AMF Inc. v. Sleekcraft Boats

AMF Incorporated (plaintiff) manufactured recreational boats under the trademark Slickcraft. Slickcraft’s boats were primarily designed for family use in fishing, waterskiing, pleasure cruises, and sunbathing. AMF distributed the Slickcraft boat line nationally and advertised in general-circulation magazines. AMF’s gross sales from 1966 to 1974 were nearly $50 million. Bruce Nescher (defendant) owned Sleekcraft Boats (defendant) and manufactured recreational boats under the trademark Sleekcraft. Nescher selected the Sleekcraft mark without knowledge of AMF’s Slickcraft mark. Sleekcraft boats were low-profile racing boats designed to have good handling capability for racing, high-speed cruising, and waterskiing. Nescher distributed the boats nationally and advertised in publications for boat-racing enthusiasts. Nescher’s gross sales exceeded $6 million by 1975. AMF and Nescher sometimes advertised their boats at the same boat shows, and AMF’s and Nescher’s local retailers promoted the boats similarly through smaller boat shows, in local newspapers, and in telephone-directory advertising. Both boat lines were priced similarly. AMF notified Nescher that Nescher was allegedly infringing AMF’s trademark. Nescher then adopted a distinctive logo and began adding a “Boats by Nescher” plaque to the boats and most advertising materials. However, the Sleekcraft mark appeared without the logo on Nescher’s stationery, signs, trucks, and some advertisements. AMF sued Nescher and Sleekcraft Boats, asserting trademark infringement and seeking injunctive relief. After a bench trial, the district court found that AMF’s trademark was not infringed because the concurrent use of the Slickcraft and Sleekcraft marks was unlikely to confuse the public. AMF appealed.