Pillsbury Winthrop Shaw Pittman and Womble Bond Dickinson have steered Hyundai Motor Co. to a $5 million consent judgment against a Miami-based company accused of distributing gray market auto parts.

Direct Technologies International Inc. stipulated to willful trademark infringement, false designation of origin and other causes of action before U.S. District Judge Max Cogburn Jr. of the Western District of North Carolina. Cogburn entered an injunction that blocks DTI from misrepresenting, importing or distributing non-genuine Hyundai parts. Hyundai will recover $5 million in damages and attorneys fees under the agreement.

Hyundai had sued DTI in 2017, accusing it of importing used, counterfeit or defective parts and "palming them off" as genuine Hyundai parts that are sourced through the company's authorized chain of distribution. Hyundai also had obtained default judgments against two alleged overseas suppliers at the International Trade Commission, and was closing in on a trial there against DTI.

"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, chief customer officer for Hyundai Motor America, in a written statement.

DTI had accused Hyundai of trying to monopolize the parts market and using its trademarks to restrain trade. It pointed out that the FTC had warned Hyundai in 2018 that conditioning its warranties on the use of Hyundai genuine parts could run afoul of the FTC Act. According to the consent judgment, DTI acknowledges its antitrust claims are "without merit."

Pillsbury partner Kenneth Keller and counsel Christopher Stretch represented Hyundai before both the district court and the ITC. Partner Kecia Reynolds and senior associate Monica Hernandez also litigated the ITC action. Womble partners Hayden Silver III and James Derrick and associate Jonathon Townsend, Pillsbury counsel Vijay Toke, and Hyundai Motor America assistant general counsel Jason Erb also appeared in the district court litigation.

DTI was represented by Shumaker, Loop & Kendrick in district court and by Fish & Richardson at the ITC.