Northern California Record

Friday, April 3, 2020

Carroll Shelby seeks damages for alleged trademark infringement

By Sara McCleary | Mar 17, 2017

Trademark 04

LOS ANGELES — An automotive-restoration company is being sued for trademark infringement for allegedly using the Shelby mark without permission.

Tulsa, Oklahoma-based US Restoration LLC is accused by Carroll Shelby Licensing Inc. and the Carroll Hall Shelby Trust of making replicas of Shelby GT 350 and Shelby GT 500 vehicles. Shelby filed a complaint on Jan. 30 in the U.S. District Court for the Central District of California.

According to Josh Eichenstein, an associate at Beverly Hills-based Cohen IP Law Group who specializes in intellectual-property litigation, filing of the suit in California despite the alleged actions having occurred in Oklahoma is not unusual.

“Plaintiffs almost always prefer to file lawsuits in the states they reside for a number of reasons,” he told the Northern California Record in an email. “First, it is practical to litigate locally to make the proceedings as convenient as possible for themselves, especially against an out-of-state party. Further, there are jurisdictional reasons — for example, the plaintiff needs to allege they were harmed in the state the suit was filed. Finally, California has a rich body of trademark law.”

Although the suit seems to focus on US Restoration’s use of the Shelby mark, it’s likely that creation of the replicas without use of the mark would still have been an issue for the company.

“Protection for the look of the car can fall under design patent and/or trade dress,” Eichenstein said. “A design patent protects the way something looks, but not how it works ... Another legal theory for protection of a car design falls under ‘trade dress.’ Trade dress can be claimed even if it is not registered with the US Patent and Trademark office. Trade dress protects the visual appearance of a product, that is unique and distinct in the eyes of the consumer.”

According to the complaint filed by Shelby, the company issued to the defendant a cease-and-desist letter in 2014 and negotiated a licensing agreement. The plaintiff is alleging that US Restoration breached the agreement, which was then terminated in December 2014, but the defendant allegedly continued to use the Shelby mark.

Shelby is seeking injunctive relief, legal fees, profits, and statutory damages up to $2 million per Shelby mark used by US Restoration.

“It is standard practice to plead the maximum amount of damages allowed, and trademark law … allows a maximum of $2 million in damages for willful infringement of a counterfeit mark,” Eichenstein said. “This does not mean the plaintiffs will get or expect to collect $2 million, but they have the right to request it. It is standard practice to swing for the fences.”

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Organizations in this Story

Carroll Shelby International