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Buyfigure.Com., Inc. and David W. Kern v. R.M. Hollenshead Auto Sales & Leasing

December 20, 2010

BUYFIGURE.COM., INC. AND DAVID W. KERN,
PLAINTIFFS,
v.
R.M. HOLLENSHEAD AUTO SALES & LEASING, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Goldberg, J.

MEMORANDUM OPINION

In this trademark infringement case, Plaintiffs, Buyfigure.com, Inc. and David Kern, seek to enjoin Defendants, R.M. Hollenshead Auto Sales & Leasing, Inc., Ebuyfigure.com, Inc., Robert M. Hollenshead, and Ronald S. Cureton, II, from using the domain name "buyfigure.com." Plaintiffs' complaint alleges trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a).

Before the Court is Defendants' motion for summary judgment and Plaintiffs' motion to amend the complaint. For the reasons set forth below, Defendants' motion will be granted and Plaintiffs' motion will be denied.

I. BACKGROUND

We have construed the following facts in a light most favorable to the non-moving party. Buyfigure.com, Inc. was formed in March 2000 by Plaintiff David Kern and Defendant Robert M. Hollenshead. The company intended to create an internet application that would allow automobile dealers to submit information online regarding trade-in vehicles. Upon submission, the program would then provide a value for that vehicle and Buyfigure.com, Inc. would guarantee to purchase the vehicle at that price. This application was intended to provide a method by which Buyfigure.com, Inc. could acquire trade-in vehicles to resell at large auto auctions. (Pls.' Memo., pp. 4-5; Defs.' Memo., p. 2.)

In early 2001, Kern and Hollenshead became the majority shareholders of Buyfigure.com, Inc. At that time, the company was still working on the internet application described above and was seeking capital investment by the Manheim Auto Auction. While working to launch the venture, Kern and Hollenshead were personally funding the company's operations. In May 2001, Kern recommended that the company terminate Defendant Ronald Cureton, an employee who had been running the computer end of the business. As Hollenshead did not want to be involved in this termination, he resigned as CEO and was replaced by Kern. Around the same time, Hollenshead left the company and stopped contributing capital, leaving Kern to operate the company on his own. (Pls.' Memo., p. 6, Defs.' Memo., p. 2.)

In the fall of 2001, Buyfigure.com, Inc. became a licensed dealer at the Manheim Auto Auction and was buying and selling cars through the application previously described. This revenue stream was short lived however, after Manheim Auto Auction barred Buyfigure.com, Inc. from doing further business at the auction. This action was allegely caused in part, by Hollenshead.

From March to May of 2002, Kern operated Buyfigure.com, Inc. at the State Line Auction in New York. The company continued to operate the system in Pennsylvania until 2003, but have not alleged any connection with an auto auction during that time. Plaintiffs contend that the system was utilized in connection with eimport4less.com and Damak Leasing after 2003, but do not provide any details on those business relationships or Buyfigure.com, Inc.'s involvement therein. (Pls.' Memo., pp. 7-8.)

Importantly, Plaintiffs admit that Buyfigure.com, Inc. and the website "www.buyfigure.com" have not done any business since September 2003. Similarly, Buyfigure.com, Inc. has not generated any income or revenue since September 2003, and Buyfigure.com, Inc.'s last filed tax return was filed in 2003. Despite these admissions, Plaintiffs allege that Kern attempted to market the concept after 2003. (Pls.' Admissions, ¶¶ 1-4.)

In mid 2005, Hollenshead, with the assistance of Cureton, launched the website "Ebuyfigure.com." "Ebuyfigure.com" provided appraisals of used cars through its website and was buying and selling cars at the Manheim Auto Auction in lanes marked "Ebuyfigure.com." This company became incorporated as a business entity in Pennsylvania on August 13, 2007. "Ebuyfigure.com" subsequently changed its name to "UsedCarInvoice.com" and "QuickQuote.com" and developed relationships with other vehicle trading websites and companies. (Pls.' Memo., pp. 8-9.)

We note that it is undisputed that the mark "buyfigure" was never registered with the United States Patent and Trademark Office and that a trademark application by Buyfigure.com, Inc. for the mark "buyfigure" has been abandoned since June 18, 2003. (Pls.' Admissions, ¶¶ 6-7.)

The complaint in question was filed on November 7, 2007, alleging that the business entity, "Ebuyfigure.com," through Hollenshead and Cureton, infringed on Plaintiffs' trademark in "buyfigure.com." On June 12, 2008, the Honorable Thomas M. Golden dismissed Counts I (RICO), III (Conversion), V (Breach of Contract), and VI (Breach of Fiduciary Duty) as time barred by the applicable statute of limitations. Judge Golden also dismissed Counts IV (Civil Conspiracy) and VII (Punitive Damages) for failure to state a claim upon which relief could be granted. Thus, the only cause of action remaining is Count II under the Lanham Act.

The case was transferred to the undersigned on November 14, 2008. Defendants R.M. Hollenshead Auto Sales & Leasing, Inc., Ebuyfigure.com, Inc., and Hollenshead filed the motion at issue on July 14, 2009. Defendant Cureton joined in the motion without filing a separate brief. While the motion for summary judgment ...


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