Tenth Circuit: Post-sale confusion relevant, but denial of injunction still affirmed

September 13, 2007
Post by Blog Staff

In a decision rendered yesterday, the Tenth Circuit affirmed a district court's denial of a preliminary injunction in a trade dress infringement case. The Tenth Circuit did join multiple other circuits in holding that post-sale confusion can be relevant to a claim of trade dress infringement.

Evidence of post-sale confusion, however, was still insufficient evidence to justify a preliminary injunction. Assessing the district court's application of the traditional four-factor test considered when injunctions are requested, the court held the district court did not abuse its discretion in finding that the plaintiff did not make a "strong showing" of likelihood of success on the merits, and that the balance of equities did not favor the plaintiff. Accordingly, the denial of the preliminary injunction was affirmed.

GM sells the Hummer line of vehicles, and claims trade dress rights in the Hummer's nose and grill area, and trademark rights in the word "Hummer" and the phrase "Like Nothing Else." Hummers were derived from the military vehicle known as the Humvee. The defendant, Urban Gorilla, sells body kits for use with various trucks to give the trucks a "military" look. GM sued, claiming that Urban Gorilla's body kits resulted in trucks that infringed GM's trade dress in its Hummer vehicles, and moved for a preliminary injunction against further sales of Urban Gorilla's body kits.

The district court denied the motion, finding that GM had not made a "strong showing" of likely success on the merits of the case, and that the balance of the harms did not favor GM. GM appealed the denial.

The Tenth Circuit affirmed. In order to establish a claim for trade dress infringement, the plaintiff must show:

(1) The trade dress is inherently distinctive or has become distinctive through secondary meaning; (2) There is a likelihood of confusion among consumers as to the source of the competing products; and (3) The trade dress is nonfunctional.

As an initial matter, the court noted that the parties did not dispute, for purposes of the appeal, that the Hummer trade dress was inherently distinctive, and so the court assumed, without deciding, that it was. Therefore, the first of the three elements was satisfied.

The court then turned to GM's assertion that the district court improperly refused to consider evidence of post-sale confusion in the likelihood of confusion analysis. The Tenth Circuit first held that post-sale confusion may be relevant to the likelihood of confusion in a trade dress case, joining the First, Second, Fourth, and Sixth Circuits in so holding. Next, however, the court noted that the district court did not discount evidence of post-sale confusion:

With reference to the present case, we conclude that the district court appropriately recognized the possibility of post-sale confusion, but simply found GM’s evidence insufficient to justify an emergency order.

Notably absent was any evidence regarding Urban Gorilla's intent in designing its body kits. This lack of evidence, combined with the court's observation that there was a question regarding the strength of GM's trade dress, led the court to hold that the district court did not abuse its discretion in its determination that there was no "strong showing" of likely success.

In addition, the court held the district court did not abuse its discretion in determining the balance of equities did not favor GM. The district court took into account that if an injunction was entered, Urban Gorilla would likely go bankrupt. GM contended this was error, because, it asserted, a defendant who openly and intentionally infringes "can hardly claim to be harmed, since it brought any and all difficulties occasioned by the issuance of an injunction upon itself." The court rejected this contention, once again noting that there was no evidence of Urban Gorilla's intent, and, as noted previously, there was no "strong showing" of likely success. As stated by the court: "Where a movant has failed to make a strong case for infringement, it is not entitled to consideration of whether the nonmovant has brought the harm upon itself." As a result, the court held the district court did not abuse its discretion in denying the preliminary injunction.

To read the full decision in Gen. Motors Corp. v. Urban Gorilla, LLC, click here.

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