Volkswagen & Audi|Win Trademark Ruling

(CN) - A company that sells unauthorized Volkswagen and Audi accessories infringes on the dealers' trademarks, even though the actual logo badges are authentic, the 9th Circuit ruled.

Au-tomotive Gold has been selling license plates, license plate frames and key chains bearing Volkswagen and Audi trademarks since the 1990s without the dealers' consent.

Gold's marquee license plates have actual VW badges that Gold bought on the open market, which are usually used as replacements for real Volkswagen products. The rest of Gold's products are replicas.

Gold included with the packaging a note to buyers that the product was not an original and had no relation to the real Volkswagen distributor. The company refused more than one request by Volkswagen to stop using its trademarks after the dealer found out what Gold was doing in 1999.

Volkswagen sued for trademark infringement, and Gold won in federal court. But on remand from the 9th Circuit, U.S. District Judge Frank Zapata ruled that Gold's "first-sale" argument did not protect it from the infringement claims, because the plates likely lead to confusion about their origin. A first-sale defense protects a company from infringement claims if the company first bought the authentic product, altered it and then resold it.

The federal judge in Arizona ordered Gold to stop using the dealers' trademarks.

On the second appeal, a three-judge panel in San Francisco agreed with Zapata's finding that Gold violated Volkswagen and Audi's trademarks by using them on its own products for profit.

"Shorn of their disclaimer-covered packaging, Auto Gold's products display no indication visible to the general public that the items are not associated with Audi or Volkswagen," Judge William Fletcher wrote, quoting the panel's first decision.

"It is likely that a person on the street who sees an Auto Gold marquee license plate with a VW badge will associate the plate with Volkswagen," Fletcher added. "Indeed, customers buy marquee license plates principally to demonstrate to the general public an association with Volkswagen."

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