Thursday, December 07, 2017

Court says shoo to Scat's infringement claim against Dodge

Scat Enterprises, Inc. v. FCA US LLC, 2017 WL 5896182, No. CV 14-7995 (C.D. Cal. Jun. 8, 2017)

Scat, a maker of aftermarket car parts, sued over FCA’s use of “Scat Pack” in connection with its Dodge Challenger and Dodge Charger “Scat Pack”-edition cars, primarily alleging reverse confusion.  The court rejected its claims for money remedies (disgorgement, corrective advertising, treble damages, or punitive damages).  Scat sought disgorgement of profits under an unjust enrichment theory rather than as a measure of lost sales; this requires willful infringement in the Ninth Circuit.  And willfulness means actions “calculated to exploit the advantage of an established mark.”  As to Scat’s reverse confusion theory, there could be no such calculated exploitation where the junior mark overwhelms the senior. Thus, there can be no accounting “even if the defendant was willfully blind to the possibility of infringement.”  

Nor could there be disgorgement under a forward confusion theory, because top Dodge executives responsible for Dodge’s use of “Scat Pack” in 1967, for the 2013 launch of “Scat Pack” for newer models of the Dodge Charger and Challenger cars, and for Mopar’s use of “Scat Pack” for kits for older models, all testified that they were unaware of Scat’s existence. In 2013, FCA’s legal department conducted a trademark search for the phrase “Scat Pack” and neither Scat nor any of its trademarks showed up in the search. Scat argued that FCA’s search wasn’t sufficient because it didn’t search for the word “Scat” alone, but that doesn’t translate into willful exploitation. Likewise, FCA’s decision to continue using the “Scat Pack” mark after the USPTO refused registration of the mark—one that FCA used for decades—also wasn’t willfulness.

Corrective advertising: To get this, a plaintiff must prove that the alleged infringement resulted in actual lost value to its mark. There was no such showing here.  Scat argued that there was actual confusion shown by FCA’s survey; though this was disputed, Scat didn’t submit its own survey, despite having the clear financial means to do so, creating “an inference that the results of such a survey would have been unfavorable to its position.”  Plus, even actual confusion wouldn’t  itself show actual harm to its mark. Here, there was no evidence demonstrating that FCA’s use of “Scat Pack” adversely impacted Scat’s growth or caused it to lose any sales or business opportunities.  Scat also waived its claim for punitive damages.

But anyway, confusion was unlikely. The key factors: (1) relatedness of goods; (2) similarity of marks; (3) consumers’ degree of care; (4) marketing channels. Though the parties were both generally part of the automotive industry, Scat makes “high-end performance aftermarket car parts which it markets and sells to a sophisticated niche of car enthusiast consumers,” while FCA used the “Scat Pack” mark to refer to two of its passenger cars that retail for approximately $40,000 apiece. “Although the goods may inhabit the same broad field, the automotive industry, they are markedly different.”  FCA sold parts/kits only for its own cars, and only through authorized dealerships. Scat made parts for several car companies, including Chevrolet, Ford, Pontiac, and Honda, and sold these parts through aftermarket parts distributors or directly to end consumers. Relatedness plainly favored FCA.

Similarity: While the parties both used the word “scat” to signify speed and quick acceleration, FCA’s addition of “pack” distinguished it.  In 1967, when FCA began using “Scat Pack,” it was an umbrella marketing term for several of Defendant’s muscle cars, and then in 2013 it was the tagline for the high performance versions of its Dodge Charger and Dodge Challenger cars. The term “Pack” gave the meaning of a group or club, e.g., “Run with the Dodge Scat Pack.” Moreover, the designs were different: FCA used the “Scat Pack Racing Bee” character and its house marks, while for Scat, generally the mark’s logo only contains the unitary word “Scat” in different stylized fonts or there’s also a reference to a specific part, e.g., “Scat Crankshafts.” Even though the marks sometimes appeared in plain font when used on third-party websites such as eBay Motors and Amazon, they generally appeared with their distinct logos. Advantage FCA.

“[B]ecause the typical consumers of the parties’ products are relatively sophisticated, there is minimal chance of confusion.” Scat’s rotating assemblies sold for over $2,000, while FCA’s cars retailed for approximately $40,000 apiece, justifying greater care, and Scat’s customers in particular were “a sophisticated niche of car enthusiast consumers. There is no question that purchasing one of Plaintiff’s specialty automotive parts requires either a considerable amount of research by a ‘casual’ consumer or, alternatively, the knowledge already held by a sophisticated car enthusiast.”

And the parties’ marketing channels were distinct: FCA sold to authorized independent dealerships, while Scat sold to aftermarket parts distributors or directly to end consumers. FCA marketed its cars to the general public primarily through mass media television and radio; Scat marketed to its through its own website and catalogs, trade shows, and advertising in various industry trade and consumer magazines. Occasional overlap at the same trade shows was insufficient to increase the likelihood of confusion.

No comments: