AMERICAN PETROLEUM INSTITUTE v. TAILOR MADE OIL CO, LLC et al

Filing 81

ORDER ON 9 PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION. **SEE ENTRY**. Signed by Judge Tanya Walton Pratt on 4/27/2012. (JD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
AMERICAN PETROLEUM INSTITUTE,

)
)
Plaintiff,
)
)
v.
)
)
TAILOR MADE OIL CO., LLC, TM OIL, LLC, )
CIRCLE TOWN OIL, WILLIAM R. SELKIRK, )
REBECCA SELKIRK, LINCOLN R.
)
SCHNEIDER, and JAFARIKAL CORPORATION, )
)
Defendants.
)

Case No. 1:11-cv-1386-TWP-TAB

ORDER ON PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
This matter is before the Court on Plaintiff’s Motion for Preliminary Injunction (Dkt. 9).
On October 18, 2011, Plaintiff American Petroleum Institute, Inc. (“API”) moved for entry on
preliminary injunctive relief against Defendants Tailor Made Oil Co., LLC (“Tailor Made”),
William and Rebecca Selkirk (the “Selkirks”), and Jafarikal Corporation (“Jafarikal”)
(collectively, “Defendants”). Defendants have not contested or otherwise failed to respond to
API’s Motion for Preliminary Injunction (the “Motion”). On February 28, 2012, this Court
ordered the parties to file a proposed order reflecting the relief requested by API in the Motion.
The parties jointly submitted a proposed preliminary injunction order to the Court on March 13,
2012; however, the parties were unable to agree on all aspects of the proposed order. After
carefully considered the parties’ respective arguments relating to their proposed preliminary
injunction order, this Order shall constitute the Courts’ findings of fact and conclusions of law.

I.
1.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

API is a District of Columbia corporation, with a business address at 1220 L

Street, N.W., Washington, D.C. 20005. API is the nation’s leading trade association for the
petroleum and natural gas industry.
2.

Tailor Made is a limited liability company of the State of Indiana with a business

address at 544 North Jacksonburg Road, Cambridge City, Indiana 47327. Tailor Made is in the
business of manufacturing and selling bulk lubricants.
3.

The Selkirks, are individuals domiciled in Cambridge City, Indiana. The Selkirks

are the owners of Tailor Made.
4.

William Selkirk is the registered agent for Tailor Made.

5.

Jafarikal Corporation is a corporation of the State of New York with a business

address at 240-10 142nd Avenue, Rosedale, New York 11422. Jafarikal is in the business of
distributing engine oil bottled by Defendant Tailor Made.
6.

The Court has jurisdiction over the subject matter of this action and the parties

consenting thereto.
7.

API is the leading trade association for the petroleum and natural gas industry in

the United Sates. API was established to afford a means of cooperation between the industry and
the government in all matters of national concern, foster foreign and domestic trade in American
petroleum products, promote the interests of the petroleum industry, and promote the
improvement of its members, and the study of the arts and sciences connected with the oil and
gas industry.
8.

For more than 90 years, API has used the trademarks and trade names

AMERICAN PETROLEUM INSTITUTE and API, together with its certification marks, for a

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wide variety of products, services, and programs aimed at the promotion, development, and
improvement of the petroleum and natural gas industry.
9.

Since 1947, API has published engine oil standards for automotive and heavy-

duty diesel engines. API’s engine oil standard, API 1509, is now in its 16th edition.
10.

Since 1985, API has operated a certification program for engine oils designed to

define, certify, and monitor engine oil performance deemed necessary for satisfactory equipment
life and performance by vehicle and engine manufacturers, as well as consumers. API’s Engine
Oil Licensing and Certification System (“EOLCS”) is a voluntary licensing and certification
program that authorizes engine oil marketers who meet specified requirements to use the API
Quality Marks.
11.

EOLCS licensed engine oils are tested for meeting one of a number of service

categories, as outlined in API’s “Motor Oil Guide.” Engine oils that meet the standards for a
service category may be identified by the performance standard of designation developed by
API, namely, the “S__” designation (“API Standard Engine Oil”). Each advance in engine
technology is reflected in a change of requirements and the second letter of the “S__”
designation.

For example, the initial “SA” designation is designated as the necessary

performance requirement by auto manufacturers for engines manufactured before 1930.
Between 2004 and October 2010, “SM” was designated as the necessary performance
requirement by most manufacturers for all engines built prior to 2010.
12.

API sets engine oil standards in an open, transparent process which includes all

interested parties, including oil companies, oil additive companies, and vehicle and engine
manufacturers. The performance requirements and test methods referenced in API engine oil
standards are established by vehicle and engine manufacturers and technical societies and trade

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associations such as the American Society for Testing and Materials (ASTM), Society for
Automotive Engineers (SAE), and American Chemistry Council (ACC).
13.

API licenses those engine oils that meet API’s engine oil requirements to

advertise this compliance by affixing the following famous, registered certification mark to the
containers for their goods:

Figure 1: API Certification Mark “Starburst”
14.

The API Starburst is a federally registered certification mark (Reg. No. 1864428)

used exclusively in connection with the certification of engine oils for motor vehicles in
International Class A.
15.

API also licenses those engine oils that meet API’s engine oil requirements to

advertise this compliance by affixing the following famous registered certification marks to their
goods:

Figure 2: API Service Symbol “Donut”

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16.

The API Donut is a federally registered certification mark (Reg. Nos. 1868779

and 1872999) used exclusively in connection with the certification of engine oils for motor
vehicles in International Class A.
17.

Pursuant to 15 U.S.C. § 1115(a), API’s federal registrations identified above

constitute prima facie evidence of API’s exclusive nationwide ownership of those registered
marks.

Moreover, all three registrations have become incontestable and thus constitute

conclusive evidence of API’s exclusive right to those registered marks.
18.

API also has common law rights in the following certification marks:

19.

Collectively, the registered and common law marks are herein referred to as the

“API Certification Marks.”
20.

Manufacturers that can properly establish compliance with the API requirements

are licensed to display the API Certification Marks on containers and packages of engine oil sold
to the public.
21.

API’s EOLCS certification program and related API certification Marks are of

vital importance to engine oil manufacturers, marketers, and consumers. An engine oil bearing
one or both of the API Certification Marks informs purchasers that the oil: (a) is interchangeable
or compatible with other engine oils, (b) has been formulated pursuant to recognized quality
management systems that are designed to ensure purity and reliability, and (c) meets industry

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standards that are designed to ensure that engines perform in a safe, efficient, and appropriate
manner and thereby reduce the potential for engine damage, and maximizes engine performance.
22.

According to API, Tailor Made and the Selkirks have manufactured and Jafarikal

has distributed engine oil bearing an API Certification Mark and alleged imitations of the API
Certification without authorization from API, as shown below:

Tailor Made and the Selkirks disagree with API’s claims in this regard, but do not contest
the entry of an injunction against them.
23.

API alleges that Tailor Made and the Selkirks have manufactured and Jafarikal

has distributed products marked as complying with API engine oil service category SM without
having conducted the tests required by API to establish that the engine oil meets service category
performance and quality requirements specified for SM. API further alleges that tested samples
of TAILOR MADE brand 10W30 SM product from Jafarikal failed to meet API certification
requirements or qualify for SM designation.
24.

Tailor Made and the Selkirks have made no substantive arguments opposing to

the entry of a preliminary injunction, but both Defendants continue to deny liability in this case.
25.

With respect to Jafarikal, it has failed to respond to the Motion for preliminary

injunction.

As such, Jafarikal has not responded to Plaintiff’s allegations of trademark

infringement and false advertising, as well as to Plaintiff’s argument regarding irreparable harm
and inadequate remedies at law with well reasoned and substantive arguments. Jafarikal’s failure

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to respond to the Motion pursuant to Local Rule 7-1(c)(2)(A) constitutes waiver. See Law v.
Medco Research, Inc., 113 F.3d 781, 787 (7th Cir. 1997); see also MCI WorldCom Network
Servs., Inc. v. Atlas Excavating, Inc., 2006 WL 3542332 at *3 (N.D. Ill Dec. 6, 2006) (failure to
respond constitutes waiver).

Accordingly, Jafarikal is subject to the Court’s preliminary

injunction order.
26.

To obtain a preliminary injunction, API must show “that it has (1) no adequate

remedy at law and will suffer irreparable harm if a preliminary injunction is denied and (2) some
likelihood of success on the merits.” Ezell v. City of Chicago, 651 F.3d 684, 694 (7th Cir. 2011);
see also Christian Legal Soc’y v. Walker, 453 F.3d 853, 859 (7th Cir. 2006).
27.

The Court finds that API is likely to establish that it has been and will continue to

be irreparably injured by Defendants’ unauthorized use of the API Certification Marks and
alleged imitations thereof, and by Defendants’ false representations that their products are API
certified and conform to the requirements of API’s “SM” designations.
28.

In addition, API is likely to succeed on the merits of its infringement and false

advertising claims.

Specifically, Defendants’ actions described above are likely to cause

confusion, mistake, or deception as to the source, origin, or quality of Defendants’ goods.
Moreover, Defendants’ actions are likely to falsely suggest a certification, connection,
sponsorship, license, approval, and/or association of Defendants and Defendants’ goods with
API.1
Based on the foregoing findings of fact and conclusions of law, it is hereby ORDERED,
ADJUDGED, AND DECREED that the Motion for Preliminary Injunction (Dkt. 9) is
GRANTED as follows:
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The Court is ever mindful that this motion comes before the Court during the preliminary injunction stage. Given
the unusual procedural posture of this case, the Court’s ruling on this matter will not necessarily be binding on
future rulings.

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A.

Defendants, along with any

unnamed officers, directors, subsidiaries, and

successors, are immediately and until the final judgment in the Action are
PRELIMINARILY ENJOINED:
1. from using, registering, or reproducing any trademark or certification mark
owned by API, whether registered or unregistered, or any imitations, or
revisions thereof, (collectively, “the API marks”);

2. from manufacturing, contracting to manufacture, assisting in the manufacture
of bottling, ordering, and distributing, selling, advertising, refurbishing,
altering, reconditioning, labeling, or re-labeling any engine oil products of any
kind or size bearing the API Marks unless such engine oil products are
obtained from an API-licensed source;
3. from infringing, diluting, or otherwise violating API’s trademark rights in any
and all of the API Marks, by using imitations or confusingly similar copies of

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the API Marks, including but not limited to using starburst logos, circular
logos, or concentric circular logos of the type shown below:

4. from stating, implying, or otherwise representing by any means whatsoever,
directly or indirectly, that a Defendant’s API standard engine oil products
meet or exceed, API standards and/or API service categories or designations
(e.g., API Service SM), and from stating, implying, or otherwise representing
by any means whatsoever, directly or indirectly, without API’s authorization
that API has tested, certified, endorsed, or otherwise approved any API
standard engine oil products offered, promoted, sold, made, distributed, or
rendered by Defendants;
5. from including any reference to the API Marks or service categories, or any
imitations thereof, on any promotional materials or any website under their
control;
6. from distributing or selling any API standard engine oils unless they have
permitted an API collection agent to take an audit sample of such oil for
quality testing, and the audit collection for testing has been completed to
API’s satisfaction, which testing will be performed as expeditiously as is
reasonably possible, as per paragraph B of this Order.

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B.
1. Upon completion of every batch of API standard engine oil for sale or
distribution, Tailor Made must notify API in writing through counsel that it
intends to distribute API standard engine oil, and permit an API collection agent
to select and take a sample of API standard engine oil at his discretion during
normal business hours as arranged in advance with Tailor Made from either: (1)
the full batch of API standard engine oil, prior to packaging the oil, or (2) from
the entire batch of packaged API standard engine oil. Tailor Made shall make all
API standard engine oil from each batch reasonably available for the API
collection agent to take an audit sample from, at the agent’s discretion. Tailor
Made shall permit the API collection agent to take no more than four (4) quarts of
API standard engine oil from each batch, and API shall bear the costs of taking
additional amounts of API standard engine oil from each batch to complete any
necessary audit testing. Tailor Made shall make no representation to any other
party that any sampled batch of API standard engine oil is approved or endorsed
by API in any way. Tailor Made shall bear any reasonable cost of the API testing.
2. Upon completion of every batch of API standard engine oil for sale or
distribution, Jafarikal must notify API in writing through counsel that it intends to
distribute API standard engine oil, and permit an API collection agent to select
and take an audit sample of API standard engine oil at his full discretion from
either; (1) the full batch of API standard engine oil, prior to packaging the oil, or
(2) from the entire batch of packaged API standard engine oil. Jafarikal shall

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make all API standard engine oil from each batch available for the API collection
agent to take a sample from, at the agent’s discretion. Jafarikal shall permit the
API collection agent to take no more than four (4) quarts of API standard engine
oil from each batch, and API shall bear the costs of taking additional amounts of
API standard engine oil from each batch to complete any necessary audit testing.
Jafarikal shall make no representations to any other party that any sampled batch
of API standard engine oil is approved or endorsed by API in any way. Jafarikal
shall bear any reasonable cost of the API testing.
C.
1. Within ten (10) business days of entry of this Order, Defendants Tailor Made, the
Selkirks, and Jafarikal must each submit to this Court an affidavit of compliance
confirming that any API standard engine oil products or material in their control
that are subject to this injunction have been removed from sale, circulation, or
distribution and that they have established procedures to prevent such sale,
circulation, or distribution until entry of a final judgment in this Action.

SO ORDERED:

04/27/2012

________________________
Hon. Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana

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DISTRIBUTION:
Holiday W. Banta
ICE MILLER LLP
[e-mail]
James F. Bleeke
BLEEKE DILLON CRANDALL PC
[e-mail]
Ryan Bruce Bowers
BARNES & THORNBURG LLP
[e-mail]
Jan M. Carroll
BARNES & THORNBURG LLP
[e-mail]
David Earl Dearing
[e-mail]
Margaret A. Esquenet
FINNEGAN HENDERSON FARABOW GARRETT & DUNNER, L.L.P.
[e-mail]
Jana Eleonore Harris
ICE MILLER LLP
[e-mail]
B. Brett Heavner
FINNEGAN HENDERSON FARABOW GARRETT & DUNNER, L.L.P.
[e-mail]
Christopher D. Simpkins
BLEEKE DILLON CRANDALL PC
[e-mail]

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