AMERICAN PETROLEUM INSTITUTE v. BULLSEYE AUTOMOTIVE PRODUCTS INC. et al
ORDER granting 52 Plaintiff's Motion for Protective Order on the terms contained in this Order (see Order). Signed by Magistrate Judge Debra McVicker Lynch on 4/4/2014. (PG)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
BULLSEYE LUBRICANTS INC., and
) Case No. 1:13-cv-01112-TWP-DML
Order on Plaintiff’s Motion for Protective Order
This matter is before the court on a motion for protective order by plaintiff
American Petroleum Institute (“API”) that addresses discovery disputes related to
an upcoming hearing on API’s motion for preliminary injunction. (Dkt. 52). The
hearing is set for April 10, 2014. This order on the parties’ discovery disputes is
confined to the preliminary injunction context.
The court first describes the nature of the claims in this litigation and the
preliminary injunctive relief sought by API. It will then provide a ruling on each
Nature of the Claims and Preliminary Injunctive Relief
Plaintiff American Petroleum Institute (“API”) is a trade association for the
petroleum and natural gas industry. (Complaint, ¶ 5). For many years, it has
published engine oil standards for passenger vehicle engines and heavy-duty diesel
engines. (Id., ¶ 11). It also operates a program under which it permits engine oil
marketers whose products are properly tested and certified to claim that their oils
meet certain API performance standards and to affix certain trademarks to their
engine oil products. (See id. at ¶¶ 12-17). The marks include (a) marks with a
starburst design and that bear the words “American Petroleum Institute” and
“Certified,” id. ¶¶ 18-21, and (b) marks with a donut design designating engine oils
certified for certain motor vehicles, id., ¶¶ 22-25.
Defendants Bullseye Automotive Products, Inc. and Bullseye Lubricants, Inc.
are the same company and defendant Carlos Silva is its president. (Id., ¶¶ 6-7). The
court refers to them collectively as “Bullseye.” API alleges that Bullseye produces
or markets or sells motor engine oil and has affixed labels to its motor oils to make
it appear that the oils have been certified by API even though the oils do not meet
API’s standards. API has sued Bullseye for trademark infringement, trademark
counterfeiting, trademark dilution, false advertising, and unfair competition under
the Lanham Act. It also brings Indiana state law claims.
API seeks a preliminary injunction that (a) enjoins Bullseye from using
labeling on its products that infringe API’s marks, are confusingly similar to API’s
marks, or otherwise suggest that Bullseye’s products meet API’s standards and (b)
prohibits Bullseye “temporarily” from producing any engine oil “until it has shown
that the engine oils can be accurately labeled as safe for use in automobiles that are
currently on the nation’s roads.” (See Motion for Preliminary Injunction, Dkt. 20).
One defense Bullseye intends to raise at the preliminary injunction hearing
is that API has misused its trademarks in violation of the antitrust laws, and that
such misuse should prevent API from enforcing its marks. Bullseye contends that
this defense is available under Section 33(b)(7) of the Lanham Act, 15 U.S.C. §
1115(b)(7). Bullseye’s theory is that API has used, and is using, its trademark
rights to coerce some manufacturers and sellers of motor oils to agree to cease
business and that API’s exclusion of sellers from the market constitutes a per
se violation of the antitrust laws. API counters that Bullseye did not raise this
defense in its answer and that, in any event, 15 U.S.C. § 1115(b)(7) does not in fact
strip a trademark owner of his trademark. API also argues that Bullseye’s
antitrust defense is without merit as a matter of law.
The court does not now resolve this legal issue. It does take into account,
however, that Bullseye did not clearly in its answer alert API to an antitrust
defense. Bullseye’s later answers to interrogatories described alleged misconduct by
API in prior trademark enforcement actions to extract agreements from engine oil
manufacturers to stop selling their oil, but Bullseye also did not clearly indicate
there an antitrust defense to infringement. Because of the relatively late-breaking
disclosure of an antitrust defense, the court will limit the discovery that must be
provided before the preliminary injunction hearing. The court does not foreclose the
possibility that API could be required to provide additional discovery after the
preliminary injunction issues are decided.
API’s motion for protective order concerns four issues: (1) API’s intention to
present some evidence via affidavits at the preliminary injunction hearing;
(2) Bullseye’s intention to call API’s lawyers as witnesses at the preliminary
injunction hearing or seek their depositions in advance of the hearing;1 (3)
Bullseye’s discovery requests regarding API’s assertion of trademark rights against
other alleged infringers; and (4) documents about a man named Randy Wegner.
Evidence by Affidavit
API seeks a ruling that it may use affidavits at the preliminary injunction
hearing to present testimony by certain persons regarding their purchases of engine
oils marketed and sold by Bullseye. The court GRANTS that request. See Fed. R.
Civ. P.43(c). However, API must serve copies of the affidavits on Bullseye in
advance of the hearing and no later than the close of business on Tuesday, April 8,
Testimony by API’s Lawyers
The court enters a protective order that Bullseye may not call API’s lawyers
as witnesses at the preliminary injunction hearing. Bullseye contends it may need
testimony from these lawyers in furtherance of Bullseye’s proof of heavy-handed
tactics by API in other trademark infringement suits or threats of suit. Bullseye
wants the lawyers’ testimony because “API’s counsel personally negotiated and
Bullseye states that it has not subpoenaed and will not subpoena the lawyers
for deposition before the preliminary injunction hearing. The court accepts this
representation and DENIES as moot API’s request for a protective order relating to
depositions of their lawyers.
signed agreements excluding others from the oil market, which agreements were
per se violations of antitrust laws that render API’s trademarks unenforceable.”
Dkt. 55 at p. 3 (emphasis in original).
The court finds that the lawyers’ testimony is not reasonably necessary at the
preliminary injunction hearing. Bullseye has, and had, other appropriate avenues
for obtaining evidence regarding the subject agreements. It could have conducted a
Rule 30(b)(6) deposition of API before the preliminary injunction hearing. Under
the circumstances, it is an oppressive and unnecessary tactic to elicit evidence at
the hearing from API’s trial lawyers regarding the agreements. See United States v.
Dack, 747 F.2d 1172, 1176 n.5 (7th Cir. 1984) (when evidence is easily available from
other sources, attorneys who participate in case should not be called as witnesses
absent “extraordinary circumstances” or “compelling reasons”). See also Shelton v.
American Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986) (forbidding deposition of
opposing trial counsel unless there is no other means to obtain the information
sought and the information is relevant, “crucial,” and not privileged).
However, API must stipulate to the authenticity of the subject agreements or
produce a witness at the hearing who can provide testimony that establishes their
authenticity. The parties will be permitted the opportunity to make whatever legal
arguments they believe flow from the fact of and contents of the agreements. The
court does not foreclose API from arguing that the agreements are not relevant and
should not be considered by the court in adjudicating API’s motion for preliminary
Other Trademark Enforcement Activities
1. Tailor Made Litigation
Tailor Made is an entity that entered into an agreement with API to stop
selling motor oil for a period of time as part of the settlement of trademark
infringement litigation brought by API. Bullseye has requested all documents
concerning API’s litigation against Tailor Made and its principals, Bill and Rebecca
Selkirk. The court finds that so long as API stipulates to the authenticity of the
settlement agreement it entered in the Tailor Made litigation, no additional
discovery of documents concerning that litigation from API is reasonably necessary
in conjunction with the hearing on preliminary injunction.
2. Other Documents Requesting a Third Party to Stop Selling Motor Oil
API states that it has produced to Bullseye five consent injunctions it
obtained against persons it accused of trademark infringement over the last five
years, two of which contain a term requiring the person accused of infringement to
exit the engine oil field. API also represents that these are the only trademark
enforcement matters that API initiated against engine oil manufacturers in that
five-year period. Based on these representations, the court finds that additional
discovery of “all” documents related to requests to stop selling motor oil is not
reasonably necessary in conjunction with the hearing on preliminary injunction.
Documents Relating to Randy Wegner
Randy Wegner is a person who has acted as a “tipster” to API, alerting API
about sales of motor oils that do not meet APIs’ standards but are labeled in a
manner indicating to the public that they do. Bullseye believes that Mr. Wegner
may have provided to API a quart of Bullseye brand oil which Mr. Wegner
adulterated. API represents to the court that Mr. Wegner has provided no
information or documents to API about Bullseye. Neither API nor Bullseye has
listed Mr. Wegner as a witness for the preliminary injunction hearing. Based on
API’s representation and the fact that neither party intends to call Mr. Wegner, the
court finds that documents relating to Randy Wegner are not discovery reasonably
necessary for the preliminary injunction hearing.
API’s motion for protective order (Dkt. 52) is GRANTED on the terms
contained in this Order.
Debra McVicker Lynch
United States Magistrate Judge
Southern District of Indiana
All ECF-registered counsel of record via email generated by the court’s ECF system
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