Gen. Petroleum GmbH v. Stanley Oil & Lubricants, Inc.

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GENERAL PETROLEUM GmbH, Plaintiff, v. STANLEY OIL & LUBRICANTS, INC., Defendant.

No. 2:24-CV-02324-NRM-LGD

United States District Court, E.D. New York

September 11, 2024

OPINION & ORDER

NINA R. MORRISON, United States District Judge

This proceeding concerns a commercial dispute between Plaintiff General Petroleum GmbH (“General Petroleum”), a German-based manufacturer of automotive, industrial, and marine lubricants, and Defendant Stanley Oil &amp Lubricants, Inc. (“Stanley Oil”), a New York-based distributor and manufacturer of lubricants. General Petroleum alleges that Stanley Oil, which began distributing General Petroleum's lubricant products in 2019, is now “manufacturing, importing, advertising and distributing counterfeit and infringing products, under the guise that such products are General Petroleum's legitimate products when they are not.” Pl.'s Mem in Supp. of Mot. Prelim. Inj. (“Pl.'s Mem.”) at 1, ECF No. 12-1.

After filing suit in this Court against Stanley Oil for federal and state claims for counterfeiting, trademark and copyright infringement, cancellation of trademark registration, unfair competition, deceptive trade practices, breach of contract and cybersquatting, General Petroleum now seeks a preliminary injunction enjoining Stanley Oil from manufacturing importing, distributing and/or selling any products using General Petroleum's trademarks, or any confusingly similar marks, and freezing Stanley Oil's assets related to its counterfeiting and other illegal activities. For the following reasons, Plaintiff's motion for a preliminary injunction is GRANTED.

BACKGROUND

I. The Parties

Plaintiff General Petroleum is a German limited liability company with a principal place of business in Frankfurt am Main, Germany.^[1] Compl. ¶ 4. Founded in 1999, it operates in more than thirty-five countries around the world and offers automotive, industrial, and marine lubricants. Declaration of General Petroleum Employees Ghiyas Ud Din, Muhammad Zafar Iqbal, and Wajahat Haider (“GP Decl.”) ¶¶ 4-5, ECF No. 12-3. It often operates through wholesale customers that purchase and resell its products. Id. ¶ 10. General Petroleum operates jointly with and conducts the same business activities as General Petroleum FZE, a company based in the United Arab Emirates (“UAE”) and owned by Habib Khan, who also owns Plaintiff General Petroleum. Declaration of General Petroleum Operations Manager Ghiyas Ud Din (“Ud Din Decl.”) ¶ 37, ECF No. 23-1.

General Petroleum claims that the first use of its name and brand in the United States occurred in connection with its certification from the American Petroleum Institution in May 2010. Ud Din Decl. ¶ 9. Having operated widely in international markets, it began advertising and selling its products in the United States “since at least as early as 2019.” Id. ¶ 3.

Defendant Stanley Oil is a New York corporation with a principal place of business at 8 Legend Circle, Melville, New York, 11747. Declaration of Stanley Oil Chief Executive Officer and Shareholder Syed L. Hasnain (“Hasnain Decl.”) ¶ 2, ECF No. 22-1. Stanley Oil Chief Executive Officer (“CEO”) Syed L. Hasnain (“Hasnain”) formed Stanley Oil on June 10, 2019, to “import[] lubricating oils and greases from the [UAE] into the United States.” Hasnain Decl. ¶¶ 6-7.

II. General Petroleum's Marks and Website

The trademark-infringement and unfair-competition claims in this litigation concern several General Petroleum marks (the “General Petroleum Marks”). Two of these marks are now registered with the United States Patent and Trademark Office (“USPTO”), and General Petroleum claims rights in common law in another of these Marks. Compl. ¶¶ 18-21. General Petroleum asserts that it holds common-law rights in a trademark of its name “GENERAL PETROLEUM” (“GENERAL PETROLEUM Mark”) based on its advertising and sale of products in the United States under the Mark since 2019. GP Decl. ¶ 5. General Petroleum has also advertised its products on its website located at the domain GENERALPETROLEUM.DE (“General Petroleum Domain”). Id.

Moreover, General Petroleum has adopted a “larger family” of “design marks” to promote its goods and services to customers. Id. ¶ 7. General Petroleum registered the first at-issue design mark (“GP Design Mark I”) with the World Intellectual Property Organization (“WIPO”) at Reg. No. 1051455 on September 16, 2010. Ud Din Decl. ¶ 22. On July 25, 2016, General Petroleum filed a trademark application of Serial Number 79195520 with the United States Patent and Trademark Office (“USPTO”) for the same Mark. GP Decl. Ex. A. The USPTO subsequently registered the Mark on September 19, 2017. Id. GP Design Mark I includes the General Petroleum logo, its name below the design, and a “GP” at the top right. GP Decl. ¶ 7.

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III. The Formation of the Parties' Business Relationship

The parties' business dealings began in summer 2019. Hasnain states that he decided to visit the UAE in June 2019 to “identify[] and secur[e] a reliable source from which Stanley Oil could purchase engine oils and lubricants” from “manufacturers and suppliers of lubricating oils and greases.” Hasnain Decl. ¶ 8. On June 26, 2019, General Petroleum Operations Manager Ghiyas Ud Din (“Ud Din”) met with Hasnain in General Petroleum's offices in the Hamriyah Free Zone in Sharjah, UAE. Ud Din Decl. ¶ 6. According to Ud Din, Hasnain expressed interest in bringing General Petroleum's products to the United States. Id. Hasnain followed up on June 27, 2019, with a WhatsApp message asking Ud Din to discuss “GP brand promotion in USA” with General Petroleum management. Id.

Following his meeting with General Petroleum employees, Hasnain “made the executive decision that, going forward, Stanley Oil would purchase engine oils from General Petroleum FZE.” Hasnain Decl. ¶ 12. To that end, in August 2019, Stanley Oil submitted its first order for nearly $24,000 worth of industrial General Petroleum products with an advanced cash payment. Ud Din Decl. ¶ 7; GP Decl. ¶ 11; Compl. ¶ 33. On August 13, 2019, General Petroleum informed Hasnain that it received a DEXOS certification - a performance-based standard for engine oils - from General Motors earlier that day. Ud Din. Decl. ¶¶ 7-8.

In August 2019, General Petroleum shipped the industrial products to Stanley Oil in New York. GP Decl. ¶ 12; Compl. ¶ 33. On August 26, 2019, Hasnain formed GENERAL PETROLEUM USA INC. as a business corporation under New York law. Hasnain Decl. ¶ 13, Ex. 2. The first shipment of General Petroleum products arrived with Stanley Oil in New York on or about October 1, 2019. Ud Din Decl. ¶ 10.

“Over the following years, Stanley Oil placed numerous large-scale orders for General Petroleum products, which were again shipped to Stanley Oil.” GP Decl. ¶ 13. Relevant to this litigation, General Petroleum described its relationship with Stanley Oil as one of manufacturer-distributor, with “General Petroleum grant[ing] Stanley Oil a limited license to use the GP Marks solely in connection with the offering and sale of General Petroleum's products.” Ud Din Decl. ¶ 11. From 2019 until 2022, General Petroleum sent delivery orders displaying its logo and name to all customers for deliveries in the United States, performed all quality control measures for its products (without receiving any requests for modification from Stanley Oil), and included its email address in all product packaging sold to customers in the United States, which would have directed customer questions or complaints concerning the products to General Petroleum. Id. ¶¶ 17-18.

IV. Registration of the Stanley Oil GP Mark

On September 9, 2019, Stanley Oil filed an intent-to-use application for registration of a trademark with the USPTO on the Principal Register, which received the Serial Number 6154962 (“Stanley Oil GP Mark”). Hasnain Decl. ¶ 14; Compl. ¶ 36. Hasnain contends that this was the first use of the Mark in the United States. Id. ¶¶ 15-19. The Stanley Oil GP Mark displays the letters “GP.” GP Decl.

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Ex. C.

General Petroleum asserts that Stanley Oil neither advised General Petroleum it had filed for the Mark nor sought its consent prior to filing for registration. GP Decl. ¶¶ 14-17. Moreover, General Petroleum contends that the “specimen” - a bottle of high-performance, fully synthetic engine oil called “PETROGEN” - that Stanley Oil included in its 2019 application for registration was one of General Petroleum's own products. GP Decl. ¶ 16, Ex. C. While General Petroleum does not specify the precise date it learned of Stanley Oil's registration of the GP Mark, it claims that it did not learn about it until sometime in 2021. Compl. ¶ 38.

V. The Parties' Ongoing Business Relationship

Communications between the parties continued after the first shipment of General Petroleum goods arrived in New York in October 2019. On October 28, 2019, General Petroleum informed Hasnain of its global WIPO registration of GP Design Mark I via WhatsApp message. Ud Din Decl. ¶ 22.

On February 24, 2020, Ud Din sent Hasnain a distribution agreement (“Distribution Agreement”). Ud Din Decl. ¶ 13, Ex. A. The email asked Hasnain to sign and stamp it. Ud Din Decl. ¶ 13. Paragraph 10 of the distribution agreement states that both parties acknowledge that General Petroleum “is the exclusive owner of its trademarks, brand names and company name” and Stanley Oil “shall not infringe or cause to be infringed [General Petroleum's] brands and marks in the territory or anywhere else in the world.” Id. It provided further that the Agreement “does not expressly or implicitly, grant a Trademark License to [Stanley Oil].” Id. However, the parties never executed the distribution agreement. Pl.'s Reply in Supp. Of...