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Audi AG v. Shokan Coachworks

November 12, 2008


The opinion of the court was delivered by: Neal P. McCurn, Senior District Judge

Memorandum, Decision and Order

I. Introduction

Presently before the court in this trademark infringement action are cross motions for summary judgment by plaintiffs Audi AG ("Audi") and Volkswagen of America, Inc. ("Volkswagen") (collectively "Plaintiffs") and by defendants Shokan Coachworks, Inc. ("Shokan") and John H. Smith ("Smith") (collectively "Defendants"). Oral argument was heard regarding these motions in Syracuse, New York on January 8, 2008. Decision was reserved.

II. Procedural Background

Plaintiffs commenced this action over four years ago in the United States District Court for the Eastern District of Michigan. Plaintiffs' complaint ("the Complaint") sets forth five various causes of action surrounding Defendants' alleged improper use of certain of Plaintiffs' registered trademarks, including the name AUDI(r) as well as the AUDI RING LOGO(r) ("the Audi Marks"). Plaintiffs' claims in this action are (1) trademark and trade dress dilution in violation of Section 43 of the Lanham Act, 15 U.S.C. § 1125(c); (2) federal trademark infringement in violation of Section 32 of the Lanham Act, 15 U.S.C. § 1114; (3) false designation of origin or sponsorship, false advertising and trade dress infringement in violation of Section 43 of the Lanham Act, 15 U.S.C. § 1125(a); (4) cyberpiracy; and (5) common law trademark infringement.

In February 2007, United States District Judge Victoria Roberts granted the Defendants' motion to transfer the case to this district. Defendant Smith thereafter filed a motion seeking dismissal of all claims against him pursuant to Fed. R. Civ. P. 8(a) and 12(b)(6). Said motion was heard by this court and denied from the bench in June 2007. Shortly thereafter, Plaintiffs filed a motion before Magistrate Judge David R. Homer to amend their complaint to assert an additional claim for rescission of a settlement agreement. Said settlement agreement resolved a similar action brought by Plaintiffs against Shokan in this court in 1990.*fn1

While the motion to amend was pending, Defendants filed a motion to compel Plaintiffs to produce certain documents concerning third-party uses of Plaintiffs' trademarks. On August 31, 2007, Judge Homer held a telephone conference, at which he, after hearing argument from counsel, denied in part and granted in part Defendants' motion to compel. On September 4, 2007, Judge Homer reduced his Order to writing, therein directing Plaintiffs to provide Defendants with all co-existence agreements as well as complaints filed in enforcement actions against part suppliers and service stations for the period January 1, 2000 to date. See Dkt. No. 85. Defendants timely filed objections to Judge Homer's Order. Shortly thereafter, the present motions for summary judgment were filed. At the hearing of oral argument on those motions, the court overruled from the bench Defendants' objections to Judge Homer's September 4, 2007 Order. Also around that time, Judge Homer denied Plaintiffs' motion to amend the complaint to add a claim for rescission, to which objections were never filed.

Now remaining for resolution are the cross motions for summary judgment. Plaintiffs seek judgment in their favor, solely regarding liability, as to all of their claims pursuant to Fed. R. Civ. P. 56, as well as a permanent injunction against Defendants. See Dkt. No. 95. Defendants seek judgment dismissing all of Plaintiffs' claims as well as judgment in their favor on their breach of contract counter-claim, also pursuant to Fed. R. Civ. P. 56. See Dkt. No. 96.

III. Factual Background

Plaintiff Audi is a German corporation that sells its vehicles, parts, services and other products throughout the world. See Decl. of Linda Scipione, Oct. 31, 2007, ¶ 8, Dkt. No. 95-37. Plaintiff Volkswagen is an American corporation, which is the exclusive licensee for the sale of Audi vehicles, parts, services and products in the United States. See id., ¶ 2. Defendant Shokan is a New York Corporation whose only facility is located in West Shokan, New York. See Decl. of John H. Smith, Oct. 31, 2007, ¶ 8, Dkt. No. 97-1. Defendant Smith is the President and sole owner of defendant Shokan. See id. ¶ 1.; Dep. of John H. Smith, Sept. 25, 2007, 25:17-22, at Ex. Y to Decl. Of John D. Cook, Oct. 31, 2007, Dkt. No. 95. Shokan is an Audi vehicle recycling facility, which has been in operation for over twenty five years, and only sells parts for Audi vehicles. See id. ¶¶ 3 and 4.

Audi obtained a trademark registration for the word, Audi ("AUDI(r)") from the United States Patent and Trademark Office ("USPTO") on December 13, 1960. See Scipione Decl. ¶ 4; Ex. A to Cook Decl. Audi also obtained a trademark registration for its Audi Ring Logo, which consists of four horizontal, intertwined rings ("AUDI RING LOGO(r)") on January 26, 1971. See id., ¶ 5; Ex. B to Cook Decl.

In 1990, Plaintiffs commenced a trademark infringement action in this court against defendant Shokan, wherein Plaintiffs alleged Shokan infringed Audi's FOOTBALL LOGO trademark ("FOOTBALL LOGO(r)") as well as its AUDI(r) mark on letterhead, business cards and advertisements. See Ex. M to Cook Decl.; Ex. 8 to Smith Decl. The lawsuit was resolved by execution of a settlement agreement ("the Settlement Agreement" or "the Agreement") in July 1991. The Agreement states, in relevant part, that Shokan is currently using a logo comprised of the word "Shokan" enclosed in a rust-colored oval with an outside ring which are nearly identical in shape and color to the Audi Football [Logo] (the "Shokan Logo"). In the Shokan Logo, the word "Shokan" is written in a nearly identical typeface and color as the word "Audi" in the Audi Football [Logo]. In addition, the word "Audi" appears in close proximity to the Shokan Logo on Shokan's letterhead, business cards and advertisements.

Ex. O to Cook Decl; Ex. 2 to Smith Decl. In order to settle the lawsuit, Shokan agreed to stop using the Shokan Logo and agreed that "Shokan, its employees, successors and assigns will not infringe Audi AG's tradenames, trademarks or service marks, including the word 'Audi', Audi Football or Audi Four-Ring design[.]" Id. at ¶¶ 1, 3. Paragraphs four and five of the Agreement state in whole as follows:

Shokan agrees not to use the word "Audi", except that the word "Audi" may be used by Shokan as an adjective to describe the availability of parts or repair services for Audi vehicles, provided that the language preceding and following such word be in characters equal and identical in size, type, color, illumination, mounting, spacing, decoration, material and format; and that such use not be as part of a trade or corporate name; and that the phrase "Audi Service", "Audi Repair", "Audi Sales", "Audi Specialist", and "Audi Parts" shall not be used unless it is clear from the context, or by an express disclaimer, that Shokan is not affiliated with Audi AG or [Volkswagen].

Audi AG and [Volkswagen] agree that Shokan's new logo, in which "Shokan" appears in a green shape with rectangular sides and an arced top and bottom, and the advertisement attached as Exhibit A, meet the requirements of paragraphs 3 and 4, and shall not be challenged as infringing upon Audi AG's trademarks or trade dress. Id., ¶¶ 4, 5.

Exhibit A to the Agreement is an advertisement, which includes the new logo, and includes language in capital letters such as "AUDI USED PARTS", and "800-ALL-AUDI". See id.

On November 15, 1991, the Honorable Howard G. Munson dismissed the 1990 lawsuit "without prejudice." Audi Aktiengesellschaft, et al. v. Shokan Coachworks, 90-cv-01172 (N.D.N.Y.), Dkt. No. 6. Specifically, Judge Munson ordered that "[t]he court retains complete jurisdiction to vacate this Order and to reopen the action upon cause shown that settlement has not been completed and further litigation is necessary." Id.

Over a decade later, on May 13, 2003, Plaintiffs notified Defendants of certain of their alleged infringing uses of Plaintiffs' trademarks and demanded that Defendants cease and desist from those uses, which include registering the domain name and displaying Plaintiffs' trademarks on the website to which the domain name refers. See Ex. V to Cook Decl. On October 20, 2003, Plaintiffs again wrote to Defendants, noting the removal of the AUDI RING LOGO(r) from Shokan's website, as well as the use of a new domain name for the website (i.e.,, but demanding that Defendants transfer registration of the domain to Plaintiffs and further complaining that Defendants' use of the 800-ALL-AUDI vanity telephone number infringes the AUDI(r) mark.

See Ex. Z to Cook Decl. The commencement of the present action followed on February 14, 2004. On May 7, 2004, Plaintiffs wrote to Defendants rejecting their offer of settlement because although Defendants agreed to comply with the terms of Plaintiffs' October 20, 2003 letter, they did not agree to cease use of the 800-ALL-AUDI vanity telephone number. See Ex. AA to Cook Decl. By that same letter, Plaintiffs contend Defendants continue to violate the terms of the Settlement Agreement, a contention which did not appear in either of the previous cited correspondence. See id.; Exs. V and Z to Cook Decl.

At issue in the present action are several alleged incidents of misappropriation of Plaintiffs' AUDI(r) and AUDI RING LOGO(r) trademarks by Defendants. First, Plaintiffs object to Defendants' use of the vanity telephone number, 1-800-ALL-AUDI, as well as the domain name, as inappropriate uses of the AUDI(r) mark. Other alleged misappropriations of this mark include the use of "Used Audi Parts" or "Audi Used Parts" in advertisements, answering of Shokan's business telephone, "all Audi," use of "Shokan Audi Parts" as a signature block on 38,000 of Shokan's electronic messages ("email"), and the use of as an email address to conduct Shokan business. Plaintiffs further allege that Defendants misappropriate the AUDI(r) mark with the placement of signs on Shokan's business premises that read, "Audi Parts Warehouse," and "1-800-ALL-AUDI." Finally, Plaintiffs allege Defendants misappropriate the AUDI RING LOGO(r) with its use on the Shokan website as well as its appearance as a sign on Shokan's business premises.

Vanity Telephone Number

Shokan has been using and advertising its 800-ALL-AUDI vanity telephone number for over twenty years. According to defendant Smith, over ninety seven percent of Shokan's sales are made by telephone. See Smith Decl. ¶ 39.

On May 24, 1989, counsel for plaintiff Volkswagen wrote to defendant Smith complaining that a Shokan advertisement, which appeared in the April 3, 1989 issue of Autoweek magazine, infringes Audi trademarks in several ways as follows: use of the word, "AUDI" in block lettering; use of a logo which includes the name "Shokan" inside an oval and utilizes the Audi oval and lettering; and use of the word, "Quattro". See Ex. 5 to Smith Decl. The Shokan advertisement, which appeared in the April 3, 1989 issue of Autoweek magazine, included the aforementioned alleged infringing uses, but also included the vanity telephone number, "800-ALL-AUDI." See id., Ex. 9. The same advertisement appeared in the July, August and September 1990 issues of Car and Driver magazine. See id., Ex. 17. According to Volkswagen trademark paralegal, Linda Scipione, Audi acknowledges that it was aware of the April 3, 1989 Autoweek advertisement as well as the 1990 Car and Driver advertisements at the time that they appeared, "but believed that Shokan ceased its use of these advertisements as a result of the 1991 Settlement Agreement." Decl. of Linda Scipione, Nov. 19, 2007, ¶¶ 4, 6. Dkt. No. 105-2. Scipione further declares that Audi was unaware of Shokan's use of the vanity telephone number after execution of the Settlement Agreement. See id., ¶ 7. Scipione also testified that Defendants were not asked to stop using the vanity telephone number in 1990 because "[v]anity telephone numbers weren't a big deal back then." Scipione Dep., 98:16-99:23, Ex. 7 to Smith Decl., Dkt. No. 97.

Other advertisements including the "1-800-ALL-AUDI" vanity telephone number appeared in the Spring and Fall 1997 issues of Quattro Quarterly. See Ex. 18 to Smith Decl. Scipione declares that no one in Audi's legal department was aware of these advertisements, a contention which is further supported by her deposition testimony as well as that of Audi's in-house trademark attorney, Debra Kingsbury. See Nov. 17, 2007 Scipione Decl. ¶ 5; Dep. of Linda Scipione, Sept. 18, 2007, 76:7-11, 77:17-19, Ex. KK to Decl. of John Cook, Nov. 20, 2007, Dkt. No. 105-9; Dep. of Debra Kingsbury, Sept. 18, 2007, 177:17-23, Ex. JJ to Cook Decl. According to Scipione, Quattro Quarterly is not an official publication of Plaintiffs but instead is the national publication of the Audi Club of North America, a legally separate entity from Plaintiffs. See Nov. 17, 2007 Scipione Decl. ¶ 5. At her deposition, however, Scipione testified that she understood the Audi Club of North America to be "associated with Audi AG" and when asked if she was aware that Audi sponsors the Audi Club of North America, Scipione replied "[t]hat would make sense because I knew there was some sort of connection[.]" See Scipione Dep., 76:18-25; 77:13-15. By her deposition, Scipione explains that while Audi is a sponsor of the Audi Club of North America, it is not the sole sponsor, and that several other companies, including Bridgestone Tires, Maplewood Imports, and Anderson Motorsport, sponsor the organization. See Nov. 17, 2007 Scipione Decl. ¶ 5. Defendants clarify that while Audi is not the sole sponsor of the Audi Club of North America, it is the sole Gold sponsor, followed by several Silver, Bronze, and Contributing sponsors. See Smith Decl. ¶ 91, Ex. 26, Dkt. No. 98.

As evidence of Defendants' knowledge that use of their vanity telephone number constitutes trademark infringement, Plaintiffs point to a letter dated February 21, 1994 wherein Smith notified Plaintiffs' counsel that a competitor of Shokan was using the business name, "VW Parts Inc." and inquired regarding whether such use was permissible. See Ex. Q to Cook Decl. Smith requested that he be contacted and provided his telephone number as "800-255-2834". See id. In a follow-up letter dated May 18, 1994, Smith again asked for feedback regarding his competitor's business name, and indicated that he would like his business name to be "AUDI PARTS INC." See Ex. R to Cook Decl. Accompanying the follow-up letter is a business card for Smith's competitor, which includes the vanity telephone number, "1-800-VW-PARTS." See id. Shortly thereafter, counsel for Plaintiffs notified Smith that the use of "VW" in the name of his competitor is an infringement of Volkswagen's trademark, and accordingly, Smith would not be allowed to change Shokan's name to "Audi Parts Inc." See Ex. S to Cook Decl. Counsel further notified Smith that the use of the "advertised telephone number of 1-800-VW-PARTS[]" also constitutes trademark infringement. See id.

Domain Name Registration

The domain name, was registered on February 1, 2001. See Ex. X to Cook Decl. The "registrant" of the domain name is listed as "Shokan Coachworks," followed by "John Smith" and the Shokan business address. See id. According to Smith, he did not, nor did he instruct anyone else to, register the domain name, See Decl. of John H. Smith, Oct. 31, 2007, ¶¶ 43, 45, Dkt. No. 97-1. Although Smith declares that the domain name was registered to Shokan, and not to him personally, see id. ¶ 44, a copy of the registration reflects that both Smith and Shokan are listed as registrant, see Ex. X to Cook Decl.; Ex. 35 to Smith Decl. Both Smith and Shokan are also listed as the administrative contact on the registration. See Ex. 35 to Smith Decl.

It is undisputed that Shokan has discontinued use of the domain name, and that as of the time of the filing of the pending motions, an Internet browser seeking to locate the website to which it refers will receive an error message. See Defs.' Statement of Material Facts ¶¶ 40, 42, Dkt. No. 96-3; Pls.' Resp. to Defs.' Statement of Material Facts ¶¶ 40, 42.

Trademarks on Website

Plaintiffs submit a copy of an image taken from Defendants' website, on which the AUDI RING LOGO(r) appears. See Ex. W to Cook decl. Smith declares that he is unaware of the AUDI RING LOGO(r) ("the Logo") appearing on Shokan's website for more than twenty-four hours. See Smith Decl. ¶ 26. According to Smith, neither he nor any of Shokan's employees knew of the existence of the Logo on the website until they received notification of same from Plaintiffs, as it was Shokan's website designer, an independent contractor, who placed the logo on the website. See id. ¶¶ 30-31. Smith's son, Aaron, testified that he was unaware of the existence of the Logo on the website until 2003 when Audi brought it to Defendants' attention. See Dep. of Aaron Smith, Sept. 25, 2007, 25:1-26:14; 27:7-13, at Ex. 11 to Smith Decl., Dkt. No. 97. It is undisputed that Defendants received notice that the Logo appeared on their website in May 2003. See Pls.' Statement of Material Facts ¶ 22, Dkt. No. 95-38; Defs.' Resp. to Pls.' Statement of Material Facts ¶ 22, Dkt. No. 107-2. Smith contends that the Logo was removed from the website within twenty-four hours of Shokan receiving notice of its existence, and that it has not appeared on the website since May 2003. See id. ¶ 28-29.

According to the deposition testimony of Pat Guariglia, Shokan's website designer, while it is true that either he or his partner put the AUDI RING LOGO(r) on the website, the content that "went live on the website had final approval . . . [b]y . . . either John Smith or Aaron Smith." See Dep. of Pat Guariglia, Sept. 24, 2007, 36:25-37:3, 31:24-32:11, Ex. PP to Cook Decl. Guariglia also testified that the website went live sometime in 2001 and that the Logo appeared on the site at that time. See id., 27:15-30:4, 70:5-10.

Plaintiffs have submitted images which are purported to represent the appearance of Shokan's website at various times in the past. See Exs. NN, OO, QQ, RR and TT to Decl. of Jacob Adams, Nov. 20, 2007, Dkt. No. 105-3. A trademark paralegal for Plaintiffs' counsel declares that in order to produce the images of Shokan's website, he utilized another website,, referred to as the "Internet Archive," which provides "a collection of chronological records of various websites." Id. ¶¶ 4-5, 9. Images, which Adams declares represent the appearance of the website on September 25, 2001 and February 6, 2003, both include the AUDI RING LOGO(r). See Exs. NN and OO to Adams Decl.

Smith contends that the Shokan website contains the following language: "Shokan Coachworks is not affiliated with Audi AG. AUDI(r) is a registered trademark of Audi AG. You may visit Audi AG's worldwide website at" See Smith Decl. ¶ 51. In support of this contention, Defendants submit a copy of their website home page dated July 9, 2007, which does reflect the cited disclaimer. Other images obtained from the Internet Archive,, which purportedly represent the appearance of Shokan's website on January 26, 2004 and June 15, 2004, were submitted by Plaintiffs. See Exs. TT and QQ to Adams Decl., Dkt. No. 105-3. Those images reflect that the disclaimer appeared on the homepage of Shokan's website,, on June 13, 2004, but was absent from the website's homepage on February 10, 2004. See id.

Answering Telephone, "All Audi"

According to Jared Cherry, a paralegal who is employed by Plaintiffs' counsel, "[o]n multiple occasions" when he called Shokan "between May 13, 2003 and March 2004, . . . the persons answering the telephone . . . answered the phone by saying 'all Audi'." Decl. of Jared Cherry, Oct. 30, 2007, ¶¶ 1-3, Dkt. No. 95-36. When asked if he ever answered the telephone at Shokan, "all Audi," Smith replied, "I may have , but I don't recall doing it routinely, no." Smith Dep., Sept. 25, 2007, 131:13-16, at Ex. Y to Cook Decl. Smith went on to state that he never heard any employees at Shokan answer the phone that way. See id., at 131:17-19. In a subsequent declaration in support of Defendants' summary judgment motion, Smith states that "Shokan does not answer its telephone as "all Audi[,]" and he "cannot remember a single instance where [he] answered the phone" that way or heard an employee answer the phone that way. See Smith Decl. ¶¶ 52-53. Smith contends that Shokan employee Nancy Dow is responsible for answering the telephone at Shokan and has been instructed to, and indeed does, answer the phone by saying, "Shokan." See id. ¶ 54. Shokan employees Nancy Dow and Aaron Smith both testified that they never answered the phone, "all Audi" nor have they ever heard anyone else answer the phone that way. See Dep. of Nancy Dow, Sept. 26, 2007, 44:10-16, at Ex. 35 to Supplemental Decl. of John H. Smith, Nov. 20, 2007, Dkt. No. 107; Dep. of Aaron Smith, Sept. 25, 2007, 39:14-21, at Ex. 36 to Supplemental Smith Decl. Finally, Pat Guariglia, Shokan's website design consultant, testified that he did not recall specifically how the telephone was answered when he called the Shokan facility, and that "[s]ometimes it was probably just hello." Dep. of Pat Guariglia, Sept. 24, 2007, 21:3-6; 55:20-25, Ex. PP to Decl. of John D. Cook, Nov. 20, 2007, Dkt. No. 105-9; Ex. 34 to Supplemental Smith Decl.

Email Signature Block

Plaintiffs contend that "[m]ost of the approximately 38,000 emails produced by Defendants use the signature block, 'Shokan Audi Parts.'" Pls.' Statement of Material Facts. ¶ 30. In support thereof, Plaintiffs cite to one email message, which does include the referenced signature block. See Ex. DD to Cook Decl., Dkt. No. 95-32. Defendants dispute the authenticity of the email message, claiming that "it has been manipulated by Audi's counsel and does not appear in the format that would be viewed by a consumer." See Defs.' Resp. to Pls. Statement of Material Facts, at ¶ 30. Defendants specifically contend that none of the emails use the phrase, "Shokan Audi parts" as a signature block. Id. However, Defendants submit several email messages in support of their motion for summary judgment, which Smith states are "true and accurate copies of emails sent or received by Shokan." Smith Decl. ¶ 88, Ex. 23, Dkt. No. 98. Many of said emails appear in the same format as the single email submitted by Plaintiffs, and include the same signature block, "Shokan Audi Parts." See id.; Ex. DD to Cook Decl.

Email Address

Plaintiffs also contend that Defendants used the personal email address, to conduct Shokan business, and submit a copy of one email message in support of same. See Pls.' Statement of Material Facts. ¶ 30; Ex. EE to Cook Decl. The single email submitted by Plaintiffs is a message from Smith to "" See id. Smith declares that he "never used the email to communicate with any Shokan customers." Supplemental Smith Decl. ¶ 102.

Plaintiffs submit images of Defendants' website homepage as it purportedly appeared on various dates in 2002 and 2003, which were obtained through an search as previously described. See Supplemental Decl. of Jared Cherry, Nov. 30, 2007, ¶ 9, Ex. 1, Dkt. No. 109-3. The images reflect that the email address appeared on Defendants' website on July 24, 2002, November 20, 2002, February 6, 2002, March 25, 2003, September 22, 2003, and October 27, 2003. See id. Defendants point out that a copy of their website dated May 12, 2003, which appears as Exhibit D to the Complaint, reflects that the email address,, was used, not See Ex. 12 to Smith Decl.

Signs on Shokan's Business Premises

Plaintiffs submit photographs of certain doors at Shokan's facility, which display what Plaintiffs call "signs" and Defendants refer to as "stickers". See Exs. BB and CC to Cook Decl; Transcript of Hearing, Jan. 8, 2008, Audi AG v. Shokan Coachworks, Inc., 07-CV-173 (N.D.N.Y) ("Tr."), 38:7-17; 46:21-22. One photograph, which Plaintiffs claim is of "Shokan's Office Door," reveals the AUDI RING LOGO(r), and a separate sign or sticker below which includes the phrase, "AUDI PARTS WAREHOUSE" and "1-800-ALL-AUDI." See id. Ex. CC. The other photograph, which Plaintiffs claim is of the "Entry Door to Shokan's Dismantling Shop" reveals the phrase, "AUDI PARTS WAREHOUSE" and "1-800-ALL-AUDI." See id. Ex. DD.

Shokan employees Nancy Dow and Aaron Smith testified that the door with the AUDI RING LOGO(r) on it is actually Shokan's lunchroom door. See Dow Dep., 31:4-22, at Ex. 35 to Supplemental Smith Decl.; A. Smith Dep., 60:7-20, at Ex. 36 to Supplemental Smith Decl. Defendants submit photographs of what Smith contends is Shokan's lunchroom, which includes the door identified by Plaintiffs as "Shokan's Office Door." See Smith Decl. ¶ 89, Ex. 24.

Defendant Smith contends that customers may purchase Audi parts from Shokan only over the Internet or by telephone, and not at Shokan's facility, but that under certain circumstances, customers may enter the Shokan facility to pick up a part which has been previously purchased. See Smith Decl. ¶¶ 15-17. Plaintiffs submit copies of several Shokan emails providing driving directions to Shokan's facility, which Plaintiffs say demonstrates that "a significant number" of customers -- at least forty three -- visited the Shokan facility during the period June 13, 2005 through September 19, 2007. See Pls.' Resp. to Defs.' Statement of Material Facts, ¶¶ 22-23; Ex. MM to Cook Decl. Smith contends, however, that "[f]ar less than 1% of the parts sold by Shokan are picked up by a customer." Id. ¶ 18. Moreover, according to Smith, a customer who enters Shokan's facility is not permitted to browse or shop. See id. ¶ 19.

Smith also declares that no customer has ever been inside the employee lunchroom, and that customers are not permitted to enter an area of Shokan's facility where the lunchroom door can be seen. See Smith Decl. ¶¶ 47-48. Defendants note Dow's testimony that she is not aware that anyone other than a Shokan employee has ever been in the lunchroom. See Dow Dep., 47:17-25, at Ex. 35 to Supplemental Smith Decl. However, Dow also testified that when someone comes to the Shokan facility for a meeting, the meeting would "possibly" take place in the lunchroom. See Dow Dep., 30:8-31:3, Ex. SS to Cook Decl.

Smith further contends that "Shokan does not use any signage at its facility that can be viewed by the public." Smith Decl. ¶ 49. Dow testified that when a customer comes to Shokan's facility to pick up a part, the customer goes "[i]mmediately inside the shop door." Dow Dep., 44:17-19, Ex. SS to Cook Decl.

Use of "Audi Parts Warehouse"

According to defendant Smith, in 1991, Shokan forwarded to Audi for approval a shipping box that Shokan intended to use to deliver Audi parts, which included the phrase, "AUDI PARTS WAREHOUSE." See Smith Decl. ¶ 65; Ex. 16. The phrase, "AUDI PARTS WAREHOUSE" also appeared in the July, August and September 1990 Car and Driver advertisements as well as the Fall 1997 Quattro Quarterly advertisement. See id. Exs. 17, 18. Scipione notes that by the terms of the Settlement Agreement, Shokan was permitted to use their remaining inventory of boxes for six months, and that subsequent to the six-month period, Audi did not approve Shokan's use of "Audi Parts Warehouse". See Nov. 30, 2007 Scipione Decl.,¶ 4, Dkt. No. 109-2. See also Scipione Dep., 88:19-89:25, Ex. WW to Cook Decl., Dkt No. 109-8. Audi's in-house counsel, Debra Kingsbury, testified that the Settlement Agreement permits Shokan's use of their boxes after the six-month period, as long as the infringing Shokan Logo is masked by tape or an adhesive label. See Kingsbury Dep., 94:24-98:11, Ex. XX to Cook Decl. Dkt. No. 109-9. See also Ex. O to Cook Decl.

The advertisement which appeared in the April 3, 1989 issue of Autoweek included the phrase, "USED PARTS WAREHOUSE" underneath a much larger, bold-faced "AUDI" in block lettering. See id. Ex. 9. Plaintiffs thereafter objected in writing to, among other ...

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