Am General Corporation and General Motors Corporation v. Daimlerchrysler Corporation

311 F.3d 796, 65 U.S.P.Q. 2d (BNA) 1001, 2002 U.S. App. LEXIS 23725, 2002 WL 31545350
CourtCourt of Appeals for the Seventh Circuit
DecidedNovember 18, 2002
Docket02-1816
StatusPublished
Cited by200 cases

This text of 311 F.3d 796 (Am General Corporation and General Motors Corporation v. Daimlerchrysler Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Am General Corporation and General Motors Corporation v. Daimlerchrysler Corporation, 311 F.3d 796, 65 U.S.P.Q. 2d (BNA) 1001, 2002 U.S. App. LEXIS 23725, 2002 WL 31545350 (7th Cir. 2002).

Opinion

BAUER, Circuit Judge.

Plaintiffs AM General Corporation (“AM General”) and General Motors Corporation (“GM”) brought a declaratory judgment action in the district court asking the court to find that the front-end grille design of their recently developed H2 1 sport utility vehicle (“SUV”) does not dilute or infringe upon a trademark held by the Defendant, DaimlerChrysler Corporation (“Daimler-Chrysler”), 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 Daimler-Chrysler’s preliminary injunction finding: 1) that DaimlerChrysler showed virtually no chance of success on the merits of either its federal dilution or infringement claims; and 2) that, even if DaimlerChrys-ler did show a better than negligible chance of winning on the merits, the bal-anee 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 HI vehicles occurred in a different market than the mainstream SUV market where the H2 is being sold; 2) whether the district court erred in finding that Daimler-Chrysler 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 dilution 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 sole *803 ly 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 Da-imlerChrysler Corporation, but Daimler-Chrysler seeks the preliminary injunction. 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 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 eviden-tiary 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. Daim-lerChrysler owns the Jeep brand as the successor corporation to Chrysler Corporation, American Motors Corporation, Jeep Corporation, Kaiser Jeep Corporation, Willys Motors, Inc., and Willys-Over-land 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 “HI.” AM General is to assemble the H2 under contract -with General Motors and continues to produce the HI and the Humvee.

For the reasons that follow, -the court denies the motion for preliminary injunction.

A. Paeties’ Positions and Applioable Legal Prinoiples

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, DaimlerChrysler has the burden of demonstrating that it has a reasonable likelihood of success on the merits of its underlying 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 preliminary injunction might impose upon Gener *804 al 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 (IMG), 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 (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.”

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311 F.3d 796, 65 U.S.P.Q. 2d (BNA) 1001, 2002 U.S. App. LEXIS 23725, 2002 WL 31545350, Counsel Stack Legal Research, https://law.counselstack.com/opinion/am-general-corporation-and-general-motors-corporation-v-daimlerchrysler-ca7-2002.