Safeway Transit LLC v. Disc. Party Bus, Inc.

Safeway Transit LLC and Aleksey Silenko, Plaintiffs, v. Discount Party Bus, Inc., Party Bus MN LLC, and Adam Fernandez, Defendants.

Case No. 15-cv-3701 (JRT/HB)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

July 31, 2017

REPORT AND RECOMMENDATION

Chad A. Snyder and Michael H. Frasier, Rubric Legal LLC, 233 Park Avenue South, Suite 205, Minneapolis, MN 55415, for Safeway Transit LLC and Aleksey Silenko

Adam Edward Szymanski, Casey A. Kniser, and Eric H. Chadwick, Patterson Thuente Christensen Pedersen, PA, 80 South Eighth Street, Suite 4800, Minneapolis, MN 55402, for Discount Party Bus, Inc., Party Bus MN LLC, and Adam Fernandez

HILDY BOWBEER, United States Magistrate Judge

This matter is before the Court on Plaintiffs' Motion for Partial Summary Judgment [Doc. No. 79]. Specifically, Plaintiffs move for partial summary judgment against Defendants on Count III of the Second Amended Complaint ("SAC") for trademark infringement under 15 U.S.C. § 1125(A), and on Count VII for restoration of their rights in the domain name rentmypartybus.com under 15 U.S.C. § 1114(2)(D)(v) [Doc. No. 8]. They also appear to seek a finding as a matter of law that as a result of the infringement, Plaintiffs are entitled to the entirety of Defendants' revenues for the period May 1, 2014-the date the complaint was filed on September 21, 2015. (Pls.' Mem. Supp. Mot. Summ. J. at 1-2 [Doc. No. 79].) The motion was referred to the undersigned for a Report and Recommendation under 28 U.S.C. § 636 and District of Minnesota Local Rule 72.1(a) [Doc. No. 89]. For the reasons set forth below, the Court recommends the motion be denied in its entirety.

I. Background

Plaintiffs and Defendants are fierce competitors in the business of providing "party buses" for hire. Plaintiffs' Second Amended Complaint ("SAC") accuses Defendants of attempting to steal Plaintiffs' business by infringing Plaintiffs' trademarks "Rent My Party Bus," "952 LIMO BUS," and "Party Bus MN," and by fraudulently registering them as Defendants' own. (SAC ¶¶ 1, 59-65, 70-74 [Doc. No. 8].) Plaintiffs also allege Defendants attempted to steal the associated web domains. (Id. ¶¶ 85-92.) In addition to the counts for trademark infringement and domain "hijacking" that are the subject of the instant motion, the SAC alleges causes of action for fraudulent federal registration of trademarks, cancellation or assignment of federal registration, cancellation of state registration for trademarks, fraudulent state registration for trademarks, and violation of Minnesota Statute § 325D.44 [Doc. No. 8].

A. Safeway Transit

In 2008, Gennady Silenko formed the company Party Bus MN LLC. Plaintiff Aleksey Silenko was identified in the Articles of Organization as the company's contact. (Frasier Decl. Ex. A (2008 Articles of Organization for Party Bus MN LLC) [Doc. No. 81-1].) In October of that year, the name of the business was changed to Safeway Transit LLC. (Frasier Decl. Ex. B (Articles of Organization for Safeway Transit LLC) [Doc. No.81-1].) Plaintiffs' business has grown over the years, starting with one bus in 2008 and currently running a fleet of sixteen buses. (Silenko Decl. ¶ 11 [Doc. No. 82].)¹

In 2008, Plaintiffs purchased the domains www.RentMyPartyBus.com and www.PartyBusMN.com. (Frasier Decl. Ex. C (Receipts from GoDaddy) [Doc. No. 81-1].) Plaintiffs used www.PartyBusMN.com as a landing page to direct users to www.RentMyPartyBus.com. (Silenko Decl. ¶ 4.) Plaintiffs also launched Facebook pages using both marks² that year, one at www.Facebook.com/RentMyPartyBus and the other at www.Facebook.com/PartyBusMN. (Silenko Decl. ¶ 6.) In 2015, Plaintiffs merged the latter page into the former page, and Silenko states in his declaration that the Facebook page currently has 28,000 followers. (Id.) In addition, from 2008 to the present, "at least some of Safeway Transit's buses" have prominently displayed "Rent My Party Bus" on the side or back of the bus.³ (Silenko Decl. ¶ 5.)

In 2009, Silenko purchased business cards for Safeway Transit "using the names Rent My Party Bus and Party Bus MN." (Silenko Decl. ¶ 7.) He has continuously used those business cards since then. (Silenko Decl. ¶ 7.) The next year, he "created Twitter handles for Rent My Party Bus and Party Bus MN," and has used both Twitter accounts consistently since, although his declaration does not indicate how frequently he uses those accounts or how many followers they have. (Silenko Decl. ¶ 8.)

In 2011, Safeway Transit acquired the phone number (952) 546-6287 (952 LIMO BUS). Silenko purchased the domain www.952LimoBus.com, built that website, and purchased business cards with that name.⁴ (Silenko Decl. ¶ 9.) Safeway Transit "began placing decals with the names 952 LIMO BUS and Party Bus MN on the outside and interior of some of the buses" in 2011 or early 2012, and continues to do so today. (Silenko Decl. ¶ 10.) Safeway Transit expanded its marketing of all three marks in 2013 by purchasing advertising on the radio, in print publications like City Pages, All Over Media, and Lavender, and online at sites such as The Knot, Wedding Wire, Limos.com, White Sparks, and Yext. (Silenko Decl. ¶ 11.)

Silenko's declaration does not provide any detail, however, as to how much money has been spent on that advertising, how frequently it appeared in which media, how many individuals were exposed to the advertising, or to what extent any particularmark was featured in the advertising. Moreover, Plaintiffs did not submit any examples or specimens of their own advertising or promotional materials depicting any of the asserted marks.

Nothing in the record indicates that Plaintiffs have at any time attempted to register Rent My Party Bus, 952 LIMO BUS, or Party Bus MN as trademarks with the State of Minnesota or with the United States Patent and Trademark Office (USPTO).

B. Discount Party Bus

Adam Fernandez is the sole owner and officer of Discount Party Bus, Inc., and Party Bus MN LLC. (Frasier Decl. Ex. E at 86:7 (Fernandez Dep.) [Doc. No. 81-1].) He states he first started his party bus rental service in 2000 or 2001 under the name Discount Party Bus, which he operated initially as a sole proprietorship. He later converted it to an LLC and then to a corporation. (Frasier Decl. Ex. D ¶¶ 3-4 (2014 Fernandez Aff.)⁵ [Doc. No. 81-1].) Fernandez testified in his deposition as the Rule 30(b)(6) representative for all Defendants in this case that he began using the name "Party Bus MN LLC" in connection with his business in 2000 (Frasier Decl. Ex. E at 53:22-25 (Fernandez Dep.)), and that today, Discount Party Bus and Party Bus MN LLC are separate active entities but operate as one company. (Id. at 10:1-12:9.)

In sworn answers to interrogatories, Defendants state they have continuously used Party Bus MN in print and Internet advertising from 2000 or 2002 to the present; that they used Rent My Party Bus in print advertising from 2004 to 2008 or 2009; and thatthey used 952 LIMO BUS (and, it appears, 612 LIMO BUS, 763 LIMO BUS, and 651 LIMO BUS as well) in print and Internet advertising and in business cards, letters, and emails from 2006 to 2008 or 2009.⁶ (Frasier Decl. Ex. G (Defendants' Responses to Plaintiffs' Interrogatories Nos. 1, 2, 4, 5, and 6) [Doc. No. 81-1].) Fernandez's testimony, while often vague and confusing, was, for the most part, consistent with the interrogatory responses as to the claimed dates of use in advertising. (Frasier Decl. Ex. E at 53:16-25, 57:6-16 (Fernandez Dep.) (used Party Bus MN as a business name from 2000-through the date of deposition, but stopped using Party Bus MN to advertise his business after Plaintiffs began using the website with the same domain name); id. at 60:10-22 (used Rent My Party Bus from 2004 through 2008 or 2009); id. at 61:2-25, 62:1-3 (used 952 LIMO BUS from at least 2004 through 2008 or 2009).)

Plaintiffs dispute Defendants' claim that Defendants began using any of the marks as actual trademarks, or even as business names, before Plaintiffs began to do so, but point out that, in any event, Fernandez testified he stopped using Rent My Party Bus and 952 LIMO BUS to advertise party bus services in 2008 or 2009. (Frasier Decl. Ex. E at 60:10-22, 61:2-25, 62:1-3 (Fernandez Dep.).) Fernandez further testified that he stopped using 952 LIMO BUS in his advertising because he saw that Plaintiffs had begun to use it. (Id. at 65:4-11.) He testified he stopped using Party Bus MN in advertising when Plaintiffs launched a website with the same name, but has continuously used Party Bus MN as a business name from 2002 to the present. However, he did not actually form alimited liability corporation named Party Bus MN LLC until May 1, 2014. (Frasier Decl. Ex. F (2014 Articles of Organization for Party Bus MN LLC); Frasier Decl. Ex. E at 15:17-17:3 (Fernandez Dep.); see also Kniser Decl. Ex. E at 4 (Certificate of Business Organization) [Doc. No. 86-5]; Frasier Decl. Ex. E at 54:20-55:3 (Fernandez Dep.); Frasier Decl. Ex. F (2014 Articles of Organization for Party Bus MN LLC).)

Defendants also point to several documents they contend evidence their use of these marks prior to Plaintiffs' use:

• Two documents bearing October 2004 dates, one a letter addressed to the attention of Adam Fernandez at "Party Bus MN LLC" from an entity offering to provide drug and alcohol testing services, and the other a contract for those services signed by Fernandez "For Party Bus MN LLC." (Kniser Decl. Ex. B [Doc. No. 86-2].)⁷

• An advertisement displaying "Rent My Party Bus" with Fernandez's telephone number, identified by Fernandez at his deposition as a print advertisement or flyer created in "late 2000 sometime, . . . '08, '09, '10, in that area." (Kniser Decl. Ex. C (Fernandez Dep. Ex. 19) [Doc. No. 86-3]; Kniser Decl. Ex. F at 164-68 (Fernandez Dep.) (referring to Ex. 19).)

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(Frasier Decl. Ex. W at 187 [Doc. No. 81-1].)

• Fernandez testified this advertisement ran in print publications, and

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