IN FOCUS MONDAY, APRIL 28, 2003 INTELLECTUAL PROPERTY

General Motors’ Hummer Avanti’s XUV infringes its H2, below, is based on vehicle’s trade dress, GM the military’s ‘Humvee.’ claims in a suit. WIDE WORLD PHOTOS / AP Look-alikes in combat General Motors’ infringement suit against Avanti Motor Corp. over its XUV is set for trial in June. 60034 (E.D. Mich. filed Feb. 14, 2003). cost more than $100,000, and AM By Jeffrey L. Eichen With GM’s claims scheduled for trial in General never sold more than 900 in a SPECIAL TO THE NATIONAL LAW JOURNAL June, how the court decides this case year—a trivial number compared to TRADE DRESS LAW has been used to protect could literally determine the shape of cars mass-produced models. But AM General against copying almost everything from available in the future. continued to promote the Hummer’s leather handbags and blue AM General Corp. shape and image in print advertisements. jeans to drill bits and even TRADEMARK developed the original High The Hummer’s success eventually Mexican restaurants. But Mobility Multipurpose Wheeled Vehicle, attracted the interest of much larger now, automobile manufacturers are or “Humvee,” for the U.S. military in the General Motors. At the time, GM was increasingly turning to trade dress law to 1980s. The Humvee played a celebrated exploring the possibility of developing its keep competitors from selling similar- and highly visible role in the 1991 Gulf own version of a premium, muscular SUV, looking cars. In February, for example, War, after which actor Arnold Schwar- code-named “the Chunk.” But, rather General Motors filed suit against a small- zenegger urged AM General to create a than spend the money to create a brand er competitor—Avanti—which, accord- consumer version—eventually called the name and image from scratch, GM ing to GM, is selling a sport utility vehicle “Hummer.” Given the truck’s renown as a purchased the Hummer brand and a that copies the shape of GM’s wildly “hero” of the Gulf War and its new controlling interest in AM General. So successful Hummer H2. General Motors association with Hollywood actors, AM the Chunk became a smaller, somewhat Corp. v. Avanti Motor Corp., No. 03-CV- General found there was considerable less expensive (but more drivable) version Jeffrey L. Eichen, a partner at Venable LLP, demand for the heavy, expensive, but of the Hummer called the H2. focuses his practice on litigation of patent, nearly indestructible Hummers. Like its older sibling the Hummer (or trademark, copyright and trade secret By 1999, the Hummer was widely H1, as it is now called), the H2’s motif disputes, as well as negotiating patent and known, although the actual number of is everywhere rectangular and utilitari- trademark licensing agreements. vehicles on the road was small. The truck an—almost to the point of ugliness. Its THE NATIONAL LAW JOURNAL overall shape, passenger compartment, trade dress, trademark dilution and the hood, the front wheel flares, the windshield, windows, front grille and rear common law trademark infringement. tail-light arrangement and the fact that hatch are all squat, wide rectangles, and GM also filed an extensive motion for the XUV features sliding rear doors (like a every edge of the bodywork is protected by preliminary injunction—requesting that minivan) and a retractable rear roof flared mudguards or rails. the court enjoin Avanti from continuing section—as a homage to Studebaker’s The H2’s austere looks, off-road to exhibit or sell the Studebaker XUV. 1963 station wagon with the same feature. competence and military heritage created Unlike GM, Avanti manufactures But, even conceding these differences, a wildly successful product for GM. and sells limited-production, hand-built GM’s list of similar design cues is According to one newspaper article, by cars and SUVs, primarily to wealthy extensive—including a similar overall December 2002, GM had sold more than enthusiasts. Avanti uses the brand names outline or profile, three nearly identical 16,000 H2s in only five months. See Avanti and Studebaker—both of which rectangular windows, a similar high belt Michael McCarthy, “Hummer H2 makes are well-known to car collectors and his- line, a similar windshield, nearly identical impression despite torians as brands from shape and placement of side signal lights, SUV backlash,” USA GM claims that the XUV the 1950s and 1960s. similar door handles and trim, similar Today, Dec. 26, 2002, In 1999, Avanti mirrors, similar roof rack, nearly identical at 7B. GM had only a infringes the H2’s ‘world- decided to develop a hood latches and identical placement and 10-day supply on hand utility-type vehicle. style of embossing the brand name of and waiting lists famous’ trade dress. Studebaker has a the vehicle on the rear hatch. Besides, on throughout the coun- 150-year history of the highway at 60 mph, how many try—and H2s were selling at full sticker making military and civilian vehicles, of Avanti’s subtle differences will be price, without the discounts or incentives including heavy trucks and amphibious noticeable anyway? Neither party consid- being offered to sell other GM brands. vehicles used extensively in World Wars I ers this question. In February 2003, GM discovered that and II. And, given the enormous market- On March 11, after submitting their Avanti was debuting an “extreme” SUV— ing and development costs, Avanti literal- papers for and against a preliminary or XUV, as Avanti called it—at the ly bet the company’s future on the success injunction, the parties and the court met Chicago Auto Show that looked remark- of its new XUV. and agreed that, instead of a preliminary ably similar to the H2. Avanti was publi- To be sure, the XUV’s overall shape injunction, the case would proceed direct- cizing the XUV as a revival of its and motifs are strikingly similar to the ly to trial in June—giving the parties just Studebaker brand name and apparently H2’s, although Avanti claims that the 60 days to complete their discovery. had referred to the XUV as a “boxy, similarities come not from copying but As for the legal standards governing Hummer-like vehicle” in one news article. from similar functional constraints. automotive trade dress, there is a long According to a survey conducted by GM According to Avanti, the squat, rectangu- history of manufacturers bringing such at the Chicago Auto Show, 100% of the lar shape is one of only a limited number claims, but the cases do not give respondents who saw the Studebaker of designs that will permit the vehicle to consistent answers to the issues these XUV said it “reminded” them of the H2, handle severe off-road use while maximiz- claims raise. Recent decisions have and nearly 60% said they believed that ing the amount of interior room available recognized that a car’s shape and design the XUV was manufactured or licensed by for passengers and their gear. Avanti cites are a type of “product configuration” trade GM. A number of media outlets, such as a number of different well-known off-road dress, and therefore, according to the U.S. CNN, Auto Week and Auto News, also vehicles that served as the “starting point” Supreme Court’s decision in Wal-Mart v. commented on the similarities in appear- for its design—including the Toyota Land Samara, 529 U.S. 206 (2000), they ance between the two. And a GM design Cruiser, old Series I and II Land Rovers must satisfy some particularly high expert visited the Auto Show to examine and the Mercedes Gelädenwagen. Avanti requirements to be entitled to protection. the XUV and concluded that Avanti had claims it chose the XUV’s shape for its In Wal-Mart, the Supreme Court held copied the H2 almost line for line. basic utility, not for aesthetic or marketing that a product’s shape and design (as purposes—and certainly not for its opposed to its packaging) can never GM’s suit against Avanti similarity to the H2. be “inherently distinctive” (and thus Within hours of the XUV’s debut, GM In response to the accusation of automatically entitled to trademark filed suit against Avanti in the U.S. copying, Avanti also points to differences protection) because shape and design District Court for the Eastern District of in the two designs. Among other things, serve not only to identify the source of a Michigan for infringement of the H2’s there are noticeable differences in the product but also to make the product “world-famous and inherently distinctive” front grille and headlights, the pitch of more pleasing to a consumer’s eye and MONDAY, APRIL 28, 2003 more desirable to purchase. In recognition the accused infringer argued that it involving GM’s H2 as the defendant, of the aesthetic goals of many product cannot be held liable for trade dress no less—the 7th Circuit held that post- designs, the Supreme Court held that infringement because the infringing sale confusion is not applicable in product configuration (that is, shape and product is sold under circumstances in automotive trade dress cases. AM General design) could only be protected as trade which no confusion or mistake is even Corp. v. DaimlerChrysler Corp., 311 F.3d dress if there were evidence of such possible. And in each case, the court 796, 827-28 (7th Cir. 2002). The issue widespread advertising, use and recogni- responded that the relevant audience was was whether Chrysler could prevent GM tion that a court could find that the not the buyers, but others who saw the from using a front-grille design for its H2 product configuration had acquired buyers wearing and enjoying the product that is similar to Chrysler’s for its Jeep. secondary meaning. in public and could be mistaken as to The court wrote: “DaimlerChrysler And this is a particularly heavy burden its source. believes that a...consumer...who sees an to meet. In Carroll Shelby Licensing Inc. v. Courts used this reasoning against H2 will think the H2 is made by, or Superformance Int’l Inc., 2002 WL defendants for copying the “red tab” label somehow associated with, Jeep....To the 1934301 (D. Mass. Aug. 21, 2002), the and back pocket stitching of Levi-Strauss extent any such association might arise, court found that Carroll Shelby and blue jeans, the shape and design of it does not amount to the sort of post- Ford had failed to present sufficient Hermès handbags and even the shape and sale confusion that supports an infringe- survey evidence that “the primary signifi- design of quick-change drill chucks. See, ment action.” cance of the [Shelby] Cobra shape in the e.g., Loris Sportswear U.S.A. Inc. v. Levi Cases involving car conversion outfits minds of consumers is to identify Shelby Strauss & Co., 799 F.2d 867, 872-73 (2d and aftermarket parts makers also seem to as the single producer [of the car].” Cir. 1986); Hermès International v. Lederer reject post-sale confusion as a basis for Instead, the court followed the presump- De Paris Fifth Avenue Inc., 219 F.3d 104, infringement. See Ford Motor Co. v. Ultra tion described in Wal-Mart that a prod- 107-09 (2d Cir. 2000); and Insty*Bit Inc. Coachbuilders Inc., (C.D. Calif. 2000) and uct’s design and configuration does not v. Poly-Tech Industries Inc., 95 F.3d 663, Chrysler Corp. v. Vanzant, 44 F. Supp. 2d serve as a brand identifier and—on this 671-72 (8th Cir. 1996). 1062 (C.D. Calif. 1999). basis—granted the defendant’s motion But does the same reasoning apply in And what do these cases mean for the for summary judgment. Will GM be able cases involving the shape and design future of automobile design? For one, the to show that the “primary significance” of automobiles? Different courts have outcome of GM’s claims against Avanti in of the H2’s shape is to identify GM as answered this question differently. June will tell both smaller and larger the H2’s single producer? The answer In Ferrari SpA Esercizio Fabriche manufacturers exactly how closely they is unclear. Automobili e Course v. Roberts, 944 F.2d can follow the shape, design and styling 1235, 1245 (6th Cir. 1991), the 6th U.S. cues of their competitors’ models. And, Post-sale confusion Circuit Court of Appeals relied on regardless of the outcome of this case, car Also, to prove trade dress infringe- post-sale confusion as the key to finding a manufacturers will continue to respond to ment, a plaintiff must show a “likelihood maker of fiberglass kit cars liable for trade uncertainty in trade dress law by running of confusion.” But there is considerable dress infringement for copying the shape more advertising devoted solely to their debate in the case law as to exactly whose and design of two very expensive and very vehicle’s shape as a source identifier— “confusion” is relevant. Or, to put it desirable models of Ferrari: the Daytona such as, for example, recent television differently, when paying $50,000 or Spyder and the Testarossa. According to and magazine advertisements for the $75,000 for a premium SUV, the purchas- the 6th Circuit, “[i]f the replica Daytona Volkswagen Beetle with no text or titles, er knows perfectly well that he is buying looks cheap or in disrepair [while out on just the car’s rounded shape. Since trade either an H2 or an XUV or some other the roads], Ferrari’s reputation for rarity dress law favors this sort of advertising, brand. So, if purchasers are not confused, and quality could be damaged.” In other consumers can expect to see a lot more is it enough that others who see the SUV words, the relevant audience for testing of it in the future. from a distance at a trade show or out on confusion was not direct purchasers, who This article is reprinted with permission from the April 28, the roads might be confused? would certainly know an original Ferrari 2003 edition of THE NATIONAL LAW JOURNAL. © 2003 ALM Properties, Inc. All rights reserved. Further In trade dress law, confusion of people from a replica, but a much larger, duplication without permission is prohibited. For informa- tion, contact American Lawyer Media, Reprint Department other than the purchaser is called anonymous pool of people who might see at 800-888-8300 x6111. #005-05-03-0007 “post-sale confusion” and comes from a the replica on the road and mistake it line of cases involving a number of highly for the real thing. visible (and easily counterfeited) con- But not all courts agree with the sumer products. In each of these cases, reasoning in Ferrari. In one recent case—