Pillsbury Trademark Team Secures Permanent Injunction, $5 Million in Damages and ITC Exclusion Order for Hyundai

This favorable judgment reflects U.S. District Judge Max Cogburn Jr.’s February 25, 2020, determination that DTI was importing Hyundai-branded service and collision parts intended for use in foreign countries while claiming the illicit parts were genuine, which they were not.  These gray market parts—obtained from questionable trading companies outside the U.S.—did not come with a Hyundai warranty and were never authorized for sale and use on Hyundai vehicles in the U.S. DTI falsely represented to dealers in the United States that the parts were genuine and would be covered by Hyundai’s warranty.  Many of the service and collision parts being sold by DTI were also defective, while others were counterfeit.  

DTI had counterclaimed against Hyundai in the North Carolina action for antitrust violations.  However, as part of the judgment, DTI admitted that these allegations lacked any merit and judgment was also entered in Hyundai’s favor with respect to DTI’s claim.

Hyundai's victory marked the successful first step in the company's multi-pronged efforts to stop DTI’s fraudulent practices. Hyundai also brought a parallel ITC investigation in which DTI’s foreign suppliers defaulted, and DTI has consented to the entry of an exclusion order against it that is now in the process of being entered.  This investigation is the first in which a U.S. automaker has sought an exclusion order against a gray market parts seller and its foreign suppliers.

"This case is a win for Hyundai owners who want peace of mind that Hyundai-branded parts used on their cars are approved by Hyundai Motor America and have gone through its quality control," said Barry Ratzlaff, Hyundai Motor America’s chief customer officer. "These days, it is easy for owners and even dealers to be confused by the sales tactics of gray market parts sellers. The internet is filled with examples of listings that appear to be for Hyundai Genuine Parts, but in reality, those parts are not coming from Hyundai Motor America and are subject to unsecure supply chains without appropriate safeguards against introducing counterfeit, reject, and defective parts."

Pillsbury Intellectual Property partner Kenneth Keller, counsels Christopher Stretch and Vijay Toke and associate Zandir Morton represented Hyundai in the successful district court case. Keller and Stretch are teaming with firm partner Kecia Reynolds and senior associate Monica Hernandez in the successful ITC action.