IP Law Daily, TRADEMARK—E.D. Va.: Motorsport shop’s case against former employee using highly similar ‘GNG’ mark proceeds, (Sep 28, 2022)

By Brian Craig, J.D.

Seven of the nine factors weigh in favor of a finding that use of the “GNG Performance” mark is likely to cause confusion with the “GNG” and “GNG Motorsports” marks.

The federal district court in Richmond, Virginia, has concluded that a performance motorsport shop in Virginia has plausibly alleged trademark infringement and false designation of origin claims against competing motorsports shop establish by a former employee. The court concluded that seven of the nine factors weigh in favor of a finding that the former shop manager’s new business with the name “GNG Performance” is likely to cause confusion among consumers with the “GNG” and “GNG Performance” marks. The court also concluded the allegations support a violation of the Computer Fraud and Abuse Act (Good ‘Nuff Garage, LLC v. McCulley, September 26, 2022, Lauck, M.).

Good ’Nuff Garage, LLC is a performance shop located in Virginia specializing in Subaru repair and modification that uses the “GNG” and “GNG Motorsports” marks. Good ’Nuff Garage employed a shop manager who then left Good ’Nuff Garage and started a competing business with the name “GNG Performance” with two other former employees. Good ’Nuff Garage sued the former shop, and his new business, alleging claims for trademark infringement and false designation of origin under the Lanham Act for unauthorized use of the “GNG” and “GNG Motorsports” marks. Good ’Nuff Garage also alleged a violation of the Computer Fraud and Abuse Act. The former shop manager filed a motion to dismiss.

Trademark infringement. The court first concluded that the complaint sufficiently alleges facts to support claims for trademark infringement and false designation of origin under the Lanham Act. The court found that seven of the nine factors weigh in favor of a finding that use of the “GNG” and “GNG Performance” marks is likely to cause confusion among consumers. The strength of the plaintiff’s marks, similarity of the marks, similarity of the goods and services, similarity of the facilities, similarity of the advertising, intent among defendants, and instances of actual confusion all support a likelihood of confusion.

A high degree of similarity exists between the plaintiff’s “GNG” and “GNG Motorsports” marks and the defendants’ “GNG Performance” mark. The dominant term within all three marks is the distinctive mark, “GNG.” The functionally identical nature of the auto repair and customization services provided to Subaru owners by the respective businesses weighs heavily in favor of a likelihood of confusion. The complaint pleaded sufficient facts to support the reasonable inference that the defendants acted with an intent to exploit the goodwill associated with the “GNG” and “GNG Motorsports” marks. The complaint alleges at least three documented instances of actual confusion between the two competing businesses. Vendors mistakenly charged Good ’Nuff Garage for purchases made by the defendants. The existence of these discrete examples of actual confusion between the underlying businesses heavily supports likelihood of confusion. Weighing the relevant factors, Good ’Nuff Garage adequately alleges the trademark infringement and false designation of origin claims.

Computer Fraud and Abuse Act. Next, the court determined that the plaintiff motorsports shop plausibly alleges a violation of the Computer Fraud and Abuse Act (CFAA). The complaint alleges that the former shop manager intentionally accessed a protected computer without authorization. Furthermore, the complaint alleges that the former shop manager deleted Good ’Nuff Garage’s Facebook business page causing irreparable harm because the data associated with the page was unrecoverable. The deletion of the Facebook business page also caused a loss of customers. These facts sufficiently allege damages under the CFAA. Therefore, the court denied the motion to dismiss.

The case is No. 3:21-cv-00571-MHL.

Attorneys: Mark Joseph Passero (Passero Employment Law, PLLC) for Good 'Nuff Garage, LLC d/b/a Gng Motorsports. Robert Danner Michaux (Christian & Barton LLP) for Colin McCulley.

Companies: Good 'Nuff Garage, LLC d/b/a GNG Motorsports

Cases: Trademark TechnologyInternet VirginiaNews