AM General Corporation v. DaimlerChrysler Corporation
311 F.3d 796 (2002)
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Rule of Law:
To establish a protectable "family of marks" in trade dress, the claimant must prove the family existed and was recognized by the public as a source-identifier before the alleged infringer's first commercial use of a similar mark. The defense of laches may bar a trademark claim if the trademark holder unreasonably delays in asserting its rights, causing prejudice to the defendant.
Facts:
- Since the 1940s, DaimlerChrysler and its predecessors used various vertically slotted grilles on Jeep vehicles, with designs and slot counts varying across different models and years.
- In 1981, AM General designed the military "Humvee" featuring a grille with vertical slots, finalizing a seven-slot version by 1982.
- In 1983, American Motors Corporation, then-owner of both Jeep and AM General, sold AM General to LTV Corporation, transferring all intellectual property rights related to the Humvee design to AM General.
- AM General began delivering Humvees with the seven-slot grille to the U.S. government for commercial use in 1985.
- In 1992, AM General launched the civilian "Hummer" (later H1), which used the same seven-slot grille as the Humvee, and obtained a federal trademark registration for the vehicle's front end, including the grille, in 1996 without opposition from DaimlerChrysler.
- In June 1999, General Motors (GM) announced it would acquire the Hummer brand from AM General and develop a new, more mainstream SUV called the H2.
- The planned H2 vehicle was designed to retain the visual identity of the H1, including a seven-vertical-slot grille.
- On December 22, 1999, the day after the GM-AM General transaction closed, a DaimlerChrysler attorney formally objected to GM's use of the grille design on the forthcoming H2.
Procedural Posture:
- AM General Corporation and General Motors Corporation (GM) filed a declaratory judgment action in federal district court against DaimlerChrysler Corporation.
- DaimlerChrysler filed counterclaims against GM for federal trademark dilution and infringement.
- DaimlerChrysler moved for a preliminary injunction to prevent GM from launching the H2 vehicle with its intended grille design.
- The district court held an eight-day evidentiary hearing on the motion.
- The district court issued a memorandum and order denying DaimlerChrysler's motion for a preliminary injunction.
- DaimlerChrysler, as the appellant, filed an appeal of the district court's denial to the U.S. Court of Appeals for the Seventh Circuit.
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Issue:
Does the front grille design of General Motors' H2 sport utility vehicle likely dilute or infringe upon DaimlerChrysler's alleged family of marks for its Jeep grilles, warranting a preliminary injunction?
Opinions:
Majority - Bauer, Circuit Judge
No. The front grille design of the H2 does not likely dilute or infringe upon DaimlerChrysler's alleged family of marks, and therefore a preliminary injunction is not warranted. The Seventh Circuit adopts the district court's opinion, which found that DaimlerChrysler showed virtually no chance of success on the merits. The court reasoned that DaimlerChrysler failed to establish it had a protectable 'family of marks'—defined as seven to ten vertical slots—at the time of the Humvee's first commercial use in 1985. In 1985, while the classic CJ-grille was famous, Jeep also used numerous other grille designs that did not fit the 'family' definition, meaning no consistent, source-identifying family look existed. Furthermore, any dilution claim based on the single famous CJ-2A grille design is barred by the doctrine of laches, as DaimlerChrysler unreasonably delayed by not objecting to the nearly identical grille on the Humvee (since 1985) and the civilian H1 (since 1992). The doctrine of progressive encroachment does not save the dilution claim because dilution is not dependent on direct competition, and any dilution would have started with the H1. Finally, the trademark infringement claim fails because there is no likelihood of consumer confusion, given the significant differences in the vehicles' size, price, and branding, and the high degree of care consumers exercise when purchasing expensive automobiles.
Analysis:
This decision reinforces the critical temporal requirement for establishing a 'family of marks,' mandating that the family must have acquired secondary meaning before the junior user's entry into the market. It also provides an important clarification on the application of the progressive encroachment doctrine, distinguishing its use in infringement claims (where it can excuse delay until competition becomes direct) from dilution claims (where it is less applicable because dilution does not require competition). The court's detailed balancing of harms analysis serves as a powerful example of how overwhelming economic and public interest factors, such as investment and employment, can defeat a motion for a preliminary injunction, even where trademark law often presumes irreparable harm.
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