A federal judge in South Dakota has barred a former GM dealership that now sells only used vehicles from using "Chevrolet" in its company name and on its Web site and Facebook page.
Acting in a suit by General Motors, U.S. District Judge Roberto Lange granted a permanent injunction against Rapp Chevrolet Inc. in Aberdeen, S.D.
Rapp was among 60 authorized dealerships that refused to sign a wind-down agreement during the GM bankruptcy, the decision said. A 2009 Bankruptcy Court order prohibited Rapp and the other ex-dealerships from using GM's trademarks.
But Rapp kept using "Chevrolet," although without the bow-tie logo, GM said. GM sued for trademark and service mark infringement, unfair competition, trademark dilution and breach of Rapp's dealer agreement.
In his decision, the judge said that "despite GM's repeated attempts to have Rapp discontinue holding itself out as 'Rapp Chevrolet,' Rapp has continued to do so" and expanded that wrongful use by creating a Rapp Chevrolet page on Facebook.
The judge said that once the dealer agreement terminated in July 2009, "Rapp had a contractual obligation to discontinue display and use of GM marks, including Chevrolet marks, on the premises or its website [rappchevrolet.com], other than for identification and advertising of what was in its vehicle inventory." The decision allows Rapp to use GM model names "solely for the purpose of identifying and advertising its inventory for sale."
The judge acknowledged that complying with the injunction "will incur some cost and hardship" for the store. But that type of hardship doesn't weigh "in favor of permitting trademark infringement," he said.
Rapp's attorney, Jeffrey Cole of Sioux Falls, S.D., wouldn't discuss his client's intention to comply with the injunction or to appeal. A GM spokeswoman said: "We don't comment on the outcome or status of individual dealer legal cases."