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ROLLS-ROYCE PLC v. LUXURY MOTORS

June 16, 2004.

ROLLS-ROYCE PLC; ROLLS-ROYCE MOTOR CARS, LTD.; and ROLLS-ROYCE MOTOR CARS NA, LLC, Plaintiffs,
v.
LUXURY MOTORS, INC., Defendant.



The opinion of the court was delivered by: JOHN W. DARRAH, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs filed suit against Defendant, Luxury Motors, Inc., alleging trademark infringement and false designation of origin and unfair competition in violation of the Lanham Act. Plaintiffs also sought a preliminary and permanent injunction against Luxury Motors' use of the Plaintiffs' trademarks. Luxury Motors seeks to dismiss or stay the action pursuant to the doctrine of primary jurisdiction or the Colorado River abstention doctrine.

A reading of the Complaint supports the following summary of the alleged conduct of the parties.

  Rolls-Royce Motor Cars, NA ("Rolls") is the sole authorized distributor of Rolls-Royce cars in the United States and has the exclusive right and license to use and control Rolls-Royce marks for automotive use within North America pursuant to an agreement with Rolls-Royce Motor Cars, Ltd. These marks include the Rolls-Royce word mark, the "Rolls-Royce Badge," and the "Rolls-Royce Monogram." The marks are distinctive, valid, and enforceable and enjoy an exceedingly valuable reputation and goodwill in the Untied States not only among purchasers of their products but also among other members of the public at large.

  In 1998, Rolls entered into a licensing agreement with Bentley which granted Bentley a limited license for the automotive use of Rolls-Royce marks during the life of the licensing agreement. At midnight, December 31, 2002, the licensing agreement terminated, leaving Bentley without any rights to continue to use the Rolls-Royce marks. Also, from 1998 to December 31, 2002, Bentley Motors, Ltd. produced Rolls-Royce passenger cars and distributed them in North America. During that time, none of the Plaintiffs had any ownership or affiliation with Bentley's manufacturing facilities.

  Luxury Motors is an automobile dealer in Downers Grove, Illinois. Luxury Motors entered into a 2002 dealer agreement with Bentley through a subsidiary of Bentley. Neither Bentley nor its subsidiaries have any connection to the Plaintiffs. Luxury Motors' Dealer Agreement with Bentley, expressly stated that it would expire on December 31, 2002, unless superseded by a new dealer agreement with Bentley at an earlier date.

  In early 2002, Luxury Motors submitted a proposal to Rolls seeking to become an authorized Rolls-Royce dealer once Rolls-Royce Motor Cars, Ltd. began producing the redesigned Rolls-Royce Phantom for distribution in the United States. Rolls did not accept Luxury Motors' proposal and did not select Luxury Motors to be an authorized dealer of Rolls-Royce Motor Cars.

  In February 2003, Luxury Motors filed a complaint with the Illinois Motor Vehicle Review Board ("IMVRB"), seeking to have Rolls tender a franchise renewal or otherwise comply with the parties' franchise agreement. The complaint alleged that Rolls-Royce violated the Illinois Motor Vehicle Franchise Act ("IMVFA") by failing to tender a renewal of the franchise agreement without Luxury Motors' receiving a formal notice of termination or nonrenewal. This complaint remains pending before the IMVRB.

  In March 2003, counsel for Luxury Motors received written notice from Rolls that Bentley, and consequently Luxury Motors, had no rights to use the Rolls-Royce marks. Notwithstanding that notice, Luxury Motors continued to use the Rolls-Royce mark and hold itself out as an authorized Rolls-Royce passenger car dealership.

  On August 22, 2003, Plaintiffs filed the instant Complaint. On October 28, 2003, the Court entered the parties' Agreed Preliminary Injunction Order which enjoined Luxury Motors from using or affixing Plaintiffs' trademarks and holding itself out to customers that it was an authorized Rolls-Royce dealer.

  Luxury Motors argues that the present case should be stayed pursuant to the doctrine of primary jurisdiction.

  The doctrine of primary jurisdiction is actually two doctrines. See Arsberry v. Illinois, 244 F.3d 558, 563 (7th Cir. 2001) (Arsberry). In its original form, the doctrine applies only when an issue arises that is within the exclusive original jurisdiction of the regulatory agency, although the agency's resolution of the issue will usually be subject to judicial review. See Arsberry, 244 F.3d at 563. In such a situation, the suit is stayed and the issue is decided by the agency. Once the agency decides this exclusive issue, the suit may proceed. See Arsberry, 244 F.3d at 563.

  Here, Luxury Motors has alleged before the IMVRB that because Luxury Motors was not provided notice of termination of the franchise agreement, as required by the IMVRA, the franchise agreement remains in effect. The issue of whether the Defendants failed to comply with the IMVFA is not within the exclusive jurisdiction of the IMVRB. See 815 ILCS 710 et seq. Accordingly, Luxury Motors' IMVFA claim does not fall within the primary jurisdiction doctrine in its original form.

  The primary jurisdiction doctrine has also been defined as a doctrine that allows a court to refer an issue to an agency that has specialized knowledge about the issue, even if the agency has not been given exclusive ...


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