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Possible Trademark Infringement for Toyota Franchise Owner

Two Toyota franchise owners are battling it out in court over the rights to various domain names allegedly purchased by one franchise owner to mislead internet users looking for the other franchise into landing on his own franchise’s site.

Bob Tyler (Bob Tyler Toyota) seeks to collect $1 million in damages from Shawn Esfahani (Eastern Shore Toyota) based on allegations that Esfahani bought up 14 URLs that contained “Bob Tyler” or similar variations in order to redirect these links to his own Toyota franchise site, effectively stealing business from Bob Tyler Toyota. Purchasing domain names for this intent could be considered trademark infringement, a violation of Tyler’s intellectual property rights.

In court this past Wednesday, Esfahani claimed that the purchase of these domain names wasn’t his idea. He claimed his company was told to adopt this strategy by a third-party search engine optimization contractor in order to increase his search visibility locally in the online car sales marketplace. Esfahani purchased a total of 4,000 domain names in July 2009 at the behest of David Vaughan, an employee of Advance Dealer Systems, the aforementioned third-party contractor. Many of these domains included iterations of several local competitors, and were intended to be developed as small websites that would drive search traffic to Eastern Shore Toyota’s main site. Esfahani testified at the time he was under the impression this was completely legal.

Esfahani’s attorney argued that the Anti-cybersquatting Consumer Protection Act affords Esfahani the opportunity to hold all the domains purchased until expiration as long as Esfahani never uses them to make a profit. In his lawsuit, Tyler is claiming trademark infringement and has demanded the Bob Tyler themed URLs be taken offline immediately. Esfahani says he was unaware the third-party contract had built sites on Bob Tyler-esque URLs and has requested the contractor take them down. His attorney is claiming the Anit-cybersquatting act was created to protect laypeople like Esfahani from being found guilty in situations like this if they weren’t acting in bad faith.

A complex relationship exists between the two franchise owners. Esfahani testified he had beat out Tyler for control over a highly coveted franchise a few years back and that his dealership now sells more cars than Bob Tyler Toyota. Also, Esfahani and Tyler are currently in the midst of another lawsuit filed by Esfahani, a person of Iranian descent, claiming Tyler’s employees openly refer to his franchise as “Middle Eastern Toyota” or “Taliban Toyota.” Esfahani claims they call his employees “terrorists” and that Tyler’s employees have falsely accused his franchise of using profits as funding for terrorist activities.

Jurors failed to reach a conclusion on the trademark infringement case late Wednesday and were sent home to continue deliberation Thursday this week.

Source: “Toyota verdict on hold” 9/30/10

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