AM General Corp v. DaimlerChrysler Corp

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-1816
AM GENERAL CORPORATION and
GENERAL MOTORS CORPORATION,
Plaintiffs-Appellees,
v.
DAIMLERCHRYSLER CORPORATION,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Indiana, South Bend Division.
No. 01-CV-0134—Robert L. Miller, Jr., Judge.
____________
ARGUED OCTOBER 16, 2002—DECIDED NOVEMBER 18, 2002
____________
Before BAUER, COFFEY, and WILLIAMS, Circuit Judges.
BAUER, Circuit Judge. Plaintiffs AM General Corpora-
tion (“AM General”) and General Motors Corporation
(“GM”) brought a declaratory judgment action in the dis-
trict court asking the court to find that the front-end
grille design of their recently developed H21 sport utility
1
The Plaintiffs currently produce three lines of vehicles relevant
to this appeal. The “Humvee” originated as a military vehicle in
(continued...)
2 No. 02-1816
vehicle (“SUV”) does not dilute or infringe upon a trade-
mark held by the Defendant, DaimlerChrysler Corpora-
tion (“DaimlerChrysler”), for a similar looking grille on
DaimlerChrysler’s line of Jeep SUVs. DaimlerChrysler then
filed a motion for a preliminary injunction against GM’s use
of the grille design on the then yet-to-be released H2.2
After an eight-day hearing on the matter, the district
court denied DaimlerChrysler’s preliminary injunction find-
ing: 1) that DaimlerChrysler showed virtually no chance of
success on the merits of either its federal dilution or in-
fringement claims; and 2) that, even if DaimlerChrysler
did show a better than negligible chance of winning on the
merits, the balance of harms weighed heavily against
issuing the injunction.
DaimlerChrysler timely filed this appeal and raised the
following issues: 1) whether the district court erred in
applying the doctrine of progressive encroachment to its
dilution claim by finding that laches barred the claim even
though prior sales of H1 vehicles occurred in a different
market than the mainstream SUV market where the H2 is
1
(...continued)
the early 1980s and was later released for consumer sales in 1992
as the “Hummer.” The Hummer is now known, however, as the
H1. In late 1999, GM and AM General announced a partnership
to produce a smaller version of the H1, to sell within the main-
stream sport utility vehicle market, known as the H2. It is the
sale of the H2 that concerns DaimlerChrysler.
2
DaimlerChrysler’s preliminary injunction sought to prohibit GM
and AM General from launching sales of the H2 to the public with
the grille design currently used on the vehicle. GM and AM
General planned on introducing the H2 in July 2002 and during
the pendency of this appeal were able to do so. DaimlerChrysler
argues that this appeal is not moot and asks this Court to remand
the case for a new preliminary injunction hearing because further
sales of the H2 could be enjoined by the district court.
No. 02-1816 3
being sold; 2) whether the district court erred in finding
that DaimlerChrysler must prove that its grille design
achieved fame or distinctiveness before AM General or GM
began using a similar design in a different market; and
3) whether the district court improperly balanced the
harms of issuing the injunction by finding that the harm
to GM, AM General, and the public interest outweighed
DaimlerChrysler’s presumptive harm from the alleged dilu-
tion or infringement.
Because the district court issued a thorough and well-
reasoned memorandum opinion and order that does not
contain any error, we adopt the district court’s opinion
dated February 28, 2002, as our own and AFFIRM the
judgment of the lower court on all counts. Because the
memorandum opinion and order was not published, it is
appended below.
MEMORANDUM AND ORDER
This case is before the court on a motion for preliminary
injunctive relief based solely on claims of trademark
dilution and infringement arising under the Lanham Act,
15 U.S.C. §§ 1051 et seq.3 General Motors Corporation and
AM General Corporation filed this suit, principally as a
declaratory judgment action, against DaimlerChrysler Cor-
poration, but DaimlerChrysler seeks the preliminary in-
junction. DaimlerChrysler’s counterclaims against General
Motors and AM General allege that DaimlerChrysler owns
protectable trademark rights in a family of designs of the
grilles of its Jeep vehicles, and General Motors and AM
General intend to use a grille on a forthcoming vehicle that
3
This court has original jurisdiction over the subject matter of
this action pursuant to 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331
and 1338.
4 No. 02-1816
will infringe and dilute DaimlerChrysler’s family of marks.
DaimlerChrysler does not seek an injunction against AM
General, but since AM General is a party to the suit and
would be affected greatly by the requested injunction, the
court allowed AM General to participate fully in the evi-
dentiary hearing that took place from February 6-15, 2002.
The case involves two brands of motor vehicles (or
perhaps more accurately, sport utility vehicles). One brand
is Jeep. DaimlerChrysler owns the Jeep brand as the
successor corporation to Chrysler Corporation, American
Motors Corporation, Jeep Corporation, Kaiser Jeep Corpo-
ration, Willys Motors, Inc., and Willys-Overland Motors,
Inc. The court will refer to DaimlerChrysler Corporation
and all its predecessors in the Jeep brand simply as
“DaimlerChrysler.” The history of the Jeep brand (and the
pertinent grille configurations) is set forth in Part B of this
opinion.
The other brand of sport utility vehicle, or “SUV,” is the
Hummer brand, which has a far shorter biography. Part C
of this opinion relates that history in some detail. Briefly,
the Hummer was the civilian younger sibling of the military
Humvee; both the Hummer and the Humvee were owned
and produced by AM General Corporation, which was itself
part of other companies (including a Jeep predecessor to
DaimlerChrysler) throughout the vehicles’ histories. In
1999, AM General sold the Hummer brand to General
Motors Corporation. General Motors is producing (though
not yet selling) a lower-priced version of the AM General
Hummer. The companies now refer to the new, General
Motors Hummer as the “H2” and to the old AM General
Hummer as the “H1.” AM General is to assemble the H2
under contract with General Motors and continues to pro-
duce the H1 and the Humvee.
For the reasons that follow, the court denies the motion
for preliminary injunction.
No. 02-1816 5
A. PARTIES’ POSITIONS AND
APPLICABLE LEGAL PRINCIPLES
This case is about Jeep grilles and the grille General
Motors plans to use on the H2. DaimlerChrysler contends
that it has a family of marks that have featured consistent
and easily recognized common grille characteristics: seven
to ten vertical slots that appear to be stamped through a
planar surface. DaimlerChrysler calls this configuration the
Jeep grille design.
As the party seeking the preliminary injunction, Daimler-
Chrysler has the burden of demonstrating that it has a
reasonable likelihood of success on the merits of its underly-
ing claim, that it has no adequate remedy at law, and that
it will suffer irreparable harm without the preliminary
injunction; if DaimlerChrysler meets those burdens, the
court then must consider any irreparable harm the prelimi-
nary injunction might impose upon General Motors (the
only party against which the injunction is sought) and
whether the preliminary injunction would harm or foster
the public interest. Anderson v. U.S.F. Logistics (IMC), Inc.,
274 F.3d 470, 474 (7th Cir. 2001); Re/Max North Central,
Inc. v. Cook, 272 F.3d 424, 429-30 (7th Cir. 2001).
A party with no chance of success on the merits cannot
attain a preliminary injunction. Kiel v. City of Kenosha, 236
F.3d 814, 815 (7th Cir. 2000). In the first phase of the
analysis, the court decides only whether the plaintiff has
any likelihood of success—in other words, a greater than
negligible chance of winning, Washington v. Indiana High
Sch. Ath. Ass’n, 181 F.3d 840, 845 (7th Cir. 1999)—but in
the second phase, the court evaluates that likelihood of
success, Storck USA, L.P. v. Farley Candy Co., 14 F.3d 311,
314 n.1 (7th Cir. 1994), as the analysis turns to a “sliding
scale” under which a lesser likelihood of success can be
made sufficient by a greater predominance of the balance of
harms. Ty, Inc. v. The Jones Group, Inc., 237 F.3d 891, 895
6 No. 02-1816
(7th Cir. 2001); Eli Lilly & Co. v. Natural Answers, Inc., 233
F.3d 456, 461 (7th Cir. 2000). In performing this balancing,
the court bears in mind that the purpose of a preliminary
injunction is “to minimize the hardship to the parties
pending the ultimate resolution of the lawsuit.” Platinum
Home Mortgage Corp. v. Platinum Financial Group, Inc.,
149 F.3d 722, 726 (7th Cir. 1998) (quoting Faheem-El v.
Klincar, 841 F.2d 712, 717 (7th Cir. 1988)).
To prevail on the merits of either of its claims, Daimler-
Chrysler must show that it has a protectable mark—in this
case, a “family of marks,” which ordinarily means a group
of marks, each individual member of which uses a common
element that consumers associate with the mark’s owner.
Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 395 (7th
Cir. 1992). The marks to which DaimlerChrysler points con-
sist of trade dress that varies with respect to the number
of slots.
To prevail at trial on its dilution claim under 15 U.S.C.
§§ 1125(c) and 1127, DaimlerChrysler will have to prove
that its family of marks was famous before General Motors
adopted the intended H2 grille, that General Motors’s use
of the intended H2 grille is in commerce, and that General
Motors’s use of the intended H2 grille is likely to dilute
DaimlerChrysler’s family of marks. Eli Lilly & Co. v.
Natural Answers, Inc., 233 F.3d at 466; Syndicate Sales,
Inc. v. Hampshire Paper Corp., 192 F.3d 633, 639 (7th Cir.
1999). Unlike a trademark infringement claim, a dilution
claim requires no showing of consumer confusion as to
source. 15 U.S.C. § 1127.
In deciding whether DaimlerChrysler’s family of marks
is “famous” within the meaning of the statute, the court is
to consider the family’s inherent distinctiveness or second-
ary meaning, the time and extent of DaimlerChrysler’s use
of the family in connection with motor vehicles, the dura-
tion and extent of DaimlerChrysler’s advertising and pub-
No. 02-1816 7
licity of the family, the size of the trading area in which
DaimlerChrysler uses the family of marks, the channels of
trade for motor vehicles, the degree of recognition of the
family in those trading areas and channels of trade,
whether and how others use similar marks, and whether
the family is registered. 15 U.S.C. § 1125(c)(1).
In deciding whether General Motors’s intended H2 grille
is likely to dilute DaimlerChrysler’s family of marks, the
court must consider the similarity of the grilles and the
strength of the DaimlerChrysler family. Eli Lilly & Co. v.
Natural Answers, Inc., 233 F.3d at 468. The type of dilution
that DaimlerChrysler alleges is “blurring,” which a leading
treatise describes as the risk that “[c]ustomers or prospec-
tive customers will see [DaimlerChrysler’s] mark used by
other persons to identify other sources on a plethora of
different goods and services. The unique and distinctive
significance of the mark to identify and distinguish one
source may be diluted and weakened. But no confusion as
to source, sponsorship, affiliation or connection has oc-
curred.” 4 J. Thomas McCarthy, McCarthy on Trademarks
and Unfair Competition § 24:68, at 24-120 (4th ed. 2001).
DaimlerChrysler contends that its trade dress family has
trademark priority over the intended H2 grille in the main-
stream SUV market, and that as a result, DaimlerChrysler
need only prove that its family is distinctive and famous as
of today, citing Johnny Blastoff v. Los Angeles Rams Foot-
ball Co., 188 F.3d 427, 434 (7th Cir. 1999).
To prevail at trial on its trademark infringement claim,
DaimlerChrysler will have to prove that its family of marks
is distinctive and that the intended H2 grille is likely to
cause consumers to believe mistakenly that the H2 is
manufactured, sponsored, or endorsed by, or affiliated or
connected with, the Jeep brand. Johnny Blastoff, Inc. v. Los
Angeles Rams Football Co., 188 F.3d at 436. In determin-
ing likelihood of confusion, the court considers the type of
8 No. 02-1816
trademark in issue, the similarity of the designs and the
products, the identity of retail outlets and purchasers,
identity of advertising media utilized, any evidence of
actual confusion, and whether General Motors intends to
pass off its product as that of DaimlerChrysler. Thomas
& Betts Corp. v. Panduit Corp., 138 F.3d 277, 296 (7th Cir.
1998). DaimlerChrysler points particularly to the likelihood
of “initial interest confusion,” which occurs when a con-
sumer is lured to a competing product by the competitor’s
similar trade dress. Eli Lilly v. Natural Answers, 233 F.3d
at 464.
With respect to irreparable harm, DaimlerChrysler relies
on the law’s presumption that trademark dilution or in-
fringement threatens irreparable injury for which there is
no adequate remedy at law. Abbott Lab. v. Mead Johnson &
Co., 971 F.2d 6, 16 (7th Cir. 1992); International Kennel
Club, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1092 (7th Cir.
1988). DaimlerChrysler contends that H2 vehicles (and
their grilles) will become rolling billboards on the nation’s
highways, and that DaimlerChrysler will lose its ability
to control the nature and quality of the vehicles associated
with Jeep vehicles.
General Motors, DaimlerChrysler contends, will not suffer
significant irreparable harm if a preliminary injunction is
issued and later found to be in error. General Motors has
designed an alternative grille for the H2. Depending on the
extent of pre-launch testing General Motors chooses to do,
DaimlerChrysler contends, the production of the H2 would
be delayed by no more than eight weeks, if it is delayed at
all. The public interest favors the injunction, Daimler-
Chrysler contends, because the enforcement of trademark
laws protects consumers from confusion.
DaimlerChrysler contends that its trade dress family is
not functional, noting that nearly every other motor vehicle
manufacturer has managed to find a way to cool the engine
No. 02-1816 9
without using vertical slots. General Motors contested this
point in its pre-hearing briefs, but presented no evidence
or argument at the hearing to refute DaimlerChrysler’s
contention on nonfunctionality. DaimlerChrysler’s position
seems right and is unrebutted, so the court assumes for
today’s ruling that the grille configurations on Jeep models
are not functional and have not been functional.
General Motors contends that DaimlerChrysler is judi-
cially estopped from claiming trademark protection for the
trade dress family or that the intended H2 grille dilutes and
infringes that family because DaimlerChrysler did not iden-
tify either the H1 grille or earlier Jeep grilles as prior art in
its 1999 application for a design patent on the Jeep Grand
Cherokee grille. DaimlerChrysler argues that there is no
inconsistency between its position then and its position
today because different standards govern design patent
protection (and what constitutes invalidating prior art) and
trademark protection.
General Motors also asserts an affirmative defense of
laches, contending that DaimlerChrysler unreasonably de-
layed in objecting to the intended H2 grill, first from 1983
to 1991, while AM General was selling the Humvee, then
from 1992 to 1999, while AM General was selling the H1,
and then from June 1999 to December 1999, the time
between the announcement of General Motors’s acquisition
of the Hummer brand and General Motors’s announcement
of the H2.
With respect to 1983-1991, DaimlerChrysler contends
that it had licensed AM General to use the Jeep grille
design on the Humvee, so DaimlerChrysler could have
taken no reasonable action. With respect to 1992-1999,
DaimlerChrysler contends that since AM General had
represented, in the course of registering its trademark,
that the H1 didn’t compete with any Jeep product,
DaimlerChrysler’s failure to object could have led to rea-
10 No. 02-1816
sonable reliance on DaimlerChrysler’s silence. The remain-
ing six months in 1999, DaimlerChrysler says, simply is too
brief a time to support a laches defense. DaimlerChrysler
also relies on the doctrine of progressive encroachment,
which tolerates inaction by the owner of a mark until the
threat to the mark grows into substantiality. Until the
announcement of the H2, DaimlerChrysler argues, the
Hummer vehicles were not a matter of concern because they
constituted a market unto themselves. DaimlerChrysler
argues that the doctrine of progressive encroachment is
available to one claiming dilution as well as to one claiming
infringement; General Motors disagrees.
B. JEEP BRAND HISTORY
The Jeep became well-known as an American military
vehicle during World War II. In 1940, Willys-Overland
Motors, Inc. produced a prototype for the nation’s first
quarter-ton military truck, won the production contract
through a competitive bidding process, and in 1941, began
producing what would become 350,000 Jeeps for the war
effort.
As peace followed war in 1945, a commercial version of
the Jeep appeared for sale to retail consumers. Willys-
Overland manufactured the first civilian Jeep, employing
the military Jeep’s grille design of seven perfectly vertical
slots that appear to have been stamped through a solid
sheet of metal. As discussed in the next section, AM Gen-
eral also traces its corporate heritage back to Willys-
Overland Motors.
Jeep models for consumers came and went in the ensuing
years, with periodic change in the brand’s ownership. Henry
J. Kaiser purchased Willys-Overland in 1953, and the
company became Willys Motors, Inc. which continued to
manufacture Jeeps (and considerable lines of military and
postal vehicles) until 1963, when the company’s name was
No. 02-1816 11
changed to Kaiser Jeep Company. In 1964, in the wake of
the demise of the Studebaker Corporation as a motor
vehicle manufacturer, Kaiser Jeep acquired a Studebaker
plant in South Bend, Indiana, and assumed a Studebaker
contract for the production of military trucks and produced
postal trucks of varying sizes. In 1967, Kaiser Jeep formed
a Defense and Government Products Division to deal ex-
clusively with government vehicles.
Kaiser Jeep manufactured the Jeep line from 1962 until
1970, when American Motors Corporation purchased Kaiser
Jeep from Kaiser Industries. In 1971, American Motors
Corporation established two wholly owned subsidiaries:
Jeep Corporation, and AM General Corporation, which pre-
viously had been the Defense and Government Products
Division.
Jeep Corporation continued to produce a product line of
Jeep vehicles as an American Motors subsidiary until 1987.
Its sister corporation, AM General, continued to develop
products for use as military and postal vehicles, and to
build them pursuant to contracts awarded by the govern-
ment. In 1979, AM General started preliminary design
work on the “M998 Series High Mobility Multi-Purpose
Wheeled Vehicle”—the “HMMWV,” in the inevitable gov-
ernmental acronym, or “Humvee,” as it came to be named
for purposes of verbal communication. After being awarded
a prototype contract in 1981, AM General was awarded a
$1.2 billion contract to produce 55,000 Humvees over a five-
year period (eventually increased to $1.6 billion to produce
70,000 Humvees).
Also in 1983, LTV Corporation acquired AM General from
American Motors, and established AM General as a wholly
owned subsidiary of the LTV Aerospace and Defense Com-
pany. AM General was awarded contracts for the production
of more Humvees in 1989 and 1994.
In 1987, Chrysler Corporation acquired American Motors
Corporation, and with it, Jeep Corporation. Chrysler con-
12 No. 02-1816
tinued (and from time to time, modified) the Jeep line. A
1998 merger eliminated the Chrysler Corporation and
produced DaimlerChrysler Corporation, which continues to
produce the Jeep line of vehicles. Except for the period in
which AM General and Jeep Corporation were American
Motors subsidiaries, the precise corporate identity of the
producer of civilian Jeeps is unimportant to today’s deci-
sion.
Jeep, now on the scene in one form or another for sixty
years, is widely known. For many years, Jeep was the only
manufacturer of four-wheel drive sport utility vehicles; that
monopoly within what was then a niche market (in compar-
ison, there are now fifty-two models of SUVs available in
the United States) focused the brand’s prominence. Jeeps,
and their grilles, have been depicted prominently in mili-
tary movies, television shows, toys, other licensed products,
and in billions of dollars of advertising. DaimlerChrysler
has obtained three federal trademark registrations that
encompass its grille designs; all depict what appears to be
a variant of the grille used on today’s Jeep Wrangler and
Jeep Liberty. The first registration, which reported a first
use of 1941, was issued in 1981 for “land vehicles.” The
second registration, which reported a first use in commerce
of March 10, 1986, was issued in 1987 for “utility land
vehicles.” The third registration, which reported a first use
in commerce of January 1, 1996, was issued in 1998 for
“sport utility vehicles.” The first two registrations no longer
are being used in the production of Jeep models; whether
DaimlerChrysler still produces either of those grilles for use
as replacement parts was unclear from the evidence at the
hearing.
Since 1945, DaimlerChrysler has sold tens of millions of
Jeep vehicles with what it calls the Jeep grille design.
DaimlerChrysler has advertised its vehicles down through
the years, with DaimlerChrysler and its dealers and dis-
tributors spending billions of dollars on nationwide adver-
No. 02-1816 13
tising and promotions that featured the grille. The grille
that appears on today’s Wrangler (and its headlamp open-
ings) appears prominently on many products shown in the
“Jeep Provisions Catalog,” and is the symbol of an annual
Jeep homecoming event called “Camp Jeep.”
Today, DaimlerChrysler sells three Jeep models: the
Wrangler, the Grand Cherokee, and the Liberty. Daimler-
Chrysler discontinued a fourth model, the Cherokee, in
2001.
C. HISTORY OF THE HUMVEE AND THE HUMMER
As already noted, AM General won the contract to pro-
duce the Humvee for the military during the rebuilding of
the United States armed forces in the 1980s. In February
1981, the U.S. Government invited proposals for a new
High Mobility Multipurpose Wheeled Vehicle, and AM Gen-
eral was one of five companies that submitted proposals.
AM General’s Technical Proposal included drawings depict-
ing the design of AM General’ s proposed Humvee vehicle,
including a grille design with nine vertical pill-capsule-
shaped slots that were slightly taller than the round head-
lights that “bookended” the slots.
AM General was among three companies awarded “Phase
I” contracts in July 1981; those contracts provided funding
for production of prototype HMMWV vehicles for the U.S.
military to test. In July 1982, AM General applied to the
U.S. Patent and Trademark Office (“the PTO”), for a design
patent on the Humvee, including the vertically slotted grille
design. That design patent was never issued. In March
1983, the government selected AM General to manufacture
the HMMWV.
During the government’s testing of the Humvee proto-
types, AM General engineers made various design modifica-
tions based on performance issues raised by the govern-
14 No. 02-1816
ment; in one of those changes, the engineers moved the
headlamps inboard and eliminated the two outer slots of
the nine-slotted grille. The Humvee’s seven-slotted grille
first appeared in a blueprint completed in November 1982.
Since the government’s 1983 acceptance of the final produc-
tion version of the Humvee, every Humvee (apart from
some 3,000 upper-armored vehicles) has employed the AM
General engineers’ front grille design consisting of seven
vertical slots. AM General sent production versions of the
Humvee to the military in 1984 for more testing but didn’t
begin shipping Humvees to the military until March 1985.
American Motors sold its AM General stock and assets to
LTV Corporation on July 24, 1983.
The Humvee was featured quite favorably in 1990 news
coverage of Operation Desert Shield during the months in
which forces gathered in the Persian Gulf for what became
Operation Desert Storm. Building on that renown as a
Desert Storm “hero,” AM General launched a commercial
vehicle then called the “Hummer” (now called the “H1”) in
1992. The H1 was (and continues to be) equipped with liter-
ally the same hood as the Humvee, with the same vertically
slotted grille design.
AM General adopted its “Hummer icon”— a silhouette of
an approaching H1—in 1992. The logo displays in black the
vertical, bisected windshield, the side mirrors, the tires and
undercarriage/suspension, while highlighting the head-
lights, the front grille’s seven vertical openings, the upper
(hood) grille, and a series of three circles below the bumper
that were not identified at the hearing. The icon appeared
on promotional items accompanying the national launch of
the H1 in 1992, and has appeared since on all subsequent
Hummer dealer signs, company stationery, and business
cards. AM General adopted the icon as its official company
logo in 1993. Since 1994, several items of Hummer mer-
chandise included in a catalog (“Hummer Stuff”) features
No. 02-1816 15
the icon on such items as mugs, golf balls, key chains, post-
ers, T-shirts, caps, toys, sew-on patches, and a tie tack/lapel
pin that shows only the H1 front end, including the grille.
In 1993, AM General applied for a U.S. trademark reg-
istration for the appearance of the front end of the Humvee,
which includes the headlight sockets, running light open-
ings, grille, and bumper. The application sought registra-
tion for trucks, and not just military trucks or high-end
sport utility vehicles. The examiner denied the application
on three grounds: it was not inherently distinctive (was not
a source identifier for consumers); it was merely ornamen-
tal rather than a source identifier; and it was likely to be
confused with another registration—the first of the three
registrations for the Jeep Wrangler grille/headlight configu-
ration. AM General twice sought reconsideration, with the
second effort producing approval and publication.
DaimlerChrysler monitored that application’s progress;
AM General sent DaimlerChrysler a request for a consent
AM General hoped to file in conjunction with its applica-
tion. DaimlerChrysler twice obtained extensions of time for
response, but ultimately filed no response. DaimlerChrysler
did not tell the PTO that the Hummer grille was the Jeep
grille, or that AM General was only a licensee of the mark
rather than the owner (an issue discussed later in this
opinion). In March 1996, the U.S. government issued AM
General an unrestricted registration of the design for use on
“trucks.” DaimlerChrysler asserted no right to the regis-
tered grille until late 1999. Every AM General sales bro-
chure for the H1 featured the Hummer grille; some included
the language: “Hummer, Humvee and the Hummer vehi-
cles’ grille designs are registered trademarks of AM General
Corporation.”
Since the launch of the H1, AM General’s Hummer bro-
chures and ads have used slogans like “Meet an American
Legend” and “The Legend Grows.” DaimlerChrysler con-
16 No. 02-1816
tends that the use of “Legend” lines is taken directly from
Jeep advertising; AM General says it used “Legend” slogans
to evoke the H1’s own military heritage. General Motors’s
H2 promotional materials and advertisements similarly
feature the vehicle’s front end (including the grille) and
make references to the “Legend.”
Many photographs that have appeared in the print media
over the last ten years have viewed the Humvee or H1 from
the front, which draws attention to the grille. AM General
paid for some of those promotions, but most appeared
without expense to AM General. Some of those photos of
approaching Humvees and/or H1s are found in ads by other
firms, such as Panasonic and Mastercard that obtained AM
General’s permission to use the vehicles in attempts to
associate their products and services with the Hummer
brand. These advertisements and photographs have ap-
peared in national publications such as the Wall Street
Journal and USA Today. AM General also licensed compa-
nies to use images of the Humvee (in which the grille is
featured prominently) to sell their own merchandise.
DaimlerChrysler never challenged AM General’s use of the
grille design on the Humvee, and until this litigation,
DaimlerChrysler had never objected to or challenged AM
General’s grille design on the H1.
While the H1 was gaining recognizability (though not
sales—at more than $100,000.00, AM General never sold
more than 900 H1s in a year), General Motors was explor-
ing the possibility of developing a very rugged four-wheel
drive SUV—code-named “The Chunk”—under an existing
General Motors brand. Market research was promising, but
faced with the need to spend hundreds of millions of dollars
to launch such a new vehicle, General Motors decided to
look into the Hummer, which (according to General Mo-
tors’s research) had a highly favorable image and was well-
known to the potential purchasers of such an SUV—qual-
ities that would be difficult to build from scratch for an
No. 02-1816 17
entirely new model. Negotiations ensued, and in June 1999,
AM General and General Motors announced their inten-
tions to enter into a contract that would transfer the
Hummer brand to General Motors and pursue new product
opportunities for the Hummer brand. Within days after that
press release, DaimlerChrysler was consulting its lawyers
concerning “legal issues in Hummer dispute” and “Hummer
litigation.” Despite those discussions, DaimlerChrysler said
nothing to General Motors.
On December 21, 1999, General Motors and AM General
entered into a series of agreements to transfer to General
Motors the Hummer brand and all intellectual property
rights embodied in the Hummer vehicle. General Motors
granted AM General exclusive production rights for the first
new model of Hummer vehicle; AM General agreed to con-
struct a brand new facility for that purpose; General Motors
gave AM General the continued right to use the Hummer
grille design on the Humvee.
The December 1999 General Motors-AM General agree-
ments contemplated a joint effort to manufacture, market,
and distribute the Hummer and new Hummer models, the
first of which was the H2. The H2 was to be about the same
size as the very large original H1 (a bit taller, a bit nar-
rower), but would include luxury features not available on
the H1. The H2 was to retain the H1’s visual brand identity
and character, in the hopes of endowing it with the broad
recognition and favorable identity General Motors’s con-
sumer research found in the H1. That research found the
H1’s front end, including the grille, to be one of several
visual cues important to consumers; accordingly, the grille
General Motors intends to use on the H2 is a narrower
version of the grille used on the H1 and the Humvee before
it, with the configuration of vertical slots that appear in the
Hummer front end registration.
On December 22, 1999, the day after the transaction
closed, a DaimlerChrysler attorney notified General Motors
18 No. 02-1816
of DaimlerChrysler’s objection to the manufacture and sale
of any new vehicle bearing the H1’s grille design.
General Motors unveiled an H2 concept vehicle at the
January 2000 Detroit auto show and featured that concept
vehicle on its Hummer web site until replacing it with
pictures of the proposed H2 production vehicle, which
brought no change in the grille design. Since January 1990,
General Motors has promoted the H2 vehicle extensively.
The H2 has appeared in auto shows, the Hummer web site,
in press coverage on television, in auto enthusiast maga-
zines, and in newspapers.
The H2 is comparable in size to the H1 in all but width
and is considerably larger than any Jeep vehicle available
in the United States. The word “H-U-——E-R” appears on
the grille,4 the rear bumper, and on each of the four wheels.
“H2” appears on the left and right front doors. The H2’s
base price at launch is expected to be at least $47,900.00;
options, dealer charges, and taxes will take the average
consumer transaction over $50,000.00.
Vertically slotted grills have appeared occasionally on
other SUVs down through the years. The current model of
the Lexus RX-300 (introduced in 2001) has ten bars that
appear to create ten slots, but the slots don’t appear to have
been stamped through a planar surface. The current model
of the Kia Sportage (which was introduced in January 2002)
has five slots. DaimlerChrysler sent letters to both Toyota
(which makes the Lexus) and Kia warning that those grilles
appeared to infringe upon the Jeep grille design. Both of
those letters were dated January 31, 2002, five days before
4
General Motors added that lettering after DaimlerChrysler
complained about the grille’s similarity to what DaimlerChrysler
considers the Jeep grille design. The black letters on the chrome
grille appear on the vertical sections that divide the slots. From
any significant distance, the letters are not easily seen.
No. 02-1816 19
this preliminary injunction hearing was scheduled to be-
gin.5
D. THIRD PARTY CONCERNS
AM General already is producing fully assembled pilot
H2s for distribution to dealers for sale to consumers; AM
General is scheduled to be in full production by March 29.
AM General has committed more than $30 million to hire
and train the H2 plant’s salaried and hourly work force. By
the time of the hearing, AM General had hired about 470 of
the 1,000 employees for the H2 plant, and was working
toward the hiring of the others. Many of these people had
quit their previous jobs to take employment at the H2 plant,
and some have relocated or are in the process of relocating.
AM General employees will complete a total of 170,000
training hours preparing for their jobs at the H2 plant. If
the H2 plant is closed for any period of time, employees will
lose money and suppliers will lose anticipated sales; those
losses, of course, increase with the length of the shutdown.
In anticipation and aid of new jobs, the State of Indiana
and St. Joseph County (in which the AM General plants are
located) provided millions of dollars to AM General in tax
abatements, tax credits, training grants, and road construc-
tion. St. Joseph County, with contribution from AM Gen-
eral, purchased and demolished some forty homes on what
is now the H2 plant site and paid to relocate the residents.
General Motors loaned AM General $235 million to design,
build, and equip the H2 plant.
5
It is unclear how DaimlerChrysler might define its trade dress
in any dilution or infringement suit against Toyota or Kia; the
definition advanced in this case would not seem to encompass the
five-slotted Kia grille or the unstamped Lexus grille.
20 No. 02-1816
E. LIKELIHOOD OF SUCCESS: GENERALLY
DaimlerChrysler brings essentially two claims. First, it
contends that General Motors’s use of the planned H2 grille
will dilute its mark in the “Jeep grille design.” The Federal
Trademark Dilution Act, 15 U.S.C. §§ 1125(c) & 1127,
amended the Lanham Act to address the “lessening of the
capacity of a famous mark to identify and distinguish goods
or services,” Syndicate Sales, Inc. v. Hampshire Paper
Corp., 192 F.3d at 639 (quoting 15 U.S.C. § 1127), and to
“protect[ ] the trademark owner from the erosion of the
distinctiveness and prestige of a trademark,” Eli Lilly & Co.
v. Natural Answers, Inc., 233 F.3d at 466 (internal quota-
tion marks omitted).
To succeed on the merits of its dilution claim, Daimler-
Chrysler must prove each of the following: (1) that the mark
is famous; (2) that General Motors adopted the mark after
the mark became famous; (3) the infringer diluted the
mark; and (4) the defendant’s use is commercial and in
commerce. 15 U.S.C. § 1125(c)(1); Syndicate Sales, 192 F.3d
at 639. The Act protects non-functional product configura-
tion against dilution to the same extent as any other
trademark. See, e.g., Thomas & Betts Corp. v. Panduit
Corp., 138 F.3d at 297; Computer Care v. Service Sys.
Enters., Inc., 982 F.2d 1063 (7th Cir. 1992). Dilution differs
from trademark infringement; it does not require a showing
of consumer confusion as to source. See 15 U.S.C. § 1127.
15 U.S.C. § 1125(c)(1) sets forth a non-exhaustive list of
factors to be considered in deciding whether a mark is
distinctive and famous:
(A) the degree of inherent or acquired distinctiveness
of the mark; (B) the duration and extent of use of the
mark in connection with the goods and services with
which the mark is used; (C) the duration and extent of
advertising and publicity of the mark; (D) the geograph-
ical extent of the trading area in which the mark is
No. 02-1816 21
used; (E) the channels of trade for the goods or services
with which the mark is used; (F) the degree of recogni-
tion of the mark in the trading areas and channels of
trade of the mark’s owner and the person against whom
the injunction is sought; (G) the nature and extent of
use of the same or similar marks by third parties; and
(H) whether the mark is federally registered . . . .
If the junior mark would weaken—“blur”—the senior
mark’s “ability to serve as a unique identifier of the plain-
tiff’s product,” it is likely to dilute. Eli Lilly & Co. v.
Natural Answers, Inc., 233 F.3d at 466. A likelihood of
dilution is proven by reference to the marks’ similarity and
the senior mark’s strength. Eli Lilly v. Natural Answers,
233 F.3d at 468.
DaimlerChrysler’s second claim is that the H2 grille in-
fringes its trademark. To prevail on the merits of this claim,
DaimlerChrysler will have to prove both that the Jeep grille
design is distinctive, and that the grille on the H2 is likely
to cause consumers to believe mistakenly that the H2 is
manufactured, sponsored, or endorsed by, or affiliated or
connected with, the Jeep brand. Johnny Blastoff, Inc. v. Los
Angeles Rams Football Co., 188 F.3d at 436.
In determining likelihood of confusion, the court looks to:
(a) the similarity of the trademarks or trade dresses; (b) the
area and manner of concurrent use (including the similarity
of the products on which the trademarks or trade dresses
are being used); (c) the degree of care likely to be used by
consumers; (d) the strength of the plaintiff’s trade dress; (e)
actual confusion; and (f) whether the defendant intended to
pass off its product as that of the plaintiff. Thomas & Betts
Corp. v. Panduit Corp., 138 F.3d at 296.
F. FAMILY OF MARKS
DaimlerChrysler relies on what it calls the “Jeep grille
design,” which John Sgalia (DaimlerChrysler’s lead Jeep
22 No. 02-1816
designer) defines as seven to ten vertical slots that appear
to be stamped through a planar surface. DaimlerChrysler
has not used the “Jeep grille design” on all its products, and
Mr. Sgalia’s definition does not appear in DaimlerChrysler
documents (until Mr. Sgalia formulated the definition the
day before his deposition), but the family’s definition need
not be written and need not be used on all products.
Motorola, Inc. v. Griffiths Electronics, Inc., 317 F.2d 397,
400-01 (C.C.P.A. 1963). DaimlerChrysler contends that the
history of Jeep vehicles includes a family of marks that
share those elements.
DaimlerChrysler’s pre-discovery brief in support of its
preliminary injunction request spoke of a “Jeep grille
design,” but its post-discovery brief refers to a family of
marks. DaimlerChrysler takes this position because it has
used a variety of grilles that fit within its definition of the
Jeep grille design, and many of those grilles are quite dis-
similar in appearance.
DaimlerChrysler’s counterclaim alleges that the intended
H2 grille—which consists of seven vertical slots that appear
to be stamped into a planar surface—will dilute its asserted
family of marks comprising the “Jeep grille design,” and
will infringe that family of marks by confusing consumers
into a mistaken belief that Jeep manufactures, sponsors, or
is associated with the H2. DaimlerChrysler’s preliminary
injunction motion asks the court to enjoin General Motors
from proceeding with the manufacture, marketing, and sale
of the H2 with its intended grille.
While the Humvee and the H1 literally use the same
grille, the H2 grille will be essentially the same, except
that it will be presented in chrome rather than in the
plastic comprising the front of the vehicle. Accordingly,
DaimlerChrysler must show that its family of marks existed
at the time of the first commercial use of the intended H2
grille. General Motors argues that the first such use was in
No. 02-1816 23
1981, when AM General supplied a prototype Humvee to
the U.S. government, but the prototype had a nine-slotted
grill. The first commercial use of the grille used consistently
from the Humvee through its two commercial successors
was 1985, when AM General delivered the first Humvee to
the government under its contract. To succeed on the merits
of its dilution claim, then, DaimlerChrysler must show the
existence of its claimed family of marks by or before 1985,
Marion Laboratories, Inc. v. Biochemical/Diagnostics, Inc.,
6 U.S.P.Q.2d 1215 (T.T.A.B. 1988); In re Globe-Union, Inc.,
189 U.S.P.Q. 158 (T.T.A.B. 1975), though not all members
of the alleged family need have existed at that point.
McDonald’s Corp. v. McKinley, 13 U.S.P.Q.2d 1895, 1899
(T.T.A.B. 1989).
DaimlerChrysler contends that since 1945, it has sold
an unbroken lineage of Jeep vehicles that featured a con-
sistent grille design with easily recognizable common
characteristics: seven to ten (and in recent years, exclu-
sively seven) vertical slots that appear to be stamped
through a planar surface. The stamped-through appearance
produces an image of holes perforated within a surrounding
frame. The grille designs used on Jeep vehicles have con-
veyed a consistent overall visual impression to consumers,
DaimlerChrysler says, and so have come to be recognized as
a singular symbol—what DaimlerChrysler calls the Jeep
grille design.
A point of clarification is needed before proceeding fur-
ther. Professor McCarthy tells us that, “While trade dress
is most often defined as a totality of elements, there is no
reason why the plaintiff cannot define a list of elements
consisting of less than the totality of features appearing on
a package or container.” 1 J. Thomas McCarthy, McCarthy
on Trademarks and Unfair Competition § 8:1 (4th ed. 2001).
Stated differently, “the plaintiff in a trade dress action
under section 43(a) of the Lanham Act is free to seek trade
dress protection for whatever products or packaging it sees
24 No. 02-1816
fit.” Rose Art Indus., Inc. v. Swanson, 235 F.3d 165, 170,
173 (3d Cir. 2000). DaimlerChrysler excludes the head-
lamp openings from its definition of the Jeep grille design
family of marks; the definition includes only the number
and appearance of slots. Few of the exhibits introduced into
evidence at the hearing, though, depict Jeep grilles or
Hummer grilles without (at least) the headlamp openings.
DaimlerChrysler’s trademark registrations for Wrangler
grilles depict the headlamp openings; the Jeep insignias for
Camp Jeep and the Jeep ties include the headlamp open-
ings (and the same is true for the AM General logo and
items in the “Hummer Stuff” catalog); General Motors’s
registered trademark addresses the entire front end. All
surveys included headlamp openings.
1. FAMILY OF MARKS: THE LAW
A “family of marks” is
a group of marks having a recognizable common charac-
teristic, wherein the marks are composed and used in
such a way that the public associates not only the
individual marks, but the common characteristic of the
family, with the trademark owner. Simply using a
series of similar marks does not of itself establish the
existence of a family. There must be a recognition
among the purchasing public that the common charac-
teristic is indicative of a common origin of the goods.
McDonald’s Corp. v. Druck & Gerner, DDS., P.C., 814 F.
Supp. 1127, 1131 (N.D.N.Y. 1993), quoting J & J Snack
Foods Corp. v. McDonald’s Corporation, 932 F.2d 1460,
1462 (Fed. Cir. 1991).
A family of marks exists only if and when “the purchasing
public recognizes that the common characteristic is indica-
tive of a common origin of the goods.” Han Beauty, Inc. v.
Alberto-Culver Co., 236 F.3d 1333, 1336 (Fed. Cir. 2001);
No. 02-1816 25
accord, Cambridge Filter Corp. v. Servodyne Corp., 189
U.S.P.Q. 99 (T.T.A.B. 1975).
DaimlerChrysler claims a family comprised of trade dress.
“Trade dress” is the “total image or overall appearance of a
product,” including size, shape, color, texture, and graphics.
Rose Art Indus., Inc. v. Swanson, 235 F.3d 165, 171 (3d
Cir. 2000); Badger Meter, Inc. v. Grinnell Corp., 13 F.3d
1145, 1151 (7th Cir. 1994); Kohler Co. v. Moen, Inc., 12 F.3d
632, 641 n.11 (7th Cir. 1993). When considering a claimed
family of trade dress, courts apply a “consistent overall
look” standard:
We agree with the District Court that “if a plaintiff
seeking trade dress protection cannot show that its
packages have a ‘consistent overall look,’ the trade
dress that the defendant is allegedly infringing ‘does
not exist,’ ” and the defendant must prevail. . . .
In endorsing the “consistent overall look” standard,
however, we do not require that the appearance of the
series or line of products or packaging be identical. . . .
Certainly the fact that Rose Art packages the same
product in several different types of packaging does not
prevent Rose Art from seeking trade dress protection
for one of these packaging designs. . . .
Even if Rose Art distributed the same products, for
example, generic crayons, markers, and colored pencils
in fifteen different package designs for each of fifteen
different customers, this fact alone would not prevent
Rose Art from obtaining trade dress protection for one
of the fifteen different packaging styles. One or more of
the package designs could be recognizable trade dress
as long as it had a “consistent overall look.” . . .
We conclude that when applying the “consistent over-
all look” standard, that is, when determining whether
the trade dress alleged by the plaintiff is recognizable,
protectable trade dress, a trial court should consider
26 No. 02-1816
only the products or packaging for which the plaintiff is
seeking trade dress protection.
Rose Art Indus. v. Swanson, 235 F.3d at 172-75. One
claiming family trade dress protection must articulate a
specific trade dress and demonstrate that it has consis-
tently used that trade dress, and even then, “courts con-
sider these broader product line claims with an ‘acute’
concern for protecting competition given that any remedy
could potentially cover a wide range of products.” Regal
Jewelry Co., Inc. v. Kingsbride Int’l, Inc., 999 F. Supp. 477,
486 (S.D.N.Y. 1998) (citations omitted) (“Ultimately, Regal’s
Lanham Act claim fails because it has not consistently
defined the elements of, or pursued the use of, a theme
trade dress.”).6
To be protected, the common characteristic must have
developed secondary meaning. Spraying Systems Co. v.
Delavan, Inc., 975 F.2d 387, 393 (7th Cir. 1992); see also
Traffix Devices, Inc. v. Marketing Displays, Inc., 121 S. Ct.
6
Unless the trade dress for which protection is sought is specifi-
cally defined with a stable visual appearance, the party seeking
protection might obtain a right to monopolize a variety of dress far
beyond what the plaintiff might ever use. Landscape Forms, Inc.
v. Columbia Cascade Co., 113 F.3d 373, 380 (2d Cir. 1997) (“focus
on the overall look of a product does not permit a plaintiff to
dispense with an articulation of the specific elements which com-
prise its distinct dress. Without such a precise expression of the
character and scope of the claimed trade dress, litigation will be
difficult, as courts will be unable to evaluate how unique and un-
expected the design elements are in the relevant market.”); Key-
stone Camera Prods. Corp. v. Ansco Photo-Optical Prods. Corp.,
667 F. Supp. 1221, 1228-30 (N.D. Ill. 1987).
The court is concerned about whether a definition that includes
“seven to ten” vertical slots is sufficiently specific, but since that
issue was not addressed at the preliminary injunction hearing, the
court pursues it no further.
No. 02-1816 27
1255, 1259 (2001) (“The design or packaging of a product
may acquire a distinctiveness which serves to identify the
product with its manufacturer or source; and a design or
package which acquires this secondary meaning, assuming
other requisites are met, is a trade dress which may not be
used in a manner likely to cause confusion as to the origin,
sponsorship, or approval of the goods.”). In other words, the
family characteristic must be such as to inform the con-
sumer of the product’s source, not simply of its nature, Ft.
Howard Paper Co. v. Nice-Pek Prods., Inc., 127 U.S.P.Q. 431
(T.T.A.B. 1960) (“-NAP” suffixes told public that products
were used in connection with napkins, not that they came
from the same source), so as to prompt the consumer who
sees an article of merchandise to say, “That’s the article I
want because I know its source,” not “Who makes that
article?” Ferrari S.P.A. v. Roberts, 944 F.2d 1235, 1239 (6th
Cir. 1991), citing West Point Mfg. Co. v. Detroit Stamping
Co., 222 F.2d 581, 595 (6th Cir. 1955).
Whether a family of marks exists is an issue of fact based
on the common formative component’s distinctiveness, the
family’s use, advertising, promotion, and inclusion in par-
ty’s other marks. McDonald’s Corp. v. McBagel’s, Inc., 649
F. Supp. 1268, 1271 (S.D.N.Y. 1986). Whether the party
claiming a family of marks has used joint advertising and
promotion in a manner designed to create an association of
common origin may be pertinent. Champion Int’l Corp. v.
Plex-owood, Inc., 191 U.S.P.Q. 160 (T.T.A.B. 1976).
Likelihood of confusion may be a significant component
in determining whether a family of marks exists. Nor-
wich Pharmacal Co. v. Salsbury Labs., 168 U.S.P.Q. 250
(T.T.A.B. 1970) (“In view of opposer’s sole theory for relief,
this narrows the issue to whether or not opposer possesses
a ‘family’ of marks in the veterinary pharmaceutical field
characterized and recognized in the trade and by purchas-
ers of opposer’s products by the inclusion in each mark of
the syllable ‘FUR’; and, if so, whether or not applicant’s
28 No. 02-1816
‘SALFURIDE’ mark will be mistakenly considered to be
another member of the ‘family’ . . . . The key to the ques-
tion before us is whether or not the average purchaser of
veterinary medicinal preparations does, in fact, or would
believe that all nitrofuran containing pharmaceutical pre-
parations sold under trademarks with the syllable ‘FUR’
originate exclusive with opposer.”); In re Mobay Chem. Co.,
166 U.S.P.Q. 218 (T.T.A.B. 1970); Servo Corp. of America v.
Servo-Tek Prods. Co., 289 F.2d 955, 956 (C.C.P.A. 1961)
(“ ‘there is no such resemblance between applicant’s mark
‘Servospeed’ and any of opposer’s marks as would be likely
to cause confusion or mistake or deception of purchasers.’ ”).
A concern of “family” jurisprudence is whether a competitor
may position its product or service in such a position as to
confuse the public as to its origin. For example, in Duffy-
Mott Co. v. Borden, Inc., 201 U.S.P.Q 846 (T.T.A.B. 1978),
the court explained:
we have here a situation where opposer has built a suc-
cessful business of selling a closely related group of
products under a series of similar marks having a
common characteristic, whose rights in its group of
marks have, on the record, been respected by the fruit
beverage and vegetable beverage industry, and next to
which applicant seeks to juxtapose itself (while having
knowledge of opposer’s marks and goods) with a closely
related product being offered under a mark that shows
not the slightest ingenuity in being distinguished from
opposer’s marks.
A family of products in a particular field does not neces-
sarily connote a family of marks. Norwich Pharmacal Co. v.
Salsbury Labs., 168 U.S.P.Q. 250 (T.T.A.B. 1970). Merely
adopting and using—and even registering—a group of
marks with a common feature does not create a family of
marks, even if the user intended to create a family. Ameri-
can Standard, Inc. v. Scott & Fetzer Co., 200 U.S.P.Q. 457,
461 (T.T.A.B. 1978); Consolidated Foods Corp. v. Sherwood
No. 02-1816 29
Med. Indus., Inc., 177 U.S.P.Q. 279 (T.T.A.B. 1973); Polar-
oid Corp. v. Richard Mfg. Co., 341 F.2d 150 (C.C.P.A. 1965).
Use of the common formative component in only a few
products weighs against a finding of a family. Creamette Co.
v. Merlino, 299 F.2d 55, 58-59 (9th Cir. 1962); compare
Motorola, Inc. v. Griffiths Electronics, Inc., 317 F.2d 397,
400-01 (C.C.P.A. 1963) (“if opposer has a family of six
marks all starting with the non-descriptive word ‘Golden,’
it still has that family notwithstanding there may be some
others using the same word to some undisclosed extent.”).
2. FAMILY OF MARKS AND DILUTION: GRILLES ON JEEPS
When World War II ended, Willys-Overland registered
“Jeep” as a trademark, and designer Barney Roos developed
the Jeep CJ-2A for the civilian market. The first Jeep CJ-
2A rolled out in August 1945 and sold for $1,090.00. The
front of the CJ-2A bore a grille consisting of seven long
narrow slots; two large, round headlamps were located just
outside the top half of the grille, with two signal lights
located immediately below the headlamps. The overall
shape was akin to a laterally elongated oval atop a rectan-
gle of the same height. The design is set forth in trademark
registration 1,170,088, issued to DaimlerChrysler in 1981,
which reports a first use in 1941. For purposes of these
findings, the court refers to the configuration shown in that
registration as “the CJ-2A grille.”7
7
During one examination in the preliminary injunction hearing,
the questioner steadfastly referred to “the Hummer grille,” which
the witness, with equal determination, repeatedly called “the Jeep
grille.” To avoid a premature taking of sides in that dispute, the
court gave brief consideration to referring to the CJ-2A configura-
tion as “the Ford grille,” since according to DaimlerChrysler
Exhibit 200, Ford Motor Company contributed the vertical slotted
grille to the military Jeep design.
30 No. 02-1816
DaimlerChrysler produced the Jeep CJ-2A until 1949.
The CJ-3A was added to the Jeep line in 1948, and was
produced until 1953. The longer-lived Jeep CJ-3B joined the
line in 1952 and was produced until 1968. The Jeep CJ-5
appeared in 1954 and was produced until 1983. The Jeep
CJ-6 was part of the Jeep line from 1955 to 1981. The Jeep
CJ-5A (and, according to DaimlerChrysler Exhibit 190, the
Jeep CJ-6A) was produced from 1964 to 1967. The Jeepster
Commando was produced from 1966 to 1971, with the Hurst
model produced in 1970. A truck (in the traditional cab-and-
trailer sense, rather than the SUV sense) called the Jeep
FC-150 and the Jeep FC-170 was produced from 1957 to
1964. A panel truck, the Jeep FleetVan FJ-3A, was pro-
duced from 1961 to 1964. The Jeep CJ-7 was produced from
1976 to 1986, with the Jeep CJ-8 (a pickup truck) produced
from 1981 to 1986. The Jeep Wrangler replaced the CJ line
in 1985 and continues to be produced to 2002, with a sig-
nificant model change having been made in 1997.
Each of the Jeep models mentioned in the preceding para-
graph—the CJ-3A, the CJ-3B, the CJ-5, the CJ-5A, the
CJ-6, the CJ-6A, the CJ-7, the CJ-8, the Jeepster Com-
mando, the Hurst Jeepster Commando, the FC-150, the FC-
170, and the Wrangler models—bore the CJ-2A grille or
something very close to it.
DaimlerChrysler also made Jeeps with slotted grilles that
differed from the CJ-2A grille. For example:
! From 1984 to 1987, the Jeep Cherokee sported a grille
with ten slots; the ten slots were the same height
as the stacked headlamp openings, giving the over-
all design (grille and lights) a rectangular appear-
ance.
! From 1988 to 1996, the Cherokee grille had eight
slots; the overall design still consisted of a rectangu-
lar look with wider slots than before.
No. 02-1816 31
! From 1985 to 1987, the Jeep Comanche (a pickup
truck) bore ten slots in a configuration that appears
to have been identical to the 1984-1987 Cherokee.
! From 1988 to 1992, the Comanche had eight slots in
a configuration that appears to have been identical to
the 1988-1996 Cherokee.
DaimlerChrysler also was making other Jeeps with grilles
that don’t fit within its definition of the family of Jeep grille
designs. Some had no slots:
! the 1972-73 Jeepster Commando grille consisted of
vertical and horizontal bars describing a grid;
! the 1972-73 Wagoneer grille had two dominant hori-
zontal bars and fourteen subordinate vertical bars;
! the 1974-1978 Wagoneer grille had two dominant hor-
izontal bars, one subordinate horizontal bar, twelve
vertical bars, and the grille enclosed the headlamp
openings;
! the 1979-80 Cherokee grille appears to have consisted
of a single horizontal bar running from one headlamp
to the other, and that bar appears to have been re-
moved on the 1979-80 Cherokee;
! from 1979 to 1985, the Wagoneer grille consisted of a
narrow rectangular shape enclosing a grid pattern of
bars and the headlamp openings.
Other Jeeps had vertical slots in high volume—a 1972-73
Jeep truck had twenty-two slots, as did the 1974-78 Chero-
kee and the remodeled 1974-78 Jeep truck, while another
1984-85 Wagoneer model sported twenty-one slots.
A 1971 Jeep advertisement (General Motors Exhibit 308)
shows four Jeep models side-by-side. The two in the middle
(the Commando and the Wagoneer) do not have slotted
grilles. The two outside models have vertically slotted
32 No. 02-1816
grilles—the “Jeep”8 that bears the CJ-2A grille, and the
“Jeep Truck” with twenty-two slots.
A 1985 advertisement for Jeep and Renault vehicles
(General Motors Exhibit 309A) carries eight photos of
different models, not all of which were identified at trial.
Four of the eight photos depict grilles; three of those are
Jeep models. One of those photos shows a grille with pre-
dominant horizontal bars; another of those photos shows a
grille with twenty-one vertical slots; the third of the photos
shows the CJ-2A grille.
By 1985, when General Motors actually sold the first
Humvees with seven vertical grille slots to the military,
DaimlerChrysler had no family of grilles with seven to ten
slots that appeared to have been stamped through a planar
surface. The CJ-2A grille, which had been in use for forty
years, was the Jeep mark—and it was registered as such.
By 1985, only two other grilles fitting within the “family”
specifications ever had been employed on Jeep models: a
ten-slotted grille used on both the 1984-1985 Jeep Cherokee
and the 1985 Jeep Comanche truck. There is no evidence
that the ten-slotted grille (with vertical slots producing a
very different configuration than the CJ-2A) had achieved
secondary meaning by 1985, either alone or in conjunction
with the CJ-2A grille. The only evidence bearing on the
matter of secondary meaning is that DaimlerChrysler aban-
doned the ten-slotted grille by 1988, never to use it again.
As noted earlier, DaimlerChrysler’s dilution claim re-
quires proof that the family of marks was famous before
General Motors adopted the allegedly diluting mark. Such
a showing, of course, requires DaimlerChrysler to prove
that its family of marks existed before General Motors
adopted the allegedly diluting mark—a non-existent family
8
Though identified in the advertisement simply as “Jeep,” the
model appears to be a Jeep CJ-6.
No. 02-1816 33
cannot be famous. DaimlerChrysler has not shown that it
has a better than negligible likelihood of making such a
showing at trial, so it is not entitled to a preliminary in-
junction on the dilution claim.
3. FAMILY OF MARKS AND INFRINGEMENT
DaimlerChrysler’s infringement claim might require con-
sideration of a different point in time. DaimlerChrysler pre-
sented evidence concerning the strength of the family of
marks that exists in 2002, when all three Jeep models bear
grilles with seven vertical slots that appear to have been
stamped through a planar surface.9 Courts are not in full
agreement as to whether the strength of the allegedly in-
fringed mark should be examined as of when the allegedly
infringing mark entered the marketplace or as of the date
the injunction is sought, but the weight of authority sen-
sibly favors the proposition that “the proponent of a family
of marks must prove that, prior to the junior user’s entry,
all or many of the marks in the alleged family were used
and promoted in such a way as to create public perception
of the family mark as an indicator of source.” Simon &
Shuster Inc. v. Dove Audio, Inc., 970 F. Supp. 279, 297
(S.D.N.Y. 1997), citing Marion Labs. Inc. v. Biomedical/
Diagnostics, Inc., 6 U.S.P.Q.2d 1215 (T.T.A.B. 1988) (de-
clining Simon & Shuster’s invitation to look at the strength
of its family of marks in the present); see also Pfizer v. Astra
Pharm. Prods. Inc., 858 F. Supp. 1305, 1329 (S.D.N.Y. 1994)
(holding that “the existence of the family of marks should
be judged at the time that the junior user entered the
marketplace”); see also Talk To Me Prods., Inc. v. Larami
Corp., 804 F. Supp. 555, 563 (S.D.N.Y. 1992) (holding that
secondary meaning doesn’t prohibit a junior use of the mark
9
Since 1998, but not before, all Jeep models have had grilles that
fit within’s DaimlerChrysler’s definition of its “family.”
34 No. 02-1816
if the junior use came into the marketplace before the
senior mark acquired its secondary meaning); but see
McDonald’s Corp. v. Druck and Gerner, 814 F. Supp. 1127,
1133 (N.D.N.Y. 1993) (measuring the strength of the mark
from the present standpoint).
The court agrees with the reasoning of the majority:
General Motors can’t be said to have infringed a family
of marks that did not exist when its grille entered the
market, or at least had not acquired secondary meaning
when the General Motors grille entered the market. If
DaimlerChrysler marketed only one member of the “family”
when General Motors entered the market, there was no
family even if DaimlerChrysler intended to add other
products to the family. Pfizer, Inc. v. Astra Pharm. Prods.,
858 F. Supp. 1305, 1329 (S.D.N.Y. 1994). The court consid-
ers the strength of any family of marks from the time the
offending grille entered the marketplace. As just set forth,
the Hummer grille entered the marketplace in 1985, and
while the CJ-2A grille had secondary meaning in 1985, no
family of marks had been established from which consum-
ers identified source.
4. THE LICENSING ISSUE
DaimlerChrysler presents a second ground for not looking
to 1985. DaimlerChrysler contends that AM General had no
right to convey (and so General Motors did not obtain) any
right to use the Humvee’s grille design because in 1983, AM
General received from Jeep a limited license to use the Jeep
grille design only on its military Humvees, and the license,
DaimlerChrysler contends, precluded the use of the grille
design on mainstream SUVs that compete directly with the
Jeep brand. DaimlerChrysler maintains that when AM
General was designing its Humvee prototype in the early
1980s, Jeep designers, at AM General’s specific request,
incorporated the Jeep grille design into the Humvee to
No. 02-1816 35
“reflect[ ] a Jeep-type appearance.” When AM General got
the Humvee contract, as DaimlerChrysler sees it, American
Motors Corporation granted AM General a license to use
the Jeep grille design on the Humvee, but for no other
purpose.
The license issue relates to the agreements under which
American Motors sold AM General to LTV. Section 2.07 of
the stock purchase agreement stated: “Set forth on Schedule
2.07(c) is a list of each patent, trademark and patent or
trademark application owned by [AM General].” The 1982
design patent application for the Humvee design was
among the itemized rights transferred to LTV. That ap-
plication never produced a patent, but the application
showed a vertically slotted grille. The stock purchase
agreement also contained a provision on proprietary rights
(§ 5.09) that said American Motors would license unspeci-
fied rights (specifically excluding the American Motors and
Jeep names and the transferred rights listed in Schedule
2.07(c)) to LTV before the stock purchase transaction closed
in September 1983. American Motors and LTV entered into
the contemplated license agreement in September 1983.
The stock purchase agreement reserved to American
Motors “the ‘American Motors’ or ‘Jeep’ names and marks
or the American Motors logo or any derivatives thereof.” A
side agreement, dated September 14, 1983, excluded speci-
fied intellectual property from transfer, including the CJ-10
vehicle design. The side agreement made no reference to the
Humvee.
From the time of its sale to LTV, AM General has pro-
duced and—since 1985—sold the Humvee with a front grille
design that consists of seven vertical slots. AM General has
used the same grille on the Hummer since 1992. In 1996,
AM General received trademark registration (the applica-
tion had been submitted in 1993) for the Humvee/H1 front
end, including the grille, and AM General has licensed the
36 No. 02-1816
Humvee/H1 grille design to a variety of businesses for their
own commercial use.
DaimlerChrysler says these agreements licensed AM
General to use the grille configuration, but to do so only on
the Humvee, which was only for military use. AM General
says the agreements reserved to American Motors no own-
ership interest in the Humvee’s grille configuration. New
York law controls the 1993 agreements pursuant to § 7.10
of the stock purchase agreement. When faced with conflict-
ing interpretations of a clause, New York law directs the
court to interpret the clause so as to give reasonable and
effective meaning to all terms and produce no meaningless
clause. Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992). The
court “must consider the entire contract and choose the
interpretation . . . ‘which best accords with the sense of the
remainder of the contract.’ ” Id., quoting Rentways Inc. v.
O’Neill Milk & Cream Co., 126 N.E.2d 271, 275 (N.Y. 1955).
Section 5.09 of the stock purchase agreement and the
ensuing license agreement addressed, without mention of
the Humvee, proprietary rights American Motors licensed
to AM General. The Humvee was addressed in § 2.07 of the
stock purchase agreement, which stated that all intellectual
property owned by AM General was listed on Schedule
2.07(c). That list included the 1982 trademark registration
for the Humvee name in International Class 12 (Trucks),
and the 1982 design patent application for the Humvee
military vehicle. The Humvee was not mentioned anywhere
else in the 1983 agreements.
To agree with DaimlerChrysler, the court would have to
find that American Motors conveyed to AM General all
rights in the then-pending design patent application for the
Humvee—an application that disclosed a grille consisting
of seven to ten vertical slots that appeared to have been
stamped on a planar surface—while tacitly and simulta-
neously retaining and licensing the grille design. No law,
No. 02-1816 37
including New York law, requires a court to so contort
contractual language. The agreements’ plain and unambig-
uous language transferred to AM General all rights relat-
ing to the Humvee design. AM General could not call the
Humvee a “Jeep” or equip it with the trademarked CJ-2
grille design (as registered, with the headlamps and run-
ning lights positioned)—those rights were reserved to
American Motors and were not even licensed—but no other
pertinent restrictions were placed on AM General’s entitle-
ment to the Humvee and its design.
DaimlerChrysler notes that AM General never received
the design patent that it had applied for, but the applica-
tion’s outcome (even if properly a matter to consider in the
face of unambiguous language) tells nothing of the parties’
intent, and the fact of the application strongly supports
General Motors. In September 1983, so far as the prelimi-
nary injunction record shows, there was no reason to be-
lieve that the design patent application would be denied;
the sophisticated parties to these agreements would not
have structured the transaction in such a way that AM
General might receive patent protection over a design that
included American Motors’s intellectual property—espe-
cially if the design was seen as encompassing the CJ-2A
grille design that had adorned Jeeps for nearly four de-
cades.
DaimlerChrysler presented the testimony of John Tier-
ney, who helped negotiate the 1983 agreements while em-
ployed by American Motors. Mr. Tierney testified to his
belief that the Humvee had a Jeep grille design, and that
American Motors licensed AM General to use the Jeep grille
design on the Humvee. The court is unmoved for two strong
reasons. First, since the agreements’ language is unambigu-
ous, it is improper to resort to parol evidence concerning the
parties’ intent. Blue Jeans U.S.A., Inc. v. Bas Ciaro, 729
N.Y.S.2d 703, 705 (N.Y. App. Div. 2001). Second, the court’s
task is to ascertain the parties’ intent, not the intent of the
38 No. 02-1816
parties’ negotiators. Whatever Mr. Tierney may have be-
lieved, and whatever the propriety of considering his tes-
timony about his understanding, the agreements’ plain and
unambiguous language makes it clear that AM General was
to receive all things Humvee, at least to the extent shown
in the design patent application.10
Were the court to turn to parol evidence, the most per-
suasive evidence of American Motors’s intent would not be
Mr. Tierney’s testimony, but rather the complete inatten-
tion that American Motors and its successors paid to the
purported license. Through the 1990s, the front end of the
Humvee gained considerable renown—“fame” in the every-
day sense—in news reports, entertainment, toys, and ad-
vertising. The purported licensors did nothing whatsoever
to attend to such uses or collect royalties from AM General
or its successors, or from those who used the image of the
Humvee, and (as is discussed later) did not object when AM
General sought trademark registration for the front end of
the H1, including the grille. This uninterrupted inattention
to the “license” speaks deafeningly to American Motors’s
intent in entering into the 1983 agreements with LTV.
AM General had no license with respect to the grille on
the front end of the Humvee.
10
Both sides presented several party-opponent statements found
in internal memoranda. Such statements were properly offered
and admitted as admissions under Fed. R. Evid. 801(d)(2)(D), but
the court does not believe that any of them disclose any corporate
position taken by DaimlerChrysler or General Motors. The court
considers those statements simply as proof that someone within
the company had a particular thought and conveyed it to others
in the company.
No. 02-1816 39
G. THE CJ-2A GRILLE: DILUTION AND LACHES
That DaimlerChrysler had no family of marks—no fam-
ily of Jeep grille designs—in 1985 does not mean that
DaimlerChrysler had nothing entitled to trademark protec-
tion. See Champion Int’l Corp. v. Plex-owood, Inc., 191
U.S.P.Q. 160 (T.T.A.B. 1976). DaimlerChrysler had the CJ-
2A grille design, which can be assumed both to have been
famous and to have had secondary meaning in 1985 by
virtue of its long history of consistent use on Jeeps in the
marketplace. Although DaimlerChrysler’s counterclaims
make reference to its registered trademarks for the CJ-2A
design and similar designs it has used on the Wrangler,
DaimlerChrysler has expressly excluded the headlamp
openings from the mark it seeks to protect through this re-
quested injunction, and each of the registered Jeep trade-
marks include the headlamp openings.
DaimlerChrysler has not shown a better than negligible
likelihood of success on a claim that the intended H2 grille
presents a likelihood of dilution of the mark consisting of
the CJ-2A grille design because DaimlerChrysler has
demonstrated no chance of overcoming General Motors’s
affirmative defense of laches. “The application of laches in
a particular case is dependent upon a showing of an un-
reasonable lack of diligence by the party against whom the
defense is asserted and prejudice arising from this lack of
diligence.” Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813,
822 (7th Cir. 1999). General Motors points to Daimler-
Chrysler’s failure to challenge the use of the vertically
slotted grille on the Humvee in 1985 or thereafter, and the
failure to challenge the same vertically slotted grille on the
H1 in 1993 or thereafter. If DaimlerChrysler had not re-
mained silent as the grille was used on the Humvee and the
H1, General Motors says, it would not have invested mil-
lions of dollars into the acquisition of the Hummer brand
and development of the H2.
40 No. 02-1816
DaimlerChrysler responds with several arguments. First,
DaimlerChrysler says that any lack of diligence belongs on
General Motors’s doorstep: had General Motors diligently
investigated AM General before acquiring the Hummer
brand and funding a new plant, General Motors would have
learned that AM General owned no rights to the grille
design used in Humvee and the H1, but rather was only a
licensee entitled to use the design only on military vehicles.
That argument requires no further discussion, since the
court already has found that AM General acquired from
American Motors full rights to the Humvee design, includ-
ing the vertically slotted grill, and that no license existed.
DaimlerChrysler also notes that during the trademark
registration process, AM General sought DaimlerChrysler’s
consent after the PTO had noted, as a ground for denial,
DaimlerChrysler’s first registration of the CJ-2A grille. AM
General sent DaimlerChrysler a proposed form of consent
that included language to the effect that the Humvee did
not compete in the same market as any Jeep product.11 That
language, DaimlerChrysler says, implicitly disclaimed any
intention of future competition with Jeep models, and so
justifies its failure to object to the Hummer’s commercial
use of the grille design.
The court does not agree that a letter to which no reply
ever was made can be thought to have such significance as
DaimlerChrysler attributes to this one. Nothing in the
classification of vehicles for which the registration was
sought would prevent the mark’s use in the SUV market; if
11
The consent form stated, “[T]he primary market for the ‘HUM-
MER’ vehicle is the military, with a civilian version having been
introduced in recent years, but with great commonality to the
military version of the vehicle. The ‘JEEP’ vehicle radiator grille
design appears in the sport/utility vehicle segment, and these
vehicles are typically priced one-half to one-third the price of the
‘HUMMER’ vehicle.”
No. 02-1816 41
DaimlerChrysler wanted an implicit non-compete pledge to
be part of the registration, the better course of action would
seem to have been to communicate its concern to the PTO,
perhaps by executing the consent form that contained what
DaimlerChrysler now claims to have read as a promise.12 In
any event, DaimlerChrysler’s argument addresses why it
was silent after the November 1994 letter, and provides
no explanation for the lack of objection from 1985 until
then—including the years after 1992, when AM General
was selling the H1 equipped with what DaimlerChrysler
now contends is the Jeep grille.
H. PROGRESSIVE ENCROACHMENT AND DILUTION
DaimlerChrysler also points to the doctrine of progressive
encroachment, which allows a trademark owner to “tolerate
de minimis or low-level infringements” and still have the
right to “act promptly when a junior user either gradually
edges into causing serious harm or suddenly expands or
changes its mark.” 5 J. Thomas McCarthy, McCarthy on
Trademarks and Unfair Competition § 31:21 (4th ed. 2001);
accord Independent Nail & Packing Co. v. Stronghold Screw
Prods., Inc., 205 F.2d 921, 927 (7th Cir. 1953). There was no
reason to complain of the Humvee grill, DaimlerChrysler
says, because the Humvee was a military vehicle, and the
H1 never sold more than 800 vehicles per year. This doc-
trine, DaimlerChrysler says, forgives any earlier failure to
remonstrate about the Humvee/H1 grille—the threat to its
mark did not “loom[ ] large.” Sara Lee Corp. v. Kayser-Roth
Corp., 81 F.3d 455, 462 (4th Cir. 1996).
12
For the same reasons, the court cannot agree with Daimler-
Chrysler’s parallel argument in its early briefs that the use of the
intended H2 grille would exceed the scope of General Motors’s
trademark for the grille.
42 No. 02-1816
The court continues to believe that in light of the infancy
of the federal anti-dilution act, it would be far too sweeping
to say, as General Motors asked the court to hold on
summary judgment, that the progressive encroachment
doctrine never can apply in a dilution case. Nonetheless,
having heard the parties’ arguments and received evidence
at the preliminary injunction hearing, the court is per-
suaded that the doctrine affords DaimlerChrysler’s dilution
claim no shelter in this case.
The thrust of DaimlerChrysler’s progressive encroach-
ment argument is that until General Motors announced
plans to bring the Hummer into (or at least nearly into) the
market in which DaimlerChrysler sells its Jeeps, there was
no dilution. Before that moment, there was no lessening of
the Jeep grilles’ capacity to identify Jeeps for consumers.
Until the federal anti-dilution act was adopted in 1996,
state laws addressed dilution by non-competitors’ use of
marks. 4 J. Thomas McCarthy, McCarthy on Trademarks
and Unfair Competition § 24:72 (4th ed. 2001) (“The legal
theory of anti-dilution was not conceived to substitute for
the likelihood of confusion rule when the parties are compet-
itors.”). The federal statute, however, specifically provides
that dilution can occur “regardless of the presence or ab-
sence of . . . competition between the owner of the famous
mark and other parties.” 15 U.S.C. § 1127. Daimler-
Chrysler’s argument would require the court to ignore that
language and turn the original dilution doctrine on its
head—dilution would not occur until the parties were in
competition.
As is consistent with the statutory language, the test for
likelihood of dilution ignores competition and looks solely to
the marks’ similarity and to the renown of the senior mark.
Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d at 468-
69. Nothing in this record would allow a finding that the
H2 grille is any more similar to famous Jeep mark(s) than
were the Humvee grille in 1985 or the H1 grille in 1992, so
No. 02-1816 43
the advent of the H2 brings no change in the marks’
similarity—the first factor in determining dilution. Noth-
ing in this record would allow a finding that any Jeep
grille design was any more renowned when this suit was
filed in 2001 than in 1985 or 1992, so the impending H2
brings no change to the senior mark’s renown—the other
factor in determining dilution. In this case, then, the pro-
gressive encroachment doctrine simply does not apply to
DaimlerChrysler’s dilution claim.
I. INFRINGEMENT
The progressive encroachment doctrine does, however,
apply to DaimlerChrysler’s infringement claim (there was
no risk of confusion between the Wrangler and the Humvee
or the H1), so the court thinks it most unlikely that General
Motors’s laches defense will succeed at trial against the
infringement claim. To prevail on its trademark infringe-
ment claim, DaimlerChrysler will have to prove at trial that
its trade dress—the CJ-2A grille—has acquired secondary
meaning, and that the similarity of the intended H2 grille
to that of DaimlerChrysler’s causes a likelihood of consumer
confusion as to source or affiliation of products. Dorr-Oliver,
Inc. v. Fluid-Quip, Inc., 94 F.3d 376, 380 (7th Cir. 1996).
Given the length of its consistent use on Jeep vehicles
(now more than half a century), it is easy to conclude that
DaimlerChrysler has a very high likelihood of proving that
the CJ-2A grille design has acquired secondary meaning.13
13
Dr. Ericksen’s secondary meaning survey contains support for
that proposition, but at this point, the court does not find that
study persuasive standing alone. Dr. Ericksen’s survey involved
showing respondents the headlamps with the grilles. As discussed
elsewhere in this opinion, DaimlerChrysler has defined the “Jeep
grille design” as excluding the headlamps. The preliminary in-
(continued...)
44 No. 02-1816
DaimlerChrysler has not, however, shown a better than
negligible likelihood of showing a likelihood of consumer
confusion.
DaimlerChrysler concedes General Motors’s point that
consumers who pay $50,000.00 for H2s are unlikely to leave
dealerships believing they purchased Jeeps. Daimler-
Chrysler contends that two different sorts of confusion are
likely: initial interest confusion, and source or sponsorship
confusion. Unlike most commercial products that disappear
from the public eye through consumption or private use,
motor vehicles populate roads and highways for years after
purchase. DaimlerChrysler argues that motor vehicles serve
as rolling billboards that encourage more consumers to
purchase the same model, and that consumers’ on-road
observations influence their short list of vehicles for pos-
sible purchase. DaimlerChrysler contends that the intended
H2 grille likely will lead people who see the H2 on the road
or in advertisements to think that the H2 is made or
approved by, or somehow associated with, the Jeep brand.
That belief may continue through the point of sale.
Likelihood of confusion is measured by: (a) the similarity
of the trade dresses; (b) the area and manner of concurrent
use, including the similarity of the products on which the
trade dresses are being used; (c) the degree of care likely to
be used by consumers; (d) the strength of DaimlerChrysler’s
trade dress; (e) evidence, if any, of actual confusion; and (f)
any intent of General Motors to pass off its product as that
13
(...continued)
junction record does not allow the court to determine a proper dis-
count to apply to the Ericksen survey as a result of inclusion of
the headlamps. It seems reasonable, though, that the greater a
glimpse of the vehicle allowed to the respondent, the likelier the
respondent will be to make a proper identification, particularly if
the photo depicts a model of a brand that has sold nationally for
more than fifty years.
No. 02-1816 45
of DaimlerChrysler. Thomas & Betts Corp. v. Panduit Corp.,
138 F.3d at 296.
Similarity of Trade Dresses. When the focus is on the
CJ-2A grille rather than DaimlerChrysler’s asserted family
of marks, similarity with the intended H2 grille appears to
be modest. The CJ-2A grille is a series of seven long,
narrow, closely bunched slots; the intended H2 grille is a
series of seven shorter, wider, and more widely spaced slots.
In both grilles, the slots appear to be stamped through a
planar surface. As indicated above, the court ignores the
headlamp openings in making this comparison.14
Limiting the focus to the grille and ignoring all that
surrounds the grille seems to blink the general rule that
courts evaluate similarity in light of what happens in the
marketplace, rather than just by making a side-by-side
comparison. Meridian Mut. Ins. Co. v. Meridian Ins. Group,
Inc., 128 F.3d 1111, 1115 (7th Cir. 1997), citing James
Burrough Ltd. v. Sign of Beefeater, Inc., 540 F.2d 266, 275
(7th Cir. 1976). Consumers in the marketplace don’t decide
to buy an SUV solely because of the grille shown on a
“Camp Jeep” poster or on a Jeep tie, or because of the grille
shown on a coffee cup found in the “Hummer Stuff” catalog.
Nonetheless, as explained earlier, DaimlerChrysler is en-
titled to define its trade dress, and the wearing of figurative
blinders seems to be the only way to compare the similarity
of the grilles.
14
Were the headlamp openings considered, the front ends of the
two vehicles would be less similar still. As mentioned before, the
headlamp openings on the Jeep CJ-2A grille are aligned with the
tops of the slots, but extend only about halfway down the height
of the slots. The headlamp openings of the intended H2 grille are
rectangular, with the top and bottom aligned with the tops and
bottoms of the vertical slots.
46 No. 02-1816
George Mantis’s confusion studies do not suggest confu-
sion between the Jeep CJ-2A grille and the intended H2
grille. In his second confusion study, Mr. Mantis showed
respondents photos of an H2 taken from directly in front,
directly in back, and off the right front corner. In the set of
photos shown to the control group, the seven-slotted grille
had been altered to become a single large rectangular slot
with silver letters spelling “HUMMER” across the slot. The
“Hummer” name was prominently displayed in each of the
three photos. In the earlier of the two dilution studies, Mr.
Mantis used photographs of an H2 that were placed on the
Internet before final design changes15; the earlier study
used no control questions and attempted to measure dilu-
tion as well as confusion.
Neither of Mr. Mantis’s confusion studies sheds light on
the likelihood of confusion between the intended H2 grille
and the Jeep CJ-2A grille. Mr. Mantis reported associa-
tion with “Jeep,” but at the time of the surveys, the Jeep
Wrangler was (and had been for many years) the only Jeep
model to use the CJ-2A grille. The Cherokee grille used
from 1996 to 2000 (and not used before that time) appears
to the court to be considerably more similar to the intended
H2 grille, but since the court has found virtually no likeli-
hood of DaimlerChrysler proving the existence of a family
of marks in 1985, and since the seven-slotted Cherokee
grille was not in use in 1985, association with the Cherokee
grille proves nothing about the likelihood of confusion
between the intended H2 grille and the Jeep CJ-2A grille.
For example, Mr. Mantis reported that in his earlier
survey, 44% of the 228 surveyed Jeep owners associated a
photo of the earlier version of the H2 with Jeep. A review of
15
The only design change mentioned at trial was the addition of
the letters “H-U-M-M-E-R” on the vertical pieces that define the
slots in the grille.
No. 02-1816 47
the verbatim responses to the earlier survey (Daimler-
Chrysler Exhibit 266, tabs G-I), though, leaves the strong
impression that association was made only infrequently to
the Jeep CJ-2A grille. Of the respondents who associated
the H2 grille with Jeep, only six specifically mentioned an
association with the Wrangler model, while thirty-four
specifically mentioned an association with the Cherokee,
the Grand Cherokee, or the Laredo (one respondent men-
tioned both Wrangler and Cherokee; one mentioned Tonka).
The association with Wrangler actually was more frequent
among respondents who didn’t mention the grille at all—of
those who reported association with Jeep for reasons other
than the grille, six specifically mentioned the Wrangler,
while five specifically mentioned a Cherokee variant (one
mentioned Studebaker). Other respondents in both groups
mentioned Jeep without mentioning a model.
Similarly, in his second confusion survey, Mr. Mantis
reported a net16 7.0% of consumers to have confused the H2
with Jeep.17 Again, reference to “Jeep” is too broad, since
the Jeep CJ-2A grille is the only mark that General Motors
16
Mr. Mantis employed a control group in his second survey, so
the “net” figure reports the difference between those who confused
the H2 with Jeep (the test group) and those who confused a third-
party’s vehicle with Jeep (the control group).
17
To that figure, DaimlerChrysler adds another net 1.9% of re-
spondents who confused the H2 for “other Jeep appearance-
related reasons,” and claims a net confusion figure of 8.9%. As
noted earlier, DaimlerChrysler defined the trade dress it seeks to
protect as the grille, and only the grille. No logical reason comes
to mind why those who associated with Jeep some part of the H2
other than the grille disclose anything about likelihood of confu-
sion based on the grille. Indeed, Mr. Mantis included in the 7.0%
anyone who mentioned the H2’s “front end” without mentioning
the grille. The “front end” of the H2 includes features such as
headlamp openings that are not alleged to infringe on, or dilute,
DaimlerChrysler’s mark.
48 No. 02-1816
can be accused of infringing. A review of the verbatim
responses shows that of the forty-two respondents who
referred to the Jeep appearance when shown an H2, not one
specifically mentioned the Wrangler; only six mentioned
any specific Jeep model.
To be sure, these comments do not mean that the Mantis
surveys disprove any likelihood of confusion. Mr. Mantis’s
surveys were not designed to measure confusion with the
grille then seen only on the Jeep Wrangler (and now on the
Liberty, too), and the court has too little expertise in
statistics to decide whether the figures set forth in the
preceding two paragraphs prove anything at all. For
purposes of today’s ruling, though, it is enough to say that
neither of these two studies—one in which five of 218
respondents (2.2%) associated the H2 front end with the
Jeep Wrangler, and another in which none of 215 respon-
dents did so—support the proposition that the intended H2
grille is sufficiently similar to the Jeep CJ-2A grille to make
consumer confusion at all likely.
Area and Manner of Concurrent Use. Besides the Wran-
gler, the new Jeep Liberty (which replaced the Cherokee in
2001) might be said to use the CJ-2A grille design. The
Wrangler, Liberty, and H2 all are sport utility vehicles
that will be sold at car dealerships. Beyond that, however,
there is little overlap between the DaimlerChrysler prod-
ucts and the General Motors product. The H2 almost in-
variably will cost more than $50,000.00, while the Wrangler
and Liberty usually sell for no more than $28,000.00 (with
the Wrangler available for as little as $16,000.00, and the
Liberty selling for around $17,200.00 at the low end). As
DaimlerChrysler measures such things, the Wrangler is
categorized as a small SUV; the Liberty is in the lower-
middle sized category of SUVs; the H2 is in the large cate-
gory.
No. 02-1816 49
The Wrangler and Liberty ordinarily are sold at Jeep (or
DaimlerChrysler) dealerships, while the H2 (and the H1)
will be sold at General Motors (or Hummer) dealerships. In
a few instances, no doubt, the same dealership may handle
Jeeps and Hummers, but there is little likelihood of con-
sumers confusing the products on the showroom floor. The
differences in headlamp configuration already have been
noted; while the front tires and fenders are set outside the
headlamps on the Wrangler and Liberty, the tires on the H2
are directly below the headlamps, and the H2 appears to
have no front fenders.
More important, though, are the differences in size: the
H2 is seven inches taller than the Wrangler and the Liberty
(and one to three inches taller than the H1); the track width
of the H2 is nine inches wider than the Liberty and nearly
a foot wider than the Wrangler (but two inches narrower
than the H1); the overall width of the H2 is just under a
foot more than the Liberty’s and more than fourteen inches
greater than the Wrangler’s (though five inches narrower
than the H118); while a vehicle’s length is not apparent from
a head-on view, a consumer who walks around the vehicles
on the showroom floor will find the H2 to be fifteen inches
longer than the Liberty, and a whopping three feet longer
than the Wrangler—and five inches longer than the H1. In
every dimension, the H2 is decidedly larger than any Jeep
that uses the CJ-2A grille.
As noted earlier, DaimlerChrysler doesn’t contend that
consumers will drive off dealership lots thinking the H2
they just bought for $50,000.00 or more is a Jeep Wrangler.
DaimlerChrysler’s concern is what happens before and after
the sale. Motor vehicles rolling down the highways are free
commercials: consumers notice nice-looking cars and SUVs,
18
General Motors found it necessary to reduce the width so the
H2 could use commercial car washes.
50 No. 02-1816
and recall them when considering purchase of a new vehi-
cle. DaimlerChrysler believes that a motoring consumer (or
one looking at true advertisements) who sees an H2 will
think the H2 is made by, or somehow associated with, Jeep.
DaimlerChrysler is correct that if General Motors’s sales
predictions are correct, the roads soon will be inhabited
by H2s, Libertys, and Wranglers. As already discussed,
though, this record contains no persuasive evidence to
warrant DaimlerChrysler’s fear that the intended H2 grille
will confuse the consumer into association with the CJ-2A
grille on the two Jeep models. To the extent any such
association might arise, it does not amount to the sort of
post-sale confusion that supports an infringement action.
None of the relevant motor vehicles is the sort of low-priced
item to which a consumer might devote little careful
thought, such as a broom, Thomas & Betts Corp. v. Panduit
Corp., 138 F.3d at 297, or a story book that might be
purchased on impulse to distract a fussy child. Western
Publ’g Co. v. Publications Int’l, Ltd., No. 94 C 6803, 1995
WL 1684082, at *14 (N.D. Ill. May 2, 1995). Any similarity
in the grilles does not present a risk of a “bait and switch”
effect. See Syndicate Sales, Inc. v. Hampshire Paper Corp.,
192 F.3d at 638 (“the Lanham Act forbids a competitor from
luring potential customers away from a producer by passing
goods off as those of the producer, even when confusion as
to the source of the goods is dispelled by the time the sale
is consummated. Such ‘bait and switch,’ also known as
‘initial interest’ confusion, will affect the buying decisions
of the consumers when it permits the competitor to ‘get its
foot in the door’ by confusing the consumers. When post-
sale inspection of the goods is an ineffective remedy, such
an approach makes sense.”); Dorr-Oliver, Inc. v. Fluid-Quip,
Inc., 94 F.3d 376, 382 (7th Cir. 1996); cf. Rust Environment
& Infrastructure, Inc. v. Teunissen,131 F.3d 1210, 1217 (7th
Cir. 1997).
No. 02-1816 51
The Degree of Care Likely to Be Used by Consumers. For
the reasons just set forth, this factor weighs against a
finding of likely confusion. Visual similarity may have
greater importance when the products are low-priced items
not likely to receive considerable study from the consumer,
Roulo v. Russ Berrie & Co., 886 F.2d 931, 937 (7th Cir.
1989) (greeting cards), but the consumer’s high sophistica-
tion does not foreclose confusion. Schwinn Bicycle Co. v.
Ross Bicycles, Inc., 870 F.2d 1176, 1187 (7th Cir. 1989).
Further, that an H2 buyer might understand that the
product is a Hummer does not eliminate possible confusion
as to whether DaimlerChrysler is the source of manufacture
or affiliated with the manufacturer. Rolls-Royce Motors,
Ltd. v. A & A Fiberglass, Inc., 428 F. Supp. 689, 694 (N.D.
Ga. 1977).
Still, consumers who buy or lease a vehicle that sells for
more than $16,000.00—or, in the case of the H2, more than
$50,000.00—are likely to use a very high degree of care,
especially since they are likely to make their purchases
from well-branded dealerships.
The Strength of DaimlerChrysler’s Trade Dress. The
traditional method of measuring a mark’s strength with a
yardstick that runs from generic at one end to arbitrary and
fanciful at the other is a clumsy method when measuring
the strength of trade dress or product design. Landscape
Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 380 (2d
Cir. 1997). The issue of strength is not a difficult one here:
DaimlerChrysler has used the CJ-2A grille in commerce
continuously for more than half a century, and has pro-
moted it heavily. The CJ-2A grille has considerable second-
ary meaning, and is a strong mark.
Concern with the strength of the mark, though, looks
more to the extent of protection to be afforded it than to the
likelihood of confusion:
52 No. 02-1816
The greater the distinctiveness of the mark, the greater
the likelihood that prospective purchasers will associate
the same or a similar designation found on other goods
. . . with the prior user. “Strong” marks that have a high
degree of distinctiveness are thus protected against the
use of similar marks on a wide range of goods or ser-
vices that are “weak” designations that have less dis-
tinctiveness or market recognition.
Restatement (Third) of the Law of Unfair Competition, § 21,
comment I (1995). This factor, then, weighs in favor of in-
junctive protection of DaimlerChrysler’s strong mark, if
there is other evidence of likely confusion.
Evidence of Actual Confusion. The record contains no
evidence of actual confusion. That lack of evidence favors
neither party since General Motors is not yet selling the H2.
No evidence of actual confusion reasonably could be ex-
pected.
Any Intent of General Motors to Pass off the H2 as That
of DaimlerChrysler. “ ‘Passing off’ means fraud; it means
trying to get sales from a competitor by making consumers
think that they are dealing with that competitor, when
actually they are buying from the passer off.” Blau Plumb-
ing, Inc. v. S.O.S. Fix-It, Inc., 781 F.2d 604, 610 (7th Cir.
1986). The record contains no direct evidence that General
Motors intends to do anything other than to introduce a
new model of large SUV, with the possibility of introducing
smaller versions in years to come. The intent to compete is
not the intent to pass off the product as the competitor’s.
DaimlerChrysler points to General Motors’s advertis-
ing as circumstantial evidence of an intent to pass off, or
at least to foster confusion among consumers. Daimler-
Chrysler points to General Motors’s use of advertising
No. 02-1816 53
slogans that make reference to a “legend” surrounding the
H2’s predecessors, a “legend” of which the H2 supposedly is
to become a part. DaimlerChrysler’s suspicions on this point
are understandable: General Motors has run advertise-
ments for the H2 that say, “The Legend Continues”—a
slogan that DaimlerChrysler used in new Jeep product
launches in 1991, 1995, 1996, 1997, 1999, and 2001. To a
lesser extent, Jeep and H2 advertising have shared a “go
anywhere, do anything” theme.
DaimlerChrysler claims no trademark infringement in
General Motors’s use of the “The Legend Continues” slogan,
but inference of an intent to pass off or to confuse would be
nearly irresistible if General Motors had initiated the use
of a slogan repeatedly used for new Jeeps over the past
decade. General Motors, however, did not initiate the use of
the slogan for Hummers. AM General dubbed its Humvee
a “legend” very soon after Operation Desert Shield, and AM
General’s early advertising for the H1 spoke of “The New
American Legend” (1991) and “The Legend Grows” (1992).
General Motors continued the use of the existing “legend”
theme for the Hummer line. Under these circumstances, no
inference can be drawn that General Motors chose the
“legend” advertising slogans with any intent to trade on
consumers’ association with the Jeep “legend,” as opposed
to the intent to trade on consumers’ association with the
Humvee/H1 “legend.”
DaimlerChrysler points to another aspect of General
Motors’s advertising. In many advertisements, General
Motors features the H2’s front end—the grille, as Daimler-
Chrysler sees it—from a head-on view (or, in a recent ad-
vertisement, from ground level—the “road kill perspective,”
as DaimlerChrysler’s counsel memorably described it).
DaimlerChrysler says it has long used such head-on views
to advertise Jeeps, and that advertising from that perspec-
tive is rare in the industry. This, DaimlerChrysler says, is
54 No. 02-1816
indication of General Motors’s intent to confuse consumers
as to the source of Hummers.
Again, the argument would be stronger had this perspec-
tive originated with General Motors, but it did not. AM
General used the head-on view in much of its advertising.
Perhaps more importantly, so did others. In the 1990s,
firms outside the automotive industry19 used the Humvee
(with AM General’s permission) in their own advertise-
ments that sought to associate attributes of their own
products with the Humvee. Several of those advertisements
employed the perspective to which DaimlerChrysler now
points the court. Had those advertisers wished to associate
their products with Jeeps, they could have used Jeeps in
their ads (and, for all the court knows, they might have
done so). Those third-party advertisers debunk any infer-
ence that General Motors uses head-on views of the H2 for
the purpose of associating its product with Jeep.
Nothing in the record indicates any intent on General
Motors’s part to palm off the H2 as a Jeep, or to exploit
consumers’ associations with Jeep. This factor weighs
against any likelihood of confusion.
Cumulative Effect of All Factors. In sum, the only factor
that might support a finding of likely confusion is the
strength of the CJ-2A grille as a source of identification
with DaimlerChrysler. The facts just addressed with
respect to General Motors’s intent, however, sharply pare
any weight of that factor in deciding likelihood of confusion.
Third parties’ use of the Humvee’s front end indicates that
the Humvee’s front end (and, inferentially, the H1’s front
end) has developed its own secondary meaning. If so, and
19
Such firms included Panasonic, CVIC World Markets, Master-
Card, Rainier Beer, IBM, and Arrowhead Water.
No. 02-1816 55
recognizing the dissimilarity of the H2 and the Wrangler
or Liberty when viewing anything other than the grille, the
H2 grille is much more likely to trigger consumer associa-
tion with the Humvee (as it was designed to do) than to
threaten the strength of the CJ-2A grille configuration as a
DaimlerChrysler mark.
DaimlerChrysler has less than a negligible chance of
succeeding on the merits of its trademark infringement
claim. Because, for the reasons discussed much earlier in
this memorandum, DaimlerChrysler also has less than a
negligible chance of succeeding on the merits of its trade-
mark dilution claim, its motion for preliminary injunction
must be denied. See, e.g., Kiel v. City of Kenosha, 236 F.3d
814, 816 (7th Cir. 2000) (“Kiel has so little chance of success
on the merits of his case that the granting of a preliminary
junction [sic] in this instance would be inappropriate.”);
Teamsters Local Unions Nos. 75 and 200 v. Barry Truck-
ing, Inc., 176 F.3d 1004, 1011 (7th Cir. 1999) (“Without
demonstrating a reasonable likelihood of success on the
merits of either claim, Barry failed to satisfy the all im-
portant first element of Roland, and we therefore need
not consider the other four elements.”).
J. BALANCE OF HARMS
That DaimlerChrysler has shown no likelihood of success
on the merits is reason enough to deny the motion for
preliminary injunction without further discussion. Platinum
Home Mortgage Corp. v. Platinum Financial Group, Inc.,
149 F.3d 722, 730 (7th Cir. 1998) (“a district court may de-
cline to address the remaining elements of a preliminary
injunction if a plaintiff fails to demonstrate a reasonable
likelihood of prevailing on the merits of the underlying
claim.”), citing Ping v. Nat’l Educ. Assoc., 870 F.2d 1369,
1371 (7th Cir. 1989). Nonetheless, since the evaluation of a
motion for preliminary injunction is intended to reduce the
56 No. 02-1816
cost of error in determinations made before complete dis-
covery and trial, Platinum Home Mortgage Corp. v. Plati-
num Financial Group, Inc., 149 F.3d at 726, quoting
Faheem-El v. Klincar, 841 F.2d 712, 717 (7th Cir. 1988), the
court alternatively assumes, solely in consideration of re-
ducing the risk of error, that DaimlerChrysler might have
a better than negligible chance of success on the merits. For
the reasons already discussed, the chance of success would
be low, but the court recognizes that bright lines do not
always mark the difference between no chance and slight
chance. Accordingly, while the court holds that Daimler-
Chrysler does not have a better than negligible likelihood
of success on the merits, the court addresses the remaining
factors in the preliminary injunction analysis.
A better than negligible chance of success is not all that
DaimlerChrysler must show to reach the balancing phase
of the analysis, but for reasons to be discussed in the
balancing phase, DaimlerChrysler has shown that it has no
adequate remedy at law—in other words, that an eventual
award of money damages would not satisfy its injury,
Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Prods.
Co., Inc., 255 F.3d 460, 462 (7th Cir. 2001)—for dilution
and/or infringement of its mark (which might consist of a
family of marks, given the court’s assumption of its own
error), and that if the preliminary injunction is not issued,
it will suffer irreparable harm before the lawsuit’s final
resolution.
Once DaimlerChrysler is assumed to have shown a rea-
sonable probability (a better than negligible chance) of
success on the merits, irreparable harm without the pre-
liminary injunction, and absence of an adequate remedy at
law, the court then must consider any irreparable harm the
preliminary injunction might impose upon General Motors
if the preliminary injunction is issued, and whether the
preliminary injunction would harm or foster the public
interest. Anderson v. U.S.F. Logistics (IMC), Inc., 274 F.3d
No. 02-1816 57
470, 474 (7th Cir. 2001); Re/Max North Central, Inc. v.
Cook, 272 F.3d 424, 429-430 (7th Cir. 2001).
The court appraises the risk of irreparable harm to the
parties not simply by reference to what they will lose by an
unfavorable ruling today, but rather by reference to the
harm of error: what irreparable harm would denial of a
preliminary injunction cause to DaimlerChrysler and the
public if the trial reveals that DaimlerChrysler is entitled
to relief; and what irreparable harm will the granting of an
injunction do to General Motors and the public if the trial
reveals that DaimlerChrysler is not entitled to relief? Once
those evaluations are made, the court balances likelihood of
success and the risk of irreparable harm on a sliding scale:
the better a party’s chances of winning at trial, the less the
balance of harms needs to favor that party. Ty, Inc. v. The
Jones Group, Inc., 237 F.3d 891, 895 (7th Cir. 2001); Eli
Lilly & Co. v. Natural Answers, Inc., 233 F.3d at 461.
If, as the court assumes for this portion of the analysis,
DaimlerChrysler has a better than negligible chance of
success on the merits of either or both of its trademark
claims, its chance of success is slight. Accordingly, the
sliding scale requires that the balance of harms weigh
heavily in DaimlerChrysler’s favor. It does not do so.
If the court allows General Motors to use the intended H2
grille and it later develops that the use of that grille dilutes
or infringes on DaimlerChrysler’s mark(s), DaimlerChrysler
will have suffered significant irreparable harm. The Jeep
grille design no longer will serve as a unique identifier of
Jeep vehicles; to the extent consumers are misled by the H2
grille, the goodwill that the Jeep brand has developed in the
Jeep grille design for the past fifty-six years will suffer. The
loss of so venerable a brand identifier and goodwill would
impact DaimlerChrysler in the marketplace in ways pres-
ently unpredictable, except for the certainty that those
effects would be negative. Those harms “are by their very
58 No. 02-1816
nature irreparable and not susceptible of adequate mea-
surement for remedy at law,” International Kennel Club,
Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1092 (7th Cir.
1988), and irreparable harm is presumed whenever a trade-
mark is infringed and diluted. Eli Lilly & Co. v. Natural
Answers, Inc., 233 F.3d at 469.
If DaimlerChrysler’s Jeep sales are reduced as a result
of that harm, its production also will drop, and Daimler-
Chrysler employees (some of whom work in Indiana, though
the court’s focus is not limited to a single state) will lose
jobs in an unpredictable number. Consumers also would be
harmed: an injunction against trademark dilution or in-
fringement protects consumers from confusion and also
protects a trademark owner’s right to maintain a mark’s
unique association with its products. International Kennel
Club, Inc. v. Mighty Star, Inc., 846 F.2d at 1092; Nabisco
v. PF Brands, 191 F.3d 208, 217 (2d Cir. 1999).
The harm to General Motors can be no less than the
presumed harm to DaimlerChrysler. If DaimlerChrysler has
only a slight chance of proving at trial that the intended H2
grille dilutes or infringes on DaimlerChrysler’s mark, an
injunction against use of the intended H2 grille most likely
would deprive General Motors of the use of its own intellec-
tual property rights in the registered Hummer front end
trademark. General Motors and the consuming public
would suffer the same sort of irreparable harm set forth in
the preceding paragraphs if the court deprives General
Motors of what is very likely to be found to be General
Motors’s own mark.
The harm to General Motors would be far greater, though
the additional harm might not be entirely irreparable.
General Motors has invested $700 million in the H2 project.
General Motors has presented models of H2 (with its
intended grille) at auto shows in Detroit and Los Angeles,
and then-New York Mayor Rudy Giulani and Arnold
No. 02-1816 59
Schwarzenegger participated in the H2’s highly-publicized
introduction in New York. Twenty million people have
attended auto shows in which the H2 concept and produc-
tion vehicles were displayed. The unveiling and launch have
been heavily advertised (General Motors has spent $20
million on advertising20), and the advertising materials
depict the intended H2 grille. On the weekend during the
preliminary injunction hearing, an H2 was auctioned off
for Arnold Schwarzenegger’s charity, and was sold for
$125,000.00. Michael DiGiovanni, general manager of Gen-
eral Motors’s Hummer division, estimated at trial that
when the cost of a re-launch campaign, curative advertis-
ing, and damaged goodwill are considered, an injunction
against the intended H2 grille would cost General Motors
$268 million. If amounts are added for losses incurred by
dealerships and the expense of recalling licensed die cast
toys, Mr. DiGiovanni estimated that the cost to General
Motors would range from $500 million to $1 billion.
About $250 million of General Motors’s expense in pre-
paring for the H2 went to finance the building of a new AM
General plant, where the H2 is to be assembled. As much as
General Motors stands to lose if use of the intended H2 is
enjoined, the blow to the much smaller AM General and the
community around it would be greater. About thirty-five
percent of AM General’s income in the coming years is to be
from the H2 project. General Motors believes it can sell
40,000 H2s per year, and the new H2 plant is designed to
meet that demand. Such a plan requires a large area and a
large, stable workforce.
General Motors’s sales estimates led local and state
governments to the conclusion that the new H2 plant would
20
Much of this sum, of course, was spent during the pendency of
the lawsuit, and so with full knowledge that the eventual H2
might require a different grille.
60 No. 02-1816
bring $477.5 million in new annual sales to Indiana busi-
nesses. As a result, the local and state governments made
extraordinary arrangements to facilitate the building of the
plant, including buying area homes. Word of new jobs went
forth, and AM General received 10,000 applications for
hourly positions, and another 10,000 for salaried positions.
At the time of the hearing, 471 AM General employees were
assembling H2s at the new plant; other AM General em-
ployees-to-be had given notice to their current employers,
and some were in the process of relocating their families to
start work at the new plant. By August, if no injunction is
issued, 1,000 people will be working in the new plant.
Operation of the new plant now costs AM General $4.2
million per month; that figure is expected to increase to $10
million per month by late summer. AM General has spent
more than $30 million in recruiting, screening, testing,
hiring, and training the H2 plant workforce. To facilitate
the H2 project, the union that represents the hourly work-
ers agreed to a ten-year labor agreement.
If General Motors is enjoined from selling vehicles with
the intended H2 grille and ultimate resolution is delayed
until trial (which is as yet unscheduled, but which the
scheduling order contemplates to take place some time in or
around December), AM General will have to close its new
plant. Since AM General is paid (and repays its loan) only
for assembled vehicles that it delivers to General Motors, it
will lose an enormous amount of the 2002 income that was
expected to constitute more than a third of the company’s
overall income. Hundreds of people will lose their jobs, and
the overall economic loss to the new plant’s community will
be enormous and unmeasurable.
None of what the court just set forth would be changed if
General Motors were to choose to use the “painted grille”
that was the subject of much of the information presented
at the preliminary injunction hearing. Some time after this
case began, General Motors designers were told to try their
No. 02-1816 61
hand at designing a grille that could be used on the H2 if
the court enjoined use of the intended H2 grille. Daimler-
Chrysler stumbled upon that information late in discovery.
The grille is depicted in General Motors Exhibit 320.
The alternative grille design would use the same seven-
slotted grille that is now being produced for the H2, but
would call for the grille to be painted so as to blacken out
the top and sides of the slots, producing an optical illusion
in which the eye sees eight “floating bars” instead of the
seven slots.21 DaimlerChrysler does not contend that the
painted grille would dilute or infringe its mark or family of
marks.22 DaimlerChrysler argues that if General Motors
adopted the painted grille as the grille for the H2, produc-
tion of the H2 would be delayed for no more than six to
eight weeks, and there might be no delay at all if Gener-
al Motors were to forego some testings procedures that
21
To the court’s untrained eye, the two grilles look very similar
when seen side-by-side. See General Motors Exhibit 320. When
the court looks at two vehicles with the grilles, however, the vehi-
cles themselves look very different. See General Motors Exhibit
322.
22
General Motors complains that DaimlerChrysler took too long
to disclose its position on whether the painted grille dilutes or in-
fringes. That argument is frivolous in light of serial obstacles that
General Motors threw onto DaimlerChrysler’s decisional path—
first developing it without the knowledge of its Hummer division
or AM General (the likely pool of deponents in this case), then
disclaiming its existence, then claiming a work-product privilege
until ordered to produce the information, then providing a photo-
graph from which DaimlerChrysler could not tell what the grille
looked like, then refusing to provide another photograph, which
in turn required DaimlerChrysler to employ computers to figure
out what the grille looked like. Perhaps General Motors acted
properly at each turn, or perhaps it didn’t; the court need not
decide that issue. But to accuse DaimlerChrysler of taking too
long to say what it thinks of the painted grille is simply nonsense.
62 No. 02-1816
DaimlerChrysler says General Motors has waived in other
instances.
General Motors disagrees with each aspect of Daimler-
Chrysler’s argument on the painted grille. The General
Motors witnesses—and it should be noted that none of those
witnesses claimed to be final decision-makers on any of
these issues—said that General Motors would never waive
quality control procedures on a part that is so conspicuous
on a $50,000.00 vehicle. The six-to-eight week figure, Gen-
eral Motors notes, was best-case scenario based on an
assumption that the grille supplier would “hit a home run”
in shifting to the painted grill, and actual delay would likely
be longer—perhaps even much longer.
Most fundamentally, says General Motors, the painted
grille probably would never be accepted as an option. The
head of the Hummer division and the president of AM
General both said they would strongly recommend against
the painted grille’s use because it betrays the vehicle’s
Humvee heritage. They say they would recommend that
General Motors put the project on hiatus (and close down
the H2 plant) and try to win at the December trial.
DaimlerChrysler notes that General Motors has not made
a final decision, and in light of the high-risk strategy that
General Motors has shown at times in this case, the court
cannot discount the possibility that General Motors is,
as DaimlerChrysler’s counsel charged in final argument,
“holding a gun to its own head and to the head of this
community and daring the court to pull the trigger.”
Nevertheless, the court believes it to be more likely than
not that General Motors would not use the painted grille
were it temporarily enjoined from using its intended H2
grille. General Motors has invested hugely in promotion,
and has led consumers to expect a vehicle of a Humvee-like
appearance. Mr. DiGiovanni testified to his belief that be-
tween advertisements and auto shows, General Motors has
No. 02-1816 63
generated 500 million “impressions” around the H2 (which
the court understands to mean people thought to have been
exposed to a promotion or advertisement) that would have
to be corrected if a different grille were used. The use of any
different grille, even if accompanied by hundreds of millions
of dollars in advertising to modify those impressions, Mr.
DiGiovanni opined, could cost General Motors five to ten
percent of its anticipated H2 sales—some $500 million over
two and a half years.
That estimate assumes that the market for the remaining
ninety to ninety-five percent of sales viewed the painted
grille as being sufficiently consistent with the original
Humvee to remain prospective purchasers. General Motors
has done no consumer research to test that hypothesis.
Perhaps, as DaimlerChrysler says, General Motors should
have done such research by now—there was certainly
enough time to do so. The question for the court, though, is
what is likely to ensue if the preliminary injunction is
issued, and the court is persuaded that as long as a ten-
month delay might solve the problem, General Motors
would not roll out H2s that risk consumer rejection either
because the H2s have a grille that is unattractive to
potential purchasers, or because the H2s have a grille that
differs from what potential purchasers were led to expect,
or because of both reasons.
General Motors has made decisions that increased the
prospective losses that would flow from an adverse decision
on this motion. General Motors responds that it should not
have been expected to knuckle under to what it viewed as
unreasonable demands of DaimlerChrysler; reasonable
minds might agree or disagree with that proposition. Nev-
ertheless, those decisions were made by General Motors,
not by AM General or its new employees—and the harm
that an injunction would wreak on them is not of their own
making. Further, even setting aside the high-stakes de-
cisions General Motors has made during the pendency of
64 No. 02-1816
this suit, it remains that a preliminary injunction would be
quite likely to harm irreparably General Motors’s intellec-
tual property and consequently to do irreparable harm to
the public’s right to identify products. Nabisco v. PF
Brands, 191 F.3d at 217; International Kennel Club, Inc. v.
Mighty Star, Inc., 846 F.2d at 1092.
Accordingly, even if DaimlerChrysler is assumed to have
some likelihood of success on the merits of its dilution
and/or infringement claims, the balance of irreparable
harms to the parties and others weighs enormously against
the requested injunction.
K. CONCLUSION
For these reasons, the court finds that DaimlerChrysler’s
motion for a preliminary injunction must be denied be-
cause (1) DaimlerChrysler has virtually no chance of
proving at trial that it had a “family of marks”—grilles with
seven to ten vertical slots that appear to be stamped from
a planar surface, all of which identify vehicles as Jeep
models—when AM General began selling the Humvee with
the grille that General Motors intends to use on the H2;
(2) DaimlerChrysler waited far too long to contend now that
the H2 grille dilutes the uniqueness of the grille now in use
on the Jeep Wrangler as an identification of the Wrangler’s
source; and (3) DaimlerChrysler has virtually no chance of
showing a likelihood of consumer confusion between the
Jeep Wrangler and the H2.
The court also finds that even if DaimlerChrysler had
shown some chance of winning at trial on one or both of its
claims, a preliminary injunction still would not be appropri-
ate in light of the harm that General Motors, AM General,
and the public would suffer if the injunction were issued
and DaimlerChrysler lost at trial.
No. 02-1816 65
Accordingly, the court DENIES DaimlerChrysler’s request
for preliminary injunction (filed July 13, 2001).
SO ORDERED.
ENTERED: February 28, 2002
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-18-02