Amplify Car Wash Advisors LLC v. Car Wash Advisory LLC

Background

Amplify Car Wash Advisors LLC sued Car Wash Advisory LLC (CWA) and Harry Caruso over CWA’s purchase of the domain name “amplifycarwash.com.” Amplify alleged cybersquatting, trademark infringement, unfair competition, and tortious interference with prospective economic advantage. Amplify moved for partial summary judgment on its cybersquatting and trademark infringement claims and also argued that Caruso should be personally liable.

Amplify provides mergers-and-acquisitions, capital-advising, site-selection, and financial services for car wash businesses and operates through “amplifywash.com.” CWA provides car wash businesses with services related to mergers and acquisitions, raising capital, and investment, and operates through “carwashadvisory.com.” Both companies exhibited at the same car wash industry convention in November 2021. The day after the convention, Caruso used his personal PayPal account to purchase “amplifycarwash.com,” “amplifywashes.com,” and “amplifycarwashes.com.” For a period, “amplifycarwash.com” redirected visitors to CWA’s website. CWA also purchased “commercialpluscarwash.com” and owned approximately seventy-five domain names while maintaining three websites.

Trademark infringement

The court applied the Lanham Act’s test for trademark infringement, which required Amplify to show that it had a protectable mark, that the defendants used the mark in commerce without consent, and that the use was likely to cause consumer confusion.

The court held that “amplify” and “amplify car wash advisors” were suggestive marks. In other words, they suggested qualities of Amplify’s advisory business without directly describing a category of products or services. Suggestive marks are inherently distinctive and do not require proof that consumers had acquired a secondary association with the mark.

The court found that the defendants used Amplify’s marks in commerce because both companies operated commercial websites and, at a minimum, CWA temporarily used the disputed domain to redirect traffic to its own website. Applying the multi-factor test used to assess likely consumer confusion, the court found that the marks and domain name were highly similar, the parties offered overlapping services in the same industry, and the defendants acted in bad faith. Although there was no evidence of actual consumer confusion and the sophistication of the relevant buyers favored the defendants, those factors did not outweigh the other considerations. The court therefore granted summary judgment on the trademark infringement claim.

Cybersquatting

The court also granted summary judgment on Amplify’s claim under the Anticybersquatting Consumer Protection Act. That law requires proof that the mark is distinctive or famous, that the domain name is identical or confusingly similar to the mark, and that the defendant acted with a bad-faith intent to profit.

The court found that Amplify’s marks were inherently distinctive, that “amplifycarwash.com” was clearly confusingly similar to them, and that CWA and Caruso had no intellectual-property rights in the marks. The court also found that CWA had not used the domain in connection with a genuine offering of goods or services or for a legitimate noncommercial or fair use.

In assessing bad faith, the court relied on the purchase of three Amplify-related domains within twenty-four hours after Caruso encountered Amplify, the later purchase of a domain containing the mark of a closely related business, the temporary redirection of the disputed domain to CWA’s website, and Caruso’s testimony that the domains were purchased partly to prevent others from having them and to benefit his business. The court also considered the defendants’ offer to surrender the domains in exchange for Amplify’s discontinuing its use of “car wash advisors.” Considering the circumstances as a whole, the court found bad-faith intent as a matter of law.

Caruso’s individual liability

The court ruled that Caruso should be held individually liable for CWA’s trademark infringement and cybersquatting. It relied on evidence that Caruso was CWA’s sole founder, equity owner, and manager; had sole authority to make binding decisions for CWA; purchased the domains using his personal PayPal account; and testified about his reasons for purchasing domains. The court concluded that this evidence showed that Caruso authorized and approved the conduct underlying CWA’s liability.

Disposition

The court granted Amplify’s motion for partial summary judgment and directed the Clerk to close the motion. The opinion does not state a ruling on Amplify’s other claims or specify an award of damages or other remedies.