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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK VOLKSWAGEN AG, a German corporation, and VOLKSWAGEN GROUP OF AMERICA, INC., a New Jersey corporation, Plaintiffs, -vsV.W. PARTS, INC., a New York corporation, ONLINE AUCTION SERVICES, LLC, a New York limited liability company, WILLIAM HRAZANEK, an individual and Chief Executive Officer of V.W. Parts, Inc., TOM SHAMRO, an individual and co-principal of Online Auction Services, LLC, and MICHELLE SHAMRO, an individual and co-principal of Online Auction Services, Defendants. Plaintiffs Volkswagen AG and Volkswagen Group of America, Inc. (collectively, Plaintiffs or VW) for their claims against Defendants V.W. Parts, Inc., Online Auction Services, LLC, William Hrazanek, Tom Shamro, and Michelle Shamro (collectively Defendants) allege as follows: SUBSTANCE OF THE ACTION 1. This suit arises from Defendants unauthorized use of VWs distinctive and VERIFIED COMPLAINT Civil Action No. ___________________

world-famous trademarks and trade dress. Defendants feature VWs trademarks and trade dress in nearly every facet of their business operations, including in their business names such as VW Parts, Inc. and 800 VW PARTS, Internet domain names such as 800v-w-parts.com, 800vwparts.com, vwpartsinc.com, and vwconversion.com, advertising, vanity telephone number such as 800-VWPARTS, and otherwise, in order to convey the false impression to consumers

!aaassseee 333:::000888---cccvvv---000000888222000---TTTJJJMMM---DDDEEEPPP DDDooocccuuummmeeennnttt 111 FFFiiillleeeddd 000777///222888///000888 PPPaaagggeee 222 ooofff 111999

that Defendants are associated with VW. 2. VW asserts claims for federal trademark infringement, trademark dilution, false

designation of origin, and cyberpiracy under Sections 32(1), 43(c), and 43(a) of the United States Trademark Act of 1946, as amended (the Lanham Act), 15 U.S.C. 1114(1), 1125(c), 1125(a), and 1125(d), and trademark infringement under New York common law. VW seeks preliminary and permanent injunctive relief, compensatory damages, treble damages, attorney fees, and costs. THE PARTIES 3. Plaintiff Volkswagen AG is a German corporation with its principal place of

business in Wolfsburg, Germany. 4. Plaintiff Volkswagen Group of America, Inc. (Volkswagen Group) is a New

Jersey corporation with its principal place of business in Herndon, Virginia. Volkswagen Group is the exclusive U.S. licensee for Volkswagen AG with exclusive authority to import Volkswagen vehicles, parts, accessories, and related products into the U.S. and with responsibility for enforcing the trademarks of Volkswagen AG in the U.S. 5. Defendant V.W. Parts, Inc. is a New York corporation with its principal place of

business in Fleischmanns, New York. 6. Defendant Online Auction Services, LLC is a New York limited liability

company with its principal place of business in Fleischmanns, New York, and the registrant of the domain names 800v-w-parts.com, 800vwparts.com, vwpartsinc.com, and vwconversion.com. 7. Defendant William Hrazanek is an individual and a principal of V.W. Parts, Inc.

and a moving, conscious, and active force behind the infringing acts complained of herein, and he actively participated in and approved the acts of infringement alleged herein. On information

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and belief, Defendant Hrazanek resides in Fleischmanns, New York. 8. Defendant Tom Shamro is an individual and a principal of Online Auction

Services, LLC and a moving, conscious, and active force behind the infringing acts complained of herein, and he actively participated in and approved the acts of infringement alleged herein. On information and belief, Defendant Tom Shamro resides in Fleischmanns, New York. 9. Defendant Michelle Shamro is an individual and a principal of Online Auction

Services, LLC and a moving, conscious, and active force behind the infringing acts complained of herein, and she actively participated in and approved the acts of infringement alleged herein. On information and belief, Defendant Michelle Shamro resides in Fleischmanns, New York. JURISDICTION AND VENUE 10. This Court has subject matter jurisdiction over the federal trademark

infringement, trademark dilution, false designation of origin, and cyberpiracy claims under 28 U.S.C. 1331 and 1338(a), and over the remaining claim under 28 U.S.C. 1367(a). 11. This Court has personal jurisdiction over Defendants inasmuch as Defendants

reside or may be found in this judicial district and inasmuch as this action arises out of wrongful acts committed by Defendants in this judicial district, which subject them to personal jurisdiction here. 12. Venue is proper under 28 U.S.C. 1391(b)(1) and 1391(b)(2) because

Defendants may be found in this judicial district and because a substantial part of the events giving rise to the claims occurred in this judicial district. FACTUAL BACKGROUND VWs Trademark Rights 13. Plaintiffs Volkswagen AG and Volkswagen Group of America, Inc. are VW is one of the most successful automobile -3-

commonly known world-wide as VW.

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manufacturers in the entire world. At the core of the company is the VW brand. 14. VW obtained its first U.S. Trademark Registration for VW in 1957 (U.S. Reg.

No. 0,653,695) and has acquired many additional registrations for VW and marks that incorporate VW. 15. VW uses VW in connection with a design trademark or logo consisting of an

encircled V and W, known as the VW EMBLEM, depicted below:

16.

VW obtained its first U.S. Trademark Registration for the VW EMBLEM (Reg.

No. 0,804,869) in 1966 and has acquired many additional registrations for the design trademark. 17. VW holds additional registrations for VW and the VW EMBLEM in many

other countries throughout the world. 18. VWs registrations for the marks VW (Reg. No. 0,653,695) and VW

EMBLEM (Reg. No. 0,804,869) (the VW Marks) are valid, unrevoked, subsisting, and incontestable, and constitute prima facie evidence of VWs exclusive ownership of these marks. Copies of VWs registration certificates for VW and VW EMBLEM are attached as Exhibit A and incorporated herein by reference. 19. VW has expended many millions of dollars in advertising, promoting, enforcing,

and developing the VW Marks throughout the world. VW prominently displays the VW Marks in its advertising in a wide variety of media, including on the Internet, on television, and in newspapers and magazines. In addition, VW permits its dealers to use the VW Marks in their

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business names, on their business premises, and in their advertising, subject to VWs control. VW regulates the use and display of the VW Marks by its dealers in order to maximize the economic value of the trademarks, for example, by ensuring that the marks are displayed in a unified manner. As a result of such advertising and such control, VW has established

inestimable good will in the VW Marks, which have become widely known and recognized throughout the world as symbols of the unique and high quality vehicles and services provided by VW. As a result of such advertising and expenditures, VW has established immeasurable goodwill in the VW Marks, which are among the best known, famous, and valuable trademarks in the world. 20. The VW Marks are inherently distinctive and have acquired distinctiveness as a The VW Marks are

consequence of VWs use and promotion of the marks worldwide.

immediately identifiable and associated by the general public with VW, and have thus acquired secondary meaning. The VW Marks, and the goodwill associated with the marks, are invaluable assets of substantial and inestimable worth to VW. 21. VW advertises online and operates a number of websites using domain names that

incorporate the VW Marks. Volkswagen Groups official website is located at vw.com. Subject to terms and conditions set by VW to ensure quality and uniformity, VW also authorizes its licensed dealers to operate websites using domain names that incorporate the VW Marks. 22. VW acts through an organization of dealers, which sell and service new and used

VW automobiles and related parts, products, and services. 23. VW exercises great care and exerts substantial effort to control the nature and

quality of the goods and services provided under the VW Marks.

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Defendants Violations of VWs Trademark Rights 24. This is a quintessential case of trademark infringement. Subsequent to VWs

development and use of the VW Marks, Defendants began operating a business selling salvaged and aftermarket parts for Volkswagen automobiles that Defendants consciously designed to appear as if it was being operated by VW itself. Defendants blatantly infringe the VW Marks in nearly every facet of their business operations. Defendants prominently feature the VW Marks in business names such as 800 VW Parts and VW Parts, in domain names such as 800v-wparts.com, 800vwparts.com, vwpartsinc.com, and vwconversion.com, in the vanity telephone number of 800-VWPARTS, in the corporate name of VW Parts, Inc., and in other ways to be determined during discovery in this lawsuit. 25. Defendants prominently feature exact replicas of the VW Marks in their

advertising and promotional materials, including on their websites. 26. A screenshot of the homepage of Defendants 800vwparts.com website as it

appeared on September 24, 2007, juxtaposed with VWs VW EMBLEM design trademark appears below:

VW EMBLEM (Reg. No. 3,032,408)

Defendants Unauthorized 800vwparts.com Website, captured on September 24, 2007

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27.

Defendants commonly refer to themselves as VW. For example, Defendants

answer their business telephone by identifying themselves as VW Parts, Inc., or simply VW. 28. Defendants are in no way affiliated with, authorized, or sponsored by VW and

have no authority to use the VW Marks to identify the products, services, or goods they advertise, promote, or sell. 29. Defendants use of the VW Marks in conjunction with the advertisement,

promotion, and sale of Defendants products and services constitutes a misappropriation of the VW Marks and associated good will, and is likely to cause potential purchasers of Defendants products and services, as well as the public at large, to believe that Defendants products are affiliated with or authorized, sponsored, or endorsed by VW. 30. Defendants wrongful use of the VW Marks or confusingly similar versions The

thereof, dilutes, tarnishes, and whittles away the distinctiveness of the VW Marks.

unauthorized use and display of the VW Marks by competitors of VW, such as Defendants, causes serious harm to VW because it lessens the capacity of the VW Marks to designate VW and the goods and services provided by VW and its dealers. 31. Defendants use the VW Marks and intentionally similar versions thereof with

actual knowledge of VWs prior adoption and use of the VW Marks. Defendants have ignored numerous opportunities to resolve this matter simply by adopting a business name and advertising scheme that does not include any unauthorized use of VWs trademarks, leaving VW with no choice but to file this suit. 32. Defendants have carried out and continue to carry out such acts with the intent to

mislead and deceive consumers and the public in general. In so doing, Defendants have caused irreparable damage to the VW Marks and to the good will of VW in the VW Marks.

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Defendants Cyberpiracy 33. The Internet is a worldwide network of computers that enables individuals and

organizations to access and share information by means of web pages and websites, socalled because the pages are reached by links from one to another, creating the worldwide web or web. 34. A web page is a computer data file that is published or served to the Internet by

one computer and presents itself as a graphical page viewable by other computers on the Internet. It can include names, pictures, text, sound, and links to other web pages. A collection of related web pages published by the same owner is typically referred to as a website, which is identified on the Internet by a unique address, similar to a street address, and commonly referred to as a domain name. 35. The Internet is divided into several top level domains, such as .com, .net,

and .info. Domain names with such top level designations may be registered with any of multiple domain name registrars for a de minimis fee. Such registrars register domain names on a first-come, first-served basis and do not make a threshold determination regarding a registrants right to use a domain name, other than to insure that no two domain names are identical. 36. As an express condition of registering a domain name, an applicant must

represent and warrant that: (1) the applicants statements are true; (2) the applicant has the right to use the requested domain name; (3) the use or registration of the domain name does not interfere with the rights of any third party in any jurisdiction with respect to trademark, service mark, trade name, company name, or any other intellectual property rights; and (4) the applicant is not seeking to use the domain name for any unlawful purpose, including unfair competition.

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37.

The public recognizes, and often relies on the expectation, that a companys

domain names will incorporate the companys corporate or brand names. Internet users typically type in the name of a company, the companys trademark, or the name of the companys product to learn about that company. So, for example, a user might type in vw.com to find information about VW and its automobiles and related goods and services. The public expects to be able to reach a trademark holder by typing in domain names in that form. Indeed, the most common method of Internet searching is so-called direct navigation, which occurs when an Internet user types a domain name in his or her browser directly. More consumers engage in direct navigation than utilize search engines like Google or Yahoo!. Domain names that include or describe a companys brand names or products, thus, are valuable assets that allow potential customers and other Internet users interested in a trademark holder to communicate with or learn more about that trademark holder. On the other hand, when such a domain name is registered by an unauthorized entity, the potential for substantial dilution, blurring, tarnishment, and consumer confusion occurs inasmuch as Internet users may assume that the domain name is affiliated with or somehow approved by the trademark holder, or because an Internet user, upon realizing that the site is not affiliated with the trademark holder, may either find the goods or services offered to be acceptable substitutes for the goods or services that the user had originally intended to purchase from the trademark holder or become frustrated and give up searching for the trademark holder. 38. Domain names may be unlawfully registered by cyberpirates or

cybersquatters who register the domain names: (1) to sell the domain names back to the famous trademark holder; (2) to sell the domain names to other persons or entities who are not authorized to use the trademarks; (3) to use the domain names to divert Internet users seeking a

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trademark owners site to an unrelated website in order to, for example, earn click-through referral fees from the owner of the unrelated website or to create public confusion; (4) to use the domain names for some other unlawful or improper purpose such as for pornographic websites; or (5) to otherwise profit from the goodwill of a famous trademark. 39. Domain name registration alone, even without use of the domain name to operate

a website, may create public confusion and dilute the strength of a famous trademark. Domain names that incorporate the VW Marks that are registered by cyberpirates diminish the distinctiveness of the VW Marks and users finding these domain names through one of the various databases that contain domain name registrations, in search results generated by search engines like Yahoo! or Google, or as a consequence of the users own intuitions or expectations may mistakenly believe that these domain names are affiliated with or connected to VW. 40. The Anticybersquatting Consumer Protection Act (the Cyberpiracy Act) was

enacted to address the increasing epidemic of cyberpirates who registered, trafficked in, or used the offending domain name with bad-faith intent to profit from the goodwill of a mark belonging to someone else. Conference Report H.R. No. 106-464 (Nov. 9, 1999). 41. Section 3002 of the Cyberpiracy Act provides in pertinent part:

CYBERPIRACY PREVENTION A person shall be liable in a civil action by the owner of a mark . . . if, without regard to the goods or services of the parties, that person (i) has a bad faith intent to profit from that mark . . .; and (ii) registers, traffics in, or uses a domain name that (I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark; (II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark.

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42.

In violation of the Cyberpiracy Act, Defendants acquired or registered the domain

names 800v-w-parts.com, 800vwparts.com, vwpartsinc.com, and vwconversion.com (the Infringing Domain Names). 43. Defendants do not have any trademark or other intellectual property rights in the

VW Marks. The only conceivable reason for Defendants registration of the Infringing Domain Names is to profit from the goodwill and reputation of VW and its registered trademarks. FIRST CLAIM FOR RELIEF (Trademark Infringement) 44. 45. The allegations set forth above are incorporated herein by reference. The VW Marks are inherently distinctive and have acquired secondary meaning.

The public associates the VW Marks exclusively with VW and the automobiles that it manufactures and sells. The distinctiveness of the VW Marks has been fortified through

extensive advertising and sales of VWs goods and services throughout the world. 46. Despite VWs well-known prior rights in the VW Marks and without VWs

authorization, Defendants have used and continue to use counterfeits, copies, reproductions, or colorable imitations of the VW Marks in connection with the advertisement, promotion, and sale of Defendants products and services. 47. Defendants have willfully infringed VWs exclusive rights in the VW Marks in

violation of 15 U.S.C. 1114. 48. Defendants misappropriation of the VW Marks or colorable imitations thereof

has been and continues to be done with the intent to cause confusion and mistake, and to deceive consumers concerning the source or sponsorship of Defendants products and services. Accordingly, this is an exceptional case and VW is entitled to treble damages, attorney fees, and other extraordinary remedies under 15 U.S.C. 1117.

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49.

As a direct and proximate result of Defendants conduct, VW has suffered

irreparable harm. Unless Defendants are restrained from further infringement of the VW Marks, VW will continue to be irreparably harmed. 50. VW has no adequate remedy at law that will compensate for the continued and

irreparable harm it will suffer if Defendants acts are allowed to continue. 51. As a direct and proximate result of Defendants conduct, VW has suffered

damages in an amount to be proved at trial. SECOND CLAIM FOR RELIEF (Trademark Dilution) 52. 53. The allegations set forth above are incorporated herein by reference. The VW Marks are famous trademarks. They are inherently distinctive and have

acquired substantial renown. 54. 55. VW has extensively and exclusively used the VW Marks in commerce. Defendants unauthorized and unlawful use of the VW Marks as described above

dilutes the distinctive quality of and tarnishes the VW Marks in violation of 15 U.S.C. 1125(c)(1). 56. As a direct and proximate result of Defendants conduct, VW has suffered

irreparable harm. Unless Defendants are restrained from further dilution of the VW Marks, VW will continue to be irreparably harmed. 57. VW has no adequate remedy at law that will compensate for the continued and

irreparable harm it will suffer if Defendants acts are allowed to continue. 58. As a direct and proximate result of Defendants conduct, VW has suffered

damages in an amount to be proved at trial.

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THIRD CLAIM FOR RELIEF (False Designation of Origin) 59. 60. The allegations set forth above are incorporated herein by this reference. Defendants have knowingly used the VW Marks, or counterfeits, reproductions,

copies, or colorable imitations thereof, in connection with the products and services that Defendants promote and sell. 61. By Defendants unauthorized use of the VW Trademarks, Defendants have used a

false designation of origin that is likely to cause confusion, mistake, or deception as to the connection of Defendants with VW in violation of 15 U.S.C. 1125(a). 62. Defendants have intentionally and willfully used false designations of origin,

rendering this case exceptional within the meaning of 15 U.S.C. 1117(a). 63. Because of Defendants conduct, VW has been irreparably harmed in its business.

Moreover, VW will continue to suffer irreparable harm unless Defendants are restrained from making false designations of origin, false descriptions, or misrepresentations, as set forth above. 64. VW has no adequate remedy at law that will compensate for the continued and

irreparable harm that will be caused if Defendants acts are allowed to continue. 65. VW has been damaged by Defendants acts in an amount to be proven at trial. FOURTH CLAIM FOR RELIEF (Common Law Trademark Infringement) 66. 67. The allegations set forth above are incorporated herein by this reference. By reason of the acts complained of herein, Defendants have infringed VWs

trademarks in violation of the common law. 68. Because of Defendants trademark infringement, VW has been irreparably

harmed in its business.

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69.

Defendants acts have been done knowingly, maliciously, and oppressively, and

with intent to trade upon the goodwill of VW and to injure VW. 70. Defendants will continue their acts of infringement to the irreparable injury of

VW and the public unless restrained and enjoined. 71. VW has no adequate remedy at law that will compensate for the continued and

irreparable harm that will be caused if Defendants acts are allowed to continue. 72. VW has been damaged by Defendants acts in an amount to be proven at trial. FIFTH CLAIM FOR RELIEF (Cyberpiracy) 73. 74. The allegations set forth above are incorporated herein by this reference. Defendants actions evidence bad-faith intent to profit from use of VW Marks in

domain names. 75. Defendants have registered, trafficked in, or used domain names that are identical,

confusing similar to, or dilutive of a trademark that is distinctive and famous and was distinctive and famous at the time of registration of the Infringing Domain Names. 76. Defendants will continue their acts of cyberpiracy to the irreparable injury of VW

and the public unless restrained and enjoined. 77. VW has no adequate remedy at law that will compensate for the continued and

irreparable harm that will be caused if Defendants acts of cyberpiracy are allowed to continue. 78. 79. VW is entitled to an injunction transferring the Infringing Domain Names to VW. In addition, in light of Defendants obvious bad faith, VW is entitled to damages,

including statutory damages under the ACPA in the amount of $100,000 per domain name, in addition to its costs and attorney fees in bringing this action.

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PRAYER FOR RELIEF WHEREFORE, VW prays for judgment against Defendants as follows: A. Under all claims for relief, that a permanent injunction be issued enjoining

Defendants, its employees, agents, successors and assigns, and all those in active concert and participation with them, and each of them who receives notice directly or otherwise of such injunctions, from: (1) imitating, copying, or making unauthorized use of the VW Marks, including, but

not limited to, in the business names such as VW Parts, Inc., Internet domain names such as 800v-w-parts.com, 800vwparts.com, vwpartsinc.com, and vwconversion.com, in advertising, in the vanity telephone number such as 800-VWPARTS, and otherwise; (2) importing, manufacturing, producing, distributing, circulating, selling, offering

for sale, advertising, promoting or displaying any service or product using any simulation, reproduction, counterfeit, copy, or colorable imitation of any or all of the VW Marks; (3) using any simulation, reproduction, counterfeit, copy, or colorable imitation of the

VW Marks in connection with the promotion, advertisement, display, sale, offering for sale, manufacture, production, circulation, or distribution of any service or product; (4) using any false designation of origin or false description, including, without

limitation, any letters or symbols constituting the VW Marks, or performing any act, which may, or is likely to, lead members of the trade or public to believe that any service or product manufactured, distributed, or sold by Defendants is in any manner associated or connected with VW or the VW Marks, or is sold, manufactured, licensed, sponsored, approved, or authorized by VW;

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(5)

engaging in any other activity constituting unfair competition with VW with

respect to the VW Marks, or constituting an infringement of any or all of the VW Marks, or of VWs rights in, or to use or exploit, any or all of the VW Marks; (6) transferring to anyone other than to VW the Infringing Domain Names or any

other domain names that use names, words, designations, or other symbols confusingly similar to the VW Marks; (7) registering, maintaining registrations for, offering for sale, claiming ownership of,

or in any other way using, the Infringing Domain Names or any other domain names that use names, words, designations, or other symbols confusingly similar to the VW Marks; and (8) instructing, assisting, aiding, or abetting any other person or business entity in

engaging in or performing any of the activities referred to in subparagraphs (1) through (7) above. B. That Defendants be ordered to disclose to the Court and to VW all other domain

name registrations owned or controlled, either directly or indirectly, by Defendants through any domain name registrar in order to permit the Court and VW to consider whether any such other registration should be transferred to VW or be subject to other relief in this matter. C. That Defendants be ordered to transfer to VW the registrations for the Infringing

Domain Names, and any other domain names in Defendants possession or control that use names, words, designations, or other symbols confusingly similar to the VW Marks. D. For an order directing that Defendants deliver for destruction all signs, labels,

tags, prints, packages, videos, and advertisements in their possession or under their control, bearing or using any or all of the VW Marks or any simulation, reproduction, counterfeit, copy,

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or colorable imitation thereof, and all plates, molds, matrices, and other means of making the same, pursuant to 15 U.S.C. 1118. E. For an order directing such other relief as the Court may deem appropriate to

prevent the trade and public from deriving the erroneous impression that any service or product manufactured, sold, or otherwise circulated or promoted by Defendants is authorized by VW or related in any way to VWs products or services. F. For an order directing that Defendants file with the Court and serve upon VWs

counsel within thirty (30) days after entry of such judgment, a report in writing under oath, setting forth in detail the manner and form in which Defendants have complied with the above. G. For an order permitting VW, or auditors for VW, to audit and inspect the books

and records of Defendants for a period of six months after entry of final relief in this matter to determine the scope of Defendants past use of the VW Marks, including all revenues and sales related to Defendants use of the VW Marks, as well as Defendants compliance with orders of this Court. H. For an award of VWs costs and disbursements incurred in this action, including

VWs reasonable attorney fees. I. For an award of VWs damages trebled or, alternatively, an award of Defendants

wrongful profits trebled, whichever is greater, plus VWs costs and attorney fees, pursuant to 15 U.S.C. 1117. J. K. For an award of VWs damages arising out of Defendants acts; For an order requiring Defendants to file with the Court and provide to VW an

accounting of all sales and profits realized by Defendants through the use of the VW Marks and any counterfeits thereof.

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L. M. DATED:

For an award of interest, including pre-judgment interest on the foregoing sums. For such other and further relief as the Court may deem just and proper. July 28, 2008 HISCOCK & BARCLAY, LLP

By:

s/ John D. Cook John D. Cook Bar Roll No. 511491

Office and Post Office Address One Park Place 300 South State Street Syracuse, New York 13202-2078 Telephone (315) 425-2885 Facsimile (315) 703-7353 Email: jcook@hiscockbarclay.com HOWARD, PHILLIPS & ANDERSEN Gregory D. Phillips (pro hac vice pending) Cody W. Zumwalt (pro hac vice pending) 560 E. 200 South, Suite 300 Salt Lake City, Utah 84102 Telephone (703) 773-4088 Facsimile (202) 689-7590 Email: gdp@hpalaw.com Attorneys for Plaintiffs Volkswagen AG and Volkswagen Group of America, Inc.

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