Tuesday, October 11, 2016

Dual use of same mark on customized Jeeps not confusing, court rules

Moab Indus. v. FCA US, LLC, No. 3:12-cv-8247, 2016 WL 5859700 (D. Ariz. Oct. 6, 2016)

Moab sued FCA, aka Chrysler, for trademark infringement (via reverse confusion) and state-law dilution based on Chrysler’s use of MOAB on a limited edition version of its Jeep brand.  Chrysler counterclaimed for infringement and dilution because Moab customizes and “upfits” Jeeps and applies its Moab mark without removing Chrysler’s marks; the expansiveness of this claim caught my eye, though unfortunately the court doesn’t give a clear statement about just how implausible and dangerous that claim is.  The court conducted a bench trial and rejected everyone’s claims.
Chrysler's Moab Special edition

Moab Industries' customized Jeep

Moab has a registration for the service mark MOAB INDUSTRIES to plaintiff for “automotive conversion services, namely, installing specialty automotive equipment.” In 2012, Chrysler filed an ITU application for the trademark MOAB for use in connection with “[m]otor vehicles, namely, passenger automobiles, their structural parts, trim and badges.”  A 2012 trademark search revealed plaintiff’s MOAB INDUSTRIES mark, as well as MOAB TAXI for “taxi transport”; in Class 39 and MOAB STAR for “lights for vehicles,” as well as, inter alia, MOAB standing alone for “bicycles”; “retail store and online retail store services in the fields of clothing, camping gear, sporting goods”; “juices and fruit drinks”; and “eyewear; namely, eyeshields for use in sports activities.” The search results also included common law uses like MOAB 4X4 OUTPOST and MOAB OFFROAD,  both auto conversion businesses—the former actually located in Moab.  The PTO refused Chrysler’s application because of likely confusion with two registered marks, one of which was Moab’s.  The application has been suspended in light of the current lawsuit, filed in late 2012.  (Given B&B, it turns out that Moab might have been better off waiting—query whether there’s any reason to apply preclusion in the other direction!)

For model year 2013, Chrysler introduced a JEEP WRANGLER MOAB Special Edition vehicle and sold about 3,375 of them.  (Chrysler also sells a MOAB branded, after-market wheel, and has done so since before Moab began selling upfitted vehicles. The wheels themselves do not bear the MOAB mark and there was no evidence of likely confusion between the wheels and Moab’s services.)

Relevant factors: the MOAB mark was “relatively weak,” somewhere between suggestive and arbitrary; for these purposes, suggestive marks are conceptually weak, and Moab produced no evidence of commercial strength of either mark. Chrysler didn’t use MOAB on its vehicles any more.  This conceptual and commercial weakness decreased the likelihood of reverse confusion.

The goods were closely related, sold to the same class of purchasers for similar uses and functions, though Moab’s version had “a more robust stance,” whatever that means.  The marks were highly similar; both versions placed the MOAB mark in large letters on both sides of the hood of their vehicles, suggesting potential confusion.

Actual confusion: Moab produced witnesses testifying that web searches for “Moab” regularly turned up first a link to Chrysler.  But such searches did not suggest any connection between the parties, and Moab’s website expressly disclaimed any connection.  Two witnesses bought Moab upfitted Jeeps and later encountered Chrysler’s Moab special edition, but they weren’t potential customers; they both knew they owned Moab-upfitted vehicles. Another witness was clear that she knew that both parties were selling different Moab branded Jeeps, and she was in a client-banker relationship, not a buyer-seller relationship with Moab.  Leading questions caused some other witnesses to express “confusion,” but they simply had questions about the source of the Moab Special Edition, and there was no evidence linking their questions to any potential or actual effect on customers’ purchasing decisions.  [NB: Materiality is not usually required!] For example, one witness was a buyer for a dealership that bought and sold Moab-upfitted Jeeps. When he saw a Moab Special Edition, he recognized that it wasn’t a Moab Industries vehicle, so he went online and found information about the Special Edition.  “The lack of substantial evidence of actual confusion suggests little likelihood of confusion.”

The parties use very different marketing channels: Chrysler sells new vehicles through authorized dealers, while Moab buys those vehicles, upfits them, and then resells them through auction and resale dealers, “in some instances the used car lots of defendant’s authorized dealers. This factor suggests little likelihood of confusion.” Though Moab has aspirations to make vehicles, these are mere aspirations, and the parties are unlikely to expand into each other’s goods.

The parties’ goods are expensive and intended for off-highway use under difficult to extreme circumstances. “These are not purchases likely to be made without careful consideration and investigation of the product.”

Intent: Chrysler chose the Moab mark “largely in consideration of defendant’s long-standing participation in off-road jamborees at Moab, Utah.” There was no evidence of prior knowledge of Moab Industries by top management.  Chrysler’s Arizona VP knew about Moab Industries, as did Chrysler’s audit group; Chrysler designated Moab Industries as a fleet purchaser, but there was no evidence that this knowledge was ever conveyed to the legal department or top management before Chrysler’s CEO approved the Moab Special Edition.  The PTO’s finding of likely confusion was “entitled to very little weight inasmuch as the USPTO would not have had access to most of the evidence which is before the court.”

Overall, lack of actual confusion, marketing channels used, and degree of care weighed strongly in favor of finding confusion unlikely.

Chrysler counterclaimed to cancel the MOAB INDUSTRIES based on its use on vehicles manufactured by Chrysler, which Chrysler argued misrepresented the source of Chrysler’s vehicles. There was no evidence that Moab was claiming to have manufactured the Jeeps it resold. Moab’s advertising clearly advised potential customers that Moab’s MOAB vehicles weren’t endorsed by Chrysler, or that the sales had caused any economic harm to Chrysler or damaged its goodwill in any way.

Dilution: Again, there was no evidence of tarnishment, despite Chrysler’s “bold” assertions of inferior quality and speculation about the stability of upfitted vehicles. Owners of Moab-upfitted vehicles who testified were “well satisfied with their vehicles and plaintiff’s follow-up services.”

Trademark infringement: True, “the use of MOAB by both parties – and in particular, the fact that both plaintiff’s and defendant’s MOAB vehicles display defendant’s registered JEEP, JEEP GRILLE, and WRANGLER registered marks – gives rise to questions (some say confusion).” But there was no evidence of confusion, and Chrysler’s trademark attorney testified that she was not “aware of anybody in the world who expressed a belief that [plaintiff] was actually manufacturing Jeeps.”

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