Hyundai loses counterfeit components lawsuit

A lawsuit brought by Korean carmaker Hyundai against a supplier accused of providing diverted or fake components has been dismissed by a US court.

The judge in the case concluded that Hyundai had not provided sufficient information to back up its trademark infringement claims against Florida-based Pinnacle Group LLC, a wholesaler which specialises in selling replacement parts for vehicles made by a wide range of car manufacturers.

According to the complaint filed by HMA, Pinnacle Group and other unnamed defendants had been "contributing, inducing and/or engaging in the sale of counterfeit goods and/or illegal 'grey market' goods" by selling products such as air filters, brake pads and oil filters.

HMA also maintained that the product exhibited numerous material differences ranging from differences in packaging, warning labels, production, part numbers and warranties.

In response, Pinnacle filed for dismissal of the complaint on the grounds that Pinnacle sells "genuine, first quality auto parts" - not counterfeits or illegal grey market goods - and that HMA's action was simply an attempt to quash competition.

"The auto parts sold by Pinnacle are legal grey market goods, a fact that is known to, but ignored by plaintiffs, in their desire to use false charges of trademark infringement to achieve a result to which they are not entitled," said documents filed by Pinnacle's legal representation.

The parts in question are manufactured by Hyundai for sale outside the US, but are not materially different from their US counterparts, according to Pinnacle's lawyers Samuel Watkins of Thompson Coburn and Stephen Weisskopf of Weisskopf Law.

Pinnacle sold the parts to Hyundai's own dealership network - not members of the public - and despite having records stretching back years and access to inventory through that network HMA has been unable to provide evidence of any illegal activity, they claim.

"It defies credulity to believe that a purveyor of counterfeit or illegal grey market goods would intentionally choose to sell its illicit goods, not to an unsuspecting and gullible public, but only to highly-trained Hyundai dealers who are best and uniquely situated to identify and reject the goods as illegal," said Pinnacle's lawyers.

Judge Cormac Carney sided with Pinnacle and upheld the dismissal request on October 7. Hyundai's US licensee Hyundai Motor America (HMA) still has an opportunity to refile its complaint, but at the time of writing had not said publicly whether it would do so.


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