundage was much more knowledgeable about the Internet than Gossage.” Id. ¶ 25. Intercon does not sell heavy trucks and is not a repairable truck dealer. Clerk's No. 150–1 at ¶ 15. Intercon has never repaired trucks, had a selection of trucks on-site, or sold air cleaners. Id. at Resps. to ¶¶ 14, 17.

ARSCO is a company that sells truck parts “mainly to rebuilders.” Clerk's No. 131 ¶¶ 33–34. ARSCO does not sell heavy trucks and is not a repairable truck dealer. Clerk's No. 150–1 at ¶ 16. ARSCO has never repaired trucks or had a selection of trucks on-site. Id. at Resps. to ¶¶ 14, 17. At all relevant times, ARSCO was owned solely by Howard Gossage. Clerk's No. 131 ¶ 34. On October 9, 2008, A–Reliable purchased certain assets from ARSCO. Id. ¶ 48. A–Reliable is a wholly-owned subsidiary of LKQ Corporation (“LKQ”).⁴ Id.; see also Clerk's No. 153 at 2.

B. Plaintiff's Asserted Mark

Plaintiff claims that, prior to 2001, it had established protectable rights in the term “Sam's Riverside.” See Clerk's No. 120–2 ¶ 3; see also Hr'g Tr. 6:13–18, 9:11–17.⁵ Defendants hotly dispute this assertion, arguing that, prior to 2009, Plaintiff “always identified itself on its website, in its newspaper and trade magazine advertising and on invoices as Sam's Riverside [T]ruck [P]arts or Sam's Riverside, Inc. and never used the term Sam's Riverside alone.” See Clerk's No. 162–1 at Resp. to ¶ 3. Due to the evidentiary and other legal issues raised by the parties' arguments, the Court will discuss the facts related to this issue below in Section III(A).

C. The Websites

In early 2001, Brundage and Hainline agreed that Intercon would “develop and maintain several websites to assist Plaintiff in marketing” its business. Clerk's No. 131 ¶ 1. Pursuant to this agreement, Brundage selected and registered three domain names: www. samstrucks. com, www. samsair cleaners. com, www. samstruck. com (collectively the “Domain Names”). Id. ¶ 2. Intercon also created three websites that could be accessed via the Domain Names (collectively the “Websites”). See id. ¶¶ 2–3.

The Websites were originally “designed to drive Internet leads to Plaintiff.” Id. ¶ 4. The Websites contained Plaintiff's contact information but did not link directly to Plaintiff's preexisting website, located at www. sams riverside. com. See id. ¶ 5; see also Clerk's No. 132–1 at 11 (Brundage Dep. Tr. 98:12–14). Instead, the Websites each contained an “email link” that allowed customers to submit questions or comments, which would be emailed to an email address managed by Intercon. See Clerk's No. 131 ¶ 5. The emails (referred to by the parties as “leads”) were then supposed to be sent to Plaintiff.⁶ However, “on two single occasions between 2001 and 2004 email leads from the Websites were sent from Intercon to ARSCO.” ⁷ Clerk's No. 177–1 at Resp. to ¶ 26.

Intercon maintained the Websites for Plaintiff until 2004. Clerk's No. 131 ¶ 3. In January of 2004, Hainline called Brundage and informed him that “Plaintiff wanted to terminate its on-going web-management contract with Intercon.” Id. ¶ 8. The parties dispute, however, what Hainline and Brundage said during this call regarding the future use of the Websites and the associated domain names. At his deposition, Brundage testified that Hainline told him that Intercon “could keep the sites” because they “were not working for Plaintiff.” Id. ¶ 10 (citing Clerk's No. 132–1 at 4 (Brundage Dep. Tr. 47–48)). However, Hainline testified that he told Brundage to shut down the Websites. See Clerk's No. 151–2 ¶ 5 (citing Clerk's No. 152 at 8 (Hainline Dep. Tr. 107)).

Following this phone call, Brundage instructed Intercon's staff to modify the Websites to remove the references to Plaintiff.⁸ Clerk's No. 131 ¶ 11. Intercon then continued to use the Websites to obtain sales leads. Clerk's No. 151–1 ¶ 15; Hr'g Tr. 21:10–12. When customers submitted questions or comments through the revised Websites, those leads would be directed to Brundage. See Clerk's No. 131 ¶ 16. Brundage would then “decide whether to forward the lead [on to] ARSCO, one of Intercon's other web-marketing clients, or no one at all.” ⁹Id. ARSCO received at least some of those emails and may have made sales as a result of such leads. See Clerk's No. 177–1 at Resps. to ¶¶ 30–31.

Plaintiff discovered that the Websites were still in use in “the fall of 2008.” ¹⁰ Clerk's No. 151–1 ¶ 17. In December 2008, Hainline “sent an e-mail to info@ samstruck. com through one of the [Websites] inquiring about an engine.” Clerk's No. 151–2 ¶ 18 (citing Decl. of Bryan Hainline (hereinafter the “First Hainline Declaration”) ¶ 16, Oct. 9, 2010 (Clerk's No. 152 at 63)). In response, Hainline received an email from Luis Mendoza (“Mendoza”), using the email address “luis@ arsco. com,” stating, in full: “HI I NEED TO KNOW WHAT YOUR SERIAL# ON THE ENGINE IS. THANK YOU.” Clerk's No. 154 at 68 (capitalization in original).

In January 2009, Plaintiff sent a cease-and-desist letter to Intercon, alleging trademark infringement and cybersquatting. Clerk's No. 131 ¶ 17. After Intercon received the cease-and-desist letter, Brundage shut down the Websites. Id. ¶ 22. Plaintiff filed this lawsuit on January 16, 2009. Clerk's No. 1. On April 28, 2009, Plaintiff filed an application to register “Sam's Riverside” as a service mark with the United States Patent and Trademark Office (“PTO”), and obtained a registration on June 29, 2010. See U.S. Trademark Reg. No. 3,809,187.

II. STANDARD FOR SUMMARY JUDGMENT

The term “summary judgment” is something of a misnomer. See D. Brock Hornby, Summary Judgment Without Illusions, 13 Green Bag 2d 273 (Spring 2010). It “suggests a judicial process that is simple, abbreviated, and inexpensive,” while in reality, the process is complicated, time-consuming, and expensive. ¹¹Id. at 273, 281. The complexity of the process, however, reflects the “complexity of law and life.” Id. at 281. “Since the constitutional right to jury trial is at stake,” judges must engage in a “paper-intensive and often tedious” process to “assiduously avoid deciding disputed facts or inferences” in a quest to determine whether a record contains genuine factual disputes that necessitate a trial. Id. at 281–82. Despite the seeming inaptness of the name, and the desire for some in the plaintiffs' bar to be rid of it, the summary judgment process is well-accepted and appears “here to stay.” ¹² Id. at 281. Indeed, “judges are duty-bound...