Safeway Transit LLC v. Discount Party Bus, Inc.

Background

Safeway Transit LLC, operated by Aleksey Silenko, and the defendants operated competing party-bus businesses. Safeway claimed rights in the unregistered descriptive marks “Rent My Party Bus” and “952 Limo Bus.” The remaining claims at trial were federal trademark infringement under the Lanham Act and a Minnesota deceptive-trade-practices claim. Safeway also sought a permanent injunction, defendants’ profits, and attorney fees.

The court found that Discount Party Bus, Inc. and Party Bus MN LLC operated as a single entity, with Adam Fernandez as their sole owner, officer, manager, and employee. The defendants had used the terms in print advertising before Safeway did, but stopped using them no later than 2009 because Safeway had begun using them. Safeway used “Rent My Party Bus” continuously beginning in 2008 and “952 Limo Bus” beginning in 2011, including on buses, websites, domain names, social-media accounts, and advertising.

Trademark validity

Because the marks were descriptive, Safeway had to prove that they acquired “secondary meaning” before the alleged infringement. Secondary meaning exists when consumers associate a mark with a single source of goods or services. The court found that the defendants abandoned any trademark rights they may have had by no later than 2009 because they stopped using the terms and Fernandez had no intent to resume using them, including when the marks were registered in 2014.

The court also found that Safeway proved secondary meaning by a preponderance of the evidence. Relevant evidence included Safeway’s substantially exclusive and continuous use, its use of the terms as business names and on buses and domain names, its advertising, growing consumer engagement on social media, and the growth of its fleet. The court found that Safeway established secondary meaning for both marks before the alleged infringement period.

Infringement and personal liability

The court found that the defendants used both marks in commerce in 2015. Through a web-marketing company, they launched a website that displayed the marks in page URLs, text, and hyperlinks and also used the marks as hashtags on Facebook and Twitter.

Applying the likelihood-of-confusion factors, the court found that the marks were moderately strong in the Twin Cities, identical to the defendants’ uses, used by direct competitors, and likely to confuse ordinary customers selecting party-bus services online. The court also found that Fernandez’s knowledge of Safeway’s continuous and substantially exclusive use supported an inference that he intended to confuse the public. Although there was no evidence of actual confusion and the confusion was probably minimal, the court concluded that the defendants’ use was likely to cause confusion.

Because Fernandez signed the contract that led to the infringing content and participated in the infringement, the court held him personally liable for the defendants’ trademark infringement.

Relief

The court granted Safeway’s request for a permanent injunction. The injunction applies to Discount Party Bus, Inc., Party Bus MN LLC, Adam Fernandez, and people acting in active concert or participation with them. It bars use of or contribution to the use of “Rent My Party Bus” and “952 Limo Bus,” or related domain names, keywords, or hashtags, in connection with advertising, marketing, or selling transportation services.

The court denied Safeway’s request for an accounting of profits. It reasoned that the likely confusion was probably minimal, the record did not show unjust enrichment or damages, and an injunction was sufficient to deter future infringement. The court also denied attorney fees, finding that the case was not “exceptional.” Although it criticized the defendants’ effort to regain control of the marks, it found Fernandez’s explanation plausible and noted that Safeway was not an entirely innocent actor.

Order

The court denied the defendants’ oral motion for judgment on partial findings under Federal Rule of Civil Procedure 52(c). It entered judgment for Safeway and Silenko against the defendants on the remaining claims, granted the permanent injunction, denied the accounting-of-profits request, and denied the attorney-fee request.