Peter Afrasiabi: Hello and welcome. Today's program is Trademarks and Cars. My name is Peter Afrasiabi. I'm an intellectual property lawyer at the law firm of One LLP. We are an intellectual property boutique in Southern California, where we specialize in copyright trademark and patent litigation and prosecution. Today's program is focusing on trademarks and cars and we're going to look at everything from Ford to General Motors and, from the continent, everything from Ferraris to Testarossas.
Now, who is this program for? If you love cars and you're curious about cars, this program is for you. If you don't really love cars, but you're curious about trademark law and why cars all look different and how you sometimes think cars look really similar and is that allowed, this program is for you. This is going to be a great general overview of intellectual property law, specifically trademark law, for the non-IP lawyer.
And if you're an IP lawyer and you specialize in trademark law, this is going to take you into the depths of that species of trademark law, known as trade dress, where we look at the protection for car designs and packaging designs with respect to cars. And if you're just a generalist or you're a transactional lawyer, and you want to have a better understanding of trademark law and what's allowed, what isn't allowed in terms of similarities of designs, this is a great program for you to educate your clients in your practice. So buckle up, and let let's get our engines revved, and let's get going.
As an overview, today we're going to look at really where the cars collide with the law and we're going to look specifically at trade dress law principles. Now, trade dress is a species of trademark law. It's another way of saying trademark, but we call it trade dress because we're talking about the design of a product or its packaging, functioning as a trademark.
And so, for the generalist, you're all well aware of the idea that the Nike swoosh is a trademark. When you see that swoosh, you think Nike. And the logo, itself, depicts and is identified with a source. It's a source-identifying logo. Well, that's a trademark, as you know. And the same can be true for the look and feel of a car. It can function as a source identifier to the brand manufacturer who makes that car, the single source. And when we're talking about it in the context of cars or product packaging and product design, we call it trade dress. So it's nothing fancy. It's just another way of saying trademark.
As we look at this overview of trademark law, we are also going to look at the critical elements that one has to look at when you're assessing whether someone is infringing a trademark. And that is functionality, secondary meaning, and likelihood of confusion. And those are the major issues that are at play when we're talking about trademarks and cars. We're going to look specifically today at the application of these trademark law principles to various automobiles, to see where there is and also where there is not protection for the auto companies, in terms of the auto shapes or the parts of their automobiles.
Here, we're going to look at Hummers from General Motors, we're going to look at Vipers from Chrysler, we're going to look at Bentleys, and we're going to look at Ferrari Testarossas and Ford Shelby Cobras. And of course, since this is an auto program, we're going to have a couple pit stops along the way and we're going to look at the application of trademark law principles with respect to cars, but slightly far afield, sometimes from the actual body shape of the car, but to other aspects of cars and car companies' brands. And so here, we are going to be on the continent, looking at Porsches and Lamborghinis.
So one of the big picture questions that we're going to look at today ... You see here on this slide is a picture of a Ford Shelby Cobra and a Ferrari Testarossa. And a question we're asking you today is, who wins the trade dress war? Do those Ford Shelby Cobras have trade dress protections, do Ferrari Testarossas have trade dress protections, or maybe both of them? Now, here's a hint; like the real race from history, here today there's going to be a winner and there is going to be a loser. So place your bets, get ready and, at the end of the program, we'll see who wins, who loses in this trade dress war.
Let's start by asking, what is trade dress? And as you can see here on this slide, we have a definition of trade dress and we have some pictures to help illuminate different aspects of trade dress. At its root, trade dress is the design and appearance of a product or packaging of a product together with the elements making up the overall image. And that serves to identify the product presented to the consumer. And so what we're looking at is, for example here, the famous design and shape of the Coca-Cola bottle. That has trade dress protection, in terms of the product configuration. 7up, Dr. Pepper, Pepsi, they can all sell their drinks in a bottle, but they can't use the identical shape of the Coca-Cola bottle. Even if they put their own logo on it, that bottle's design and shape is, itself, protected.
There's also trade dress protection for colors and shapes of pill capsules, for example, as you see there. And then in the lower left corner, you can see the famous restaurant, Fuddruckers. And Fuddruckers has secured, in the court opinions, trade dress protection on the look and feel of its overall bar and restaurant. And so what we're talking about, as you can see in the picture, is the tiles, the colors, the bar, the roofing, and the overall layout and design, which is unique to Fuddruckers.
We also can look at this in the aspect of websites. And when we're in the 21st century now and we're getting further away from only brick and mortar and physical spaces, questions have been risen in the courts as to whether there is trade dress protection in the look and feel of a website. And there, you can see a case that's been litigated heavily. It's the Ingrid & Isabel baby website. And they claimed trade dress in the website look and feel. And they survived a defense summary judgment motion against a defendant who had a similar look and feel for their website.
And so what do we mean when we talk about the look and feel of a website? Well, in that case, the look and feel that survived summary judgment was the logo in what was defined as a feminine script in pastel pink-orange hues in the upper left corner of the page, the pink and orange script carried throughout the site. There were closeup shots of model photos featured from head to mid thigh, all wearing white tank tops with jeans with long naturally wavy hair. The model photos featured mouseover changes of whimsical casual poses to display all angles of the product. There were model photos instead of product photos throughout the site. The color and the pattern of the back wallpaper was all similar.
The way the category sliders were done on the website was similar, the use of dots for category sliders and similar colors of the dots, and then the placement of the models vis-a-vis the text, the general fonts used, all of that was identified as being trade dress, including down to the letters, the numbers, the dimensional objects and whatnot. And the combination of all of that was held to be sufficient trade dress to be evocative of that brand, the Ingrid & Isabel baby website brand. And that, again, survived summary judgment.
So where does trade dress find a home? Where do trademarks find a home? Well, the home in the US Federal Code. It's based on federal statutory law, specifically the Lanham Act. And the Lanham Act in section 1125A, as you can see here quoted, states, "Any person who, on or in connection with any goods or services or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact is ultimately liable for trademark infringement." And that's in title 15 of the US Code at section 1125A.
Now, the Lanham Act also defines the universe of things that can qualify as a trademark. And it's defined in the broadest of terms, as the US Supreme Court has said, "Anything that a human being might use is capable of carrying a meaning as a symbol or device." That is anything we do, we say, we create could be capable of being source identifying and functioning as a device that connects, in the minds of consumers, a company and its product or services and that brand to the source of the selling entity of those products or services.
The Lanham Act, then, is intended to make actionable the deceptive and misleading use of trademarks and to protect persons engaged in commerce against unfair competition. And that's from the Two Pesos versus Taco Cabana case, reported at 505 US 763, page 768. Trade dress then functions just like trademarks, in the sense that trade dress, as we saw in the prior slide, the product packaging or design, can create a visual impression which functions like a word or picture trademark. So the brand, McDonald's, McDonald's is a trademark, the Nike swoosh, as I talked about, trade dress can function in exactly the same way, in terms of creating a visual impression in the mind of the consumer between that look and feel and a brand.
On the next slide, you can see we're going to talk about registration requirements. And the fundamental question is, is there a requirement to register a trademark in order to have a trademark? And the answer is no. Now, there can be consequences if you don't have a registered trademark. And for example, if you want to sue on unregistered trade dress, then you must show secondary meaning, whereas if you've registered your trade dress or your trademark with the US Patent Trademark Office and you secure the registration, there will be a presumption in your favor of secondary meaning. But again, there is no registration requirement. Trademark rights are acquired simply by the virtue of using a mark in commerce to denote your brand. That, itself, that act of using it in commerce, gives you common law trademark rights.
Now, there's great benefits in registering, not only the presumption that we talk about here, but also you can secure a national footprint for your brand. So for example, take me and my law firm, the law firm of One LLP. We have registered the trademark in our name and in our space of legal services. And even though we only have offices in Souther California, the registration gives us a national footprint. So if someone wants to open a law firm in New York and call it One LLP, they'll have a problem, in terms of our trademark.
In distinction, if you, for example, start a little chicken restaurant, let's call it, in Newport Beach, California, and you call it Peter's Fantastic Rotisserie Chicken, something like that, and you only do it here and it becomes super, super popular right here, but you do not register your trademark, someone can come along and then use that same trademark to open a chicken restaurant somewhere else. Maybe it'll be in Savannah, Georgia or Flint, Michigan, wherever it may be, and you will not be able to stop them because your trademark rights, as defined at common law, will have limited geographic scope to them. So of course, we'll look to see, where was Peter operating that chicken restaurant? Where was he advertising? It was all local, so I have local rights. So there's a great benefit to your client to registering and that's a good tip aside.
Now, the contra to this is patent and copyright law. In patent, for example, you have to have a government-registered/issued patent. Otherwise, you literally have no patent rights. There is no such thing as an unregistered patent. You can only have patent rights if you manage to register your invention and secure the government, the Patent Trademark Office's, approval of you having a patent on your claims.
Now, in copyright, it's a bit of a hybrid in the sense that there's no registration requirement. You have a copyright the moment you fix anything in a tangible medium that's original to you, but if you ever want to enforce your copyright, you have to have a registration in order to sue, and that's a basic standing requirement that comes from the US Supreme Court. And it's relatively new in the law. It was in 2019 where the Supreme Court resolved a circuit split and held that there must be a registered copyright in order to file a copyright infringement lawsuit.
So as a good tip to your clients, if they securing copyrights and they're relying on just the existence of their rights, based on their own creation and fixation in a tangible medium of their work, that's great, but if they ever want to enforce them, they should register the copyright. And so it's good advice to, frankly, be prophylactic, register your copyright and get ahead of it.
Now, let's look at the elements that a plaintiff has to show to claim trade dress. To state a claim for trade dress infringement, the plaintiff must show that its trade dress is non-functional, number one. Number two, either inherently distinctive or has acquired secondary meaning and, number three, is likely to be confused with a competing trade dress by members of the consuming public.
Now, in the context of product design, there must always be secondary meaning. It cannot be inherently distinctive. And that's the US Supreme Court in the Walmart case that you saw in an earlier slide. Product packaging, like a word mark, however, can be inherently distinctive. So there's this distinction in the law when it comes to trade dress in that product packaging can, itself, acquire inherently distinctive nature, just based upon its look and feel, but the actual design of a product, the product itself, for example, a pocket knife, must always have secondary meaning. And that's simply because courts have said that product design can never be inherently distinctive. It must, because it's a product, have some association in the consuming public's mind.
Let's look at the first element, and that is the plaintiff's burden to show the trade dress is non-functional. Product packaging and design must be non-functional. If it is functional in nature, then the Lanham Act cannot protect it. So a party has to go to the patent laws and get the patent on the functional item, subject to your limited patent monopoly. So if you're dealing, in other words, with products that are truly functional, the only way to secure some sort of monopoly protection over them to exclude others selling the same product as you or your client is to go to the patent laws.
Now, what's the rationale for this? Well, the rationale is, in root, it's tied to the length of time that trademark rights exist. And the question then is, how long do trademark rights exist? Well, they last forever, so long as you're still using it. So you think of the Ford logo. It's been in existence now for a century and Ford still maintains a monopoly on the use of that logo in the place of selling cars. And in a thousand years, if the Ford Motor Company is still around selling cars, probably flying cars or spaceships or whatever by then, it will still have trademark laws.
Now, this creates huge tension with patent laws because patent laws have a very limited monopoly. If you create some new, novel, non-obvious functional invention, then you can get exclusive control over it, but the quid pro-quo for that exclusivity is a limited monopoly. You get 20 years and then everyone can come along and copy your new, novel, non-obvious invention 20 years later. And so what the courts are concerned about is, when they're looking at trade dress cases in product design particularly, is not allowing people a backdoor to permanent intellectual property protection, a permanent monopoly basically, by using trade dress Lanham Act law instead of patent law. And that tension is always in existence in the cases, as we'll see shortly.
Now, on the first element, it's the plaintiff's burden to show that their trade dress is not functional. And there about four factors that, basically, all the courts across the country and all the circuits look at to assess this question of whether a product is functional. The first factor is whether the design yields a utilitarian advantage. And the practice point or tip here is you want to go look for patents in the field on the touted trade dress as evidence of functionality.
So for example, if the plaintiff is claiming that they have trade dress in some product design, if you can find a whole bunch of patents in that field on the same basic design, that is strong evidence that the design is not really one that is Lanham Act worthy of protection and it's really functional. And if this first factor, the answer to the question is, yes, it yields a utilitarian advantage, then it leads to a conclusion of functionality.
The second factor is whether alternative designs are available. If there are no alternative designs available, then it's likely functional. In other words, if this is the only way to do this and achieve this, that tends to indicate that something is functional.
Number three, whether advertising touts the utilitarian advantages of the design. And this is a really critical tip to think about if you're in the context of litigating or pre-litigating a potential trade dress case. Go look at the Wayback Machine, the internet archives, to see how the plaintiff claiming trade dress rights in, for example, you or a client receives a cease and desist letter where someone's claiming trade dress design rights in their tires or something, well, go to the Wayback Machine and see how that plaintiff advertised that tire before they started suing you or sending letters. And you may find that it was advertised for years in very functional terms. In other words, the plaintiff said, "This is a great product because it can achieve functions A, B, C, and D." That is highly indicative of something being functional and, therefore, not entitled to trade dress protection.
The final factor is whether the particular design results from a comparatively simple or inexpensive method of manufacturer. And this basically looks at a product feature as functional if it's essential to the use or purpose of the article. And that's a critical fourth factor. These factors are all weighed in the calculus to then have a court assess whether something is functional.
On our next slide, you can see some examples of products that courts have rejected on functionality grounds. And we have three cases here, all from the Ninth Circuit. You have pictures of the products there, so you can understand these snippet citations I've given to you. And there are the case cites, if you want to look at them in more detail, but the [Seacault 00:19:17] case from the Ninth Circuit, as it's 668 [F 3rd 00:19:20] 677, it's a 2012 case and it's a traction hoist used in external suspension bridges for commercial projects. And the court said that that traction hoist is, itself, fundamentally functional. And it's too big to put a picture of it, but you can go look it up and you can get more, but we have two pictures for the next cases here.
The next one is [Ty Tech 00:19:41]. And this is, again, a Ninth Circuit case and it's a webbing cutter. And you can see there the picture of this handheld device that you can just hold in your hand and you can quickly cut things, cut webbing and whatnot for product packaging and wrapping them up. The court said that was functional. And then there you have a pocket tool. It looks like your classic Swiss Army knife, in a sense, but it's just a pocket tool with a whole bunch of different things within the pocket tool, knives and nail cutters and the like. And the court held that that, too, is functional because consumers see these products and these products are designed to achieve functional results. And when you run that four-factor test we talked about, the court said those are functional and they meet functionality standards.
The second element, as you remember now, is inherently distinctive or secondary meaning. And again, trade dress is protected if it's inherently distinctive or has acquired secondary meaning. Now, let's unpackage this a little bit. What does inherently distinctive mean? Well, inherently distinctive refers to the standard trademark test where marks are classified by courts and lawyers as being generic all the way up to fanciful. And you see our five here listed and those five are listed in that order because that's the spectrum that you can think about.
On one end of the spectrum is generic, on the other end is fanciful. And in between, we have other categories. We have descriptive, suggestive, arbitrary and, fundamentally then, fanciful. Now, the last three are always inherently distinctive because they act to identify a particular source or product. So if the trade market issue is suggestive, arbitrary, or fanciful, then courts say it's inherently distinctive as a matter of law and you're good.
Now, if you're in the first camp, generic, generic is not capable of being a trademark because it really refers to the genus of which the product or service at issue is the species. And so generic marks are never susceptible to any trademark protection. They can't be inherently distinctive. For example, if the name of my law firm was Intellectual Property Law and I wanted to get a trademark on Intellectual Property Law so that every other person who put out their name and said, "We do intellectual property law," so that I could stop them, for example, I wouldn't be able to do it because intellectual property law is simply generic.
Descriptive is a middle category between generic and suggestive. And descriptive means and refers to those marks that are not inherently distinctive, but they can become inherently distinctive if secondary meaning is attached to it. And we're going to talk about secondary meaning in the next slide in a couple minutes, but what this basically means is that, through extensive use over time, something that's descriptive can acquire trademark rights because, even though it's descriptive, consumers have come to identify that descriptive mark with a source.
Now, remember, if the trade dress is product design, it can only be protected if that, for example, descriptive product design has acquired secondary meaning because it simply can never be inherently distinctive. And here's the rationale. I'll quote it to you from the Supreme Court, just so you can keep it in your mind about why there's this concern about inherently distinctive and the need for secondary meaning.
The US Supreme Court has said that, "Competition is deterred, fundamentally, not simply by a successful lawsuit, but by even the plausible threat of a successful lawsuit. And so, given the unlikelihood of inherently source-identifying design, the game of allowing suit based upon alleged inherent distinctiveness seems to us not worth the candle." And that's a quote from Justice Scalia's opinion. "That is especially so since the producer can ordinarily obtain protection for design that is inherently source-identifying, if it exists, but does not yet have secondary meaning by going out and getting a design patent or a copyright on it."
And so the availability of these other protections in the law, other areas of IP law, that is, greatly reduces any harm to the producer that could follow from the court's conclusion that product design simply can't be protected, unless they can show secondary meaning.
Now, let's look at what secondary meaning means. Secondary meaning refers to proof that this non-inherently distinctive trade dress has become distinctive, as applied to the applicant's goods or services in commerce. And the rationale for this is that a term that's descriptive may, by use over time by one producer, with reference to his or her product, it may acquire a special significance so that the consuming public, in the consuming public's mind, that word has come to mean or that product design, for example, has come to mean that the product is produced by that particular manufacturer.
The crux of the secondary meaning doctrine is that the mark comes to identify not only the goods, but the source of those goods. To establish secondary meaning, it must be shown that the primary significance of the trademark, the term or, if we're talking about trade dress, product design, the primary significance of that design in the minds of the consuming public is not the product, but the producer.
And that's a really important distinction to keep in mind in that, in order to function as a trademark and have secondary meaning, it has to identify not the product, itself, but the producer. And this is a distinction that can easily be lost because you look at something that's really cool looking, for example, and you go, "Oh, wow. That's a cool looking watch," but does that mean that it identifies a cool looking watch, as in the watch, or does it identify that it refers to Apple because it's an Apple Watch or to Rolex because it's a Rolex watch? That's the fundamental question that courts grapple with.
And in order to unpackage whether there's proof of secondary meaning, you can see these six factors on the next slide that courts are going to look at, in terms of getting to the bottom of this. And the first factor is whether the people who purchase the product or service at issue that bears a claim trademark associated with it, whether that trademark associates the trademark with the owner, assignee, or licensee. So do people associate it with it? The second factor is to what degree and in what manner the owner of the mark has advertised used the claim trademark. Is it being used as a trademark in advertising, in other words?
The third factor is whether the owner or the assignee or the licensee of the trademark has successfully used this trademark, trade dress, to increase the sales of its product service. The fourth factor is the length of time and the manner in which this trademark has been used. Has it been used, for example, for 25 years in a particular way in advertising or has it only been used for a few months in 10 different ways? The fifth factor is whether the use of this has been exclusive. And the greater the exclusivity, the greater the likelihood of secondary meaning, of course.
And then the final factor courts look at to figure out if there's secondary meaning is to look to, why did the defendant copy this trade dress, this design, product design or product packaging or this trademark? If they intentionally copied it, courts feel that tends to indicate that there's secondary meaning because the alleged infringer has seen value in appropriating the trademark because they figure they can confuse consumers and divert sales to them. And that's indicative of secondary meaning, in the courts' minds.
So let's take a look here at an example. You can see here a picture of the Dallas Cowboys cheerleaders outfit. And this is an example of a case where product design or packaging these sort of descriptive marks have been found to have secondary meaning. And here, we're talking about the Dallas Cowboys cheerleader costume. And the case is reported at 467 Federal Supplement, page 366. It comes out of the Southern District of New York in 1979. And it involved a case where an adult pornographic film, an adult film, used in the film the cheerleader costume of the Dallas Cowboys cheerleaders and that was sort of a central part of the adult pornographic film.
And the Dallas Cowboys cheerleaders were obviously unhappy about this and they sued the Pussycat Cinema, and that's the plaintiff and defendant in the case in the Southern District of New York, and they sought an injunction. And the injunction was sought on the basis that the cheerleader costume, the white shorts, the belt, the vest with the blue collars and the stars, and the color combination, the stars, the look and the feel, the vest and the little shorts, all of that functioned as look and feel that was source identifying, that when you see that costume, you think Dallas Cowboys cheerleaders.
And the district court, it turned out, agreed and held that it had acquired secondary meaning as a trademark and the defendants were, therefore, enjoined from continuing to show the film and the film was brought to an end, in essence, because they had appropriated the Dallas Cowboys cheerleaders' costumes and had essentially created a situation where it was denoting source identification, as if somehow this brand had approved of or endorsed or was involved in or had licensed, for example, their trademark to be in a pornographic movie, which they hadn't. And so that's a good example of a published opinion where descriptive marks have been found to have secondary meaning.
Let's go to the next slide before we start getting into our car battles. And we're now looking at the third and final element when we're talking about a Lanham Act trade dress or trademark infringement claim. And the third element is likelihood of confusion. And likelihood of confusion, it's the same basic test across all the circuits in America. The Ninth Circuit test is called the Sleekcraft Test. And you can see down there the case cite, AMF versus Sleekcraft Boats. It's from 1979.
But all the courts basically look at these seven factors or eight factors, sorry, to figure out if there has been or there will be a likelihood of confusion. And some courts use more factors, some use less. There are other factors that may be used in the internet context, but they're all variants of these factors and that is, what is the strength of the mark? And that brings us, remember, to is it descriptive or is it fanciful? Is it completely random and arbitrary?
The proximity of the goods or services, the similarity of the marks at issue, evidence of actual confusion, i.e are the consumer in the public actually confused between the two brands? Are the marketing channels used the same or are they completely different? The types of goods or services and the degree of care likely to be exercised by the purchasers of the defendant's product.
And what that means then is, if you're at the checkout stand in a grocery store where chewing gum is 59 cents, the consuming public isn't likely to use a great degree of care when just picking up that pack of chewing gum. And so if there's a ripoff going on by a brand stealing the Wrigley's look and feel and logo, a consumer is likely to miss it. But if it's a Gucci bag, for example, with a Gucci logo that costs $5,000 or whatever the bags cost, consumers are going to exercise a little more care and are less likely to be confused. And that's how that factor works. And then, finally, the likelihood of expansion of the product lines.
Now, that then gets us past the overview of trademark law, trade dress law, and let's get into our first auto trademark battle. And this is going to bring us to General Motors and this case involves the famous Hummer. And it's General Motors versus Let's Make a Deal. It's reported at 223 F. Supp 2D 1183. It comes out of the District of Nevada in 2002. And Let's Make a Deal was a used car lot in Reno, Nevada. And this used car lot in Reno, Nevada had decided that it was going to make a bunch of car kits that would make cars look like Hummers and it would then sell them for a lot less than a Hummer, obviously.
Now, General Motors had actually registered with the Patent Trademark Office their product design trade dress in the nose and grill design. And you can see the picture there, that iconic nose grill design and the shape, the number of oval-type shapes there, the length of it, all of that was actually registered and the Trademark Office gave them a registered trademark on that design. Now, the defendant ends up getting sued by General Motors, who puts before the court that it had spent, really, hundreds of millions of dollars marketing its trade dress and all of its grill designs for decades. And General Motors wanted a preliminary injunction.
And the first question then, as you remember, on the next slide you can see here, is this functional question. And the question is, well, is that nose grill functional or not? Because if the nose grill is functional, then it can't really be a trademark.
Now, the court held it was not functional. Although some aspects of it could serve a function, such as the openings, the holes in other words, to allow air to go into the engine to cool the engine, the overall look and feel was not functional because you can do grills in thousands, millions, myriad different ways of doing it to allow air to come in. So there was nothing functional about that particular layout of a grill that would put anyone at a competitive disadvantage. You can make your grill any other way and you can still sell your car.
On secondary meaning, the court held that the grill and the nose was product design with secondary meaning, that consumers associated that look and feel with Hummer and the defendant copied it intentionally. And by the way, that doesn't even require the word Hummer to be there. Obviously, having the word Hummer associates it with Hummer, but a defendant's product didn't have to say Hummer for it to be infringing. The shape, itself, was infringing. And so that's the first case. Let's Make a Deal lost in litigation and they probably, having lost the PI, were forced to make a really good deal with GM to get out of the case, one would think.
Let's keep moving and we're going to stay on our domestic shores for this one. And this case is going to bring us to the Chrysler Corp. And here, you have Chrysler Corp suing a guy named Silva. This is a first circuit case from 1997. It's reported at 118 F3 56. And here, Chrysler sues the defendant, claiming that the defendant was copying the innovative muscle car from Chrysler. And you can see there the two cars. And they look really similar, but they don't look identical. The bottom car is the classic Chrysler Viper car that Chrysler showed it had spent $80 million to bring it to production.
And the defendant built a car that they called it the Mongoose. And the Mongoose was a chassis, really. It's a car that could sit on an ... or not a chassis, sorry, it was the housing of a car that could sit on an existing Corvette chassis so that someone could go buy a Corvette that's a lot cheaper than a Viper, maybe an old beat up Corvette, remove the auto housing from it, and then you would mount on the chassis of the car this Mongoose car. And it was not a carbon copy, but it certainly had large echos of the Viper as a basis for its designs.
And so let's see here, on this slide, what the district court said. The district court said that the Viper had secondary meaning and also that it was not functional. I mean, there's millions of ways to make a car and there was nothing functional about the particular layout and shape of the Chrysler Viper. And it also found secondary meaning that the consuming public associated that overall look and feel, layout, design of the Viper with Chrysler, but the district court held no infringement by Silva because there was no likelihood of confusion.
And if you remember our likelihood of confusion factor from a couple slides back, what the court here said is that there was no bad intent and there was no actual consumer confusion because consumers knew that this was not a Viper. They weren't buying it as a Viper, they were buying it as a very cheap car that was cool looking and had echoes of a Viper, but no one thought they were buying a Viper. And that went to the degree of sophistication of consumers in buying it. And the court also found that there was no bad intent. He wasn't trying to trade off of the Chrysler look and feel.
But as in all cases, there was an appeal. And as you see at the top, we're going to the First Circuit. You knew that. So let's see what happened when this case went up to the First Circuit Court of Appeals. Well, unfortunately for Mr. Silva, the First Circuit reversed and the First Circuit held that there was massive evidence of post-sale confusion and that Chrysler had introduced a lot of evidence that the Viper had added to Chrysler's reputation, independent of sales.
And when infringers come along and they have a car that's a bit of a knock-off and then that car does a poor job mechanically, that then can introduce detraction and damage. Those differences may well damage the brand of Chrysler to the extent it's being associated with Chrysler. And so a new trial was ordered because the First Circuit felt that there could be a likelihood of confusion if a full analysis was done. And so it was that the Mongoose walked off into history, the way of the dodo bird, and there we have it, two for the US auto industry. Since you cannot buy a Mongoose today, it's safe to say they settled and recognized that they would probably lose the battle if they went the distance.
Now, having had two rounds for the US auto industry, let's shift to the continent. And here, we're going to look at Bentley Motors versus McEntegart. And this is reported at 899 F. Supp 2D 1291. It comes out of the Middle District of Florida in 2012. And this case involves Bentley alleging that the defendants were unlawfully manufacturing Bentley body kits that were able to transform ordinary and inexpensive Chrysler Sebrings or Ford Mustangs into knock-off Bentley vehicles by intentionally misappropriating the overall appearance and shape, the look and feel of the Grand Touring Bentley automobile. And there, you have a picture of Bentley.
And on the next slide, you can see the picture of Bentley and the converted Chrysler. And so you can look for yourself and see the similarities and the differences and judge for yourself. I'll tell you, funny to me, they both do look similar to me, but I kind of think the Chrysler looks cooler. And since it's probably 10%, what a deal. Well, Bentley, of course, didn't find it to be funny and they sued.
Now, the defendant, as you can see here in these bullet points, the defendant claimed it was simply his own imagination and he never copied the Bentley. And he pointed to a number of material differences between the two. He also pointed to the fact that it was never advertised or passed off as a Bentley knock-off replica kit. There was nothing in the advertising that said, "Similar to Bentley," or, "Only a fraction of the price of a Bentley," but the court, nonetheless, held that this was non-functional, ornamental look and feel of the car, it had secondary meaning, and consumers were confused.
And here's a good evidence pointer to think about, again, when you're in these cases on either side. If you're going to be plaintiff or defendant, you want to think about internet evidence and what's out there. It's not just going to the Wayback Machine to see how people advertise, but you want to look at what's going on in auto chat rooms where people are talking about cars and is there evidence in there about chat rooms, social media, where people are talking about the similarities, the differences, and whether they think they're the same.
But in any event, this one is a loss. Bentley wins because it was non-functional look and feel, it had secondary meaning, and consumers were likely to be confused. And so here, you have again this idea that what's being protected here is the look and feel of the car. Even though it's very expensive and consumers know they're not buying a Bentley, it is too evocative of a Bentley such that it creates confusion. Other people driving along, for example, like in the Chrysler case that got sent back, may see a car that's starting to look beat up and rundown and it's just looking junky, but it kind of looks like a Bentley, and that damages the Bentley brand. And that's what courts have been protecting.
Now, let's get to Ford and Ferrari. And there, you see a picture of the classic Ford Cobra and the classic Ferrari Testarossa. And what we're going to do here is we're really going to square off with these two cars and we're going to figure out, do they each get trade dress protection under American law or does only one of them? Who's going to win, if it's only one of them? Is it America or is it Europe?
So here, we have the Ferrari Testarossa case at 944 F 2D 1235. It comes out of the Sixth Circuit in 1991, is when it was reported at the [inaudible 00:41:26], of course. And here are the basic facts; Ferrari began producing a car called the Testarossa in 1984. And there, you have a picture of it, so you can understand the look and the feel of the car to understand what's at issue, if you're not familiar with the Ferrari Testarossa. If you've ever watched Miami Vice and you were a kid of the '80s, like me, you certainly know what a Ferrari Testarossa looks like. And that's my plug for Miami Vice.
So Ferrari, in any event, began producing approximately 5,000 of these Testarossas by 1991. And production was intentionally limited so that the exclusivity of the car could be preserved. And the entire anticipated production was sold out several years ahead and there was a waiting time, substantial waiting time, in order to even buy a Testarossa from Ferrari, about five years. And so, as a result, a new Testarossa sold for approximately $230,000. And that's in the late 19803. I mean, it's a staggering sum of money for a car, even staggering today, if you ask me. But in any event, there we have the Ferrari Testarossa.
Now, in the defendant, made a fiberglass kit car and called it the Miami Spyder, spelt with a Y. And I don't know why it doesn't say in the opinion it was Miami, although the defendant was there, but it probably had something to do with plugging into the Miami Vice show, which had popularized the Testarossa, I think, substantially in the '80s.
But in any event, this Miami Spyder was a one-piece body shell molded from reinforced fiberglass that you could simply bolt onto the undercarriage of another car, such as a Chevy Corvette or a Pontiac Fiero. And those are what are known as donor cars, basically. And it was 8,500 bucks to buy and, boom, you have a pretty cool looking convertible Testarossa there, if you ask me. It was virtually identical.
Now, the two pictures so you can compare because it's really important, when you're talking about product design and packaging in the trademark realm, the only way to understand this stuff is, fundamentally, at the end of the day, to look at it and compare to understand the similarities, the differences in terms of shape, look, style, angle so that these things can be quantified, ultimately, with your experts and with a jury, ultimately, when you go before a jury. And there you have the two. Both beautiful looking cars, I think.
So let's look at the first factor and what the circuit court said. This is functionality. And here on functionality, Ferrari put on testimony from its chief designer, a man named Angelo Bellei. And he had developed Ferrari's Grand Touring cars and he testified that the company chose exterior designs fundamentally for beauty and distinctiveness, not for utility. In other words, that they designed them to make something look beautiful, aesthetically appealing, distinctive, unique, ornamentally and visually appealing.
And even though the scoops, for example, to get the air out may have some function or utility, that wasn't the rationale or reason for designing them. And that testimony caused the district court to hold that the design of the Ferrari Testarossa was non-functional. And by the same token, they found the features ... This was un-controverted testimony from this person.
And so what's important here to understand, and this is a really important practice pointer and it's critical from an evidence perspective, if you are on the side of the plaintiff alleging trade dress, you want to make sure you understand what your witnesses are going to say and you prepare them heavily because ... Here's a tip from my cases. I've been on both sides of auto trade dress cases, both sides of functionality, where I've been a defendant arguing the plaintiff's is functional and I've been a plaintiff arguing it's non-functional.
And it's very, very important to get your arms around what your witnesses are going to say and to prepare them properly in deposition so that they understand this difference between ornamental, aesthetically pleasing, and functional and what is driving design choices. Ill-prepared witnesses can very easily be tripped up and be tripped into giving testimony that sounds like and creates functional soundbites. And that can really damage your case if, for example, you're on the plaintiff side or it can help your case if you're on the defendant's side.
On the second factor, secondary meaning, the defendant in this case had admitted to copying the design in a sting operation. And so here's a quote from what came out in this secret recording sting operation. "We put this whole body right on it and it looks just like a real car. I mean, they can't tell by looking. We build and sell the same car, reproduce it." Now, obviously, horrendously damaging testimony that the Ferrari undercover investigators were able to get when they went in with their wires and whatnot.
And that shows that bad faith that we're talking about, that even from the perspective of the defendant, consumers couldn't tell the difference and that they were reproducing the Ferrari Testarossa. So that's a perfect example of the damage that can come by someone who's knocking someone off and then is out there advertising and talking about it in those terms. That is a boomerang that comes back to haunt you.
We also had from Ferrari, in this case, survey evidence that they had done with an expert where they had shown photographs of Ferrari's cars. They had no identifying badges on the car and 82% of respondents identified the Testarossa as a Ferrari product. And the court then held that it was valid trade dress with acquired secondary meaning.
And this is a really important point, in terms of the survey evidence, and this is a critical point to keep in mind all the time. Ferrari's vehicles would not acquire secondary meaning simply because they're unique designs or because they're aesthetically beautiful. The sheer fact that the designer testified that, "I make it to look beautiful, like a beautiful sculpture, a beautiful piece of art. They're just beautiful things to look at," that is not enough. The design has to be one that is instantly identified in the mind of the informed viewer as a Ferrari design.
So in other words, it can't just be a beautiful thing, it has to be a beautiful thing that people associate with Ferrari. And so the district court here found, which the Sixth Circuit had agreed with, that the shape of the Ferrari vehicles were trademarks or trade dress because they weren't simply attractive designs, but they were actually understood as distinctively Ferrari creations and designs.
So when you look at the factors, and you can see our likelihood of confusion factors here, the court then goes to the eight factors. And here's how the court found the factors went, in terms of which factor went for which party. On the strength of the mark, the court found it went for Ferrari. The Ferrari look and feel, the aesthetic, design of this Testarossa body shape that had become associated in consumers' minds with Ferrari was completely arbitrary. I mean, there's a billion ways, probably, to design a car. And so it was a very, very strong trademark, in that sense, on the end of our spectrum, if you remember our spectrum from earlier, and that favored Ferrari.
The relatedness of the goods, well, that favored Ferrari also because they were both selling fancy, cool looking red sports cars for people who want to drive fancy looking sports cars, same basic good in the same basic space. The similarity of the marks, that also favored Ferrari because the cars looked so similar. Actual confusion, there was no evidence of an actual confusion, actually. In other words, there was no evidence that someone bought a Spyder and thought they had bought a Ferrari Testarossa. And so that factor was either neutral or favored the defendant because no one was really, at root, fundamentally confused. People buying it know they're getting a knock-off. They don't think they're buying the Ferrari brand.
The marketing channels used, well, that factor actually was held to favor the defendant. The nature and manner of how Ferrari advertises and where it advertises, the very high-end magazines or catalogs or whatnot, is not where this defendant was marketing and advertising the Miami Spyder. The degree of purchaser care, that also actually favored the defendant. These are expensive cars. Even if it's only an $8,000 kit compared to a $240,000 car, it's still a lot of money. People don't just buy it like chewing gum at the checkout stand. And so that favored the defendant.
The intent in selecting the mark, well, that favored Ferrari. You saw that testimony. He actually went for it, wanting to look like a Ferrari. Likelihood of expansion, i.e, would they expand the product lines into other spaces? There was no evidence of that and it wasn't an issue. And so that was really an irrelevant factor.
So as you can see here, Ferrari, four of the seven factors at issue favored Ferrari, three favored the defendant. It's not simply a counting exercise where you count up who's got the most and it's four/three, Ferrari wins. That's not how these cases are done. It's a balancing test because very, very strong marks with high mal intent and relatedness can be even to carry the day, even on the rest. And so here it was that it carried the day.
But when I say it carried the day, let's look at the next slide because here we have a dissent. I respectfully dissent because the majority opinion does more than protect consumers against a likelihood of confusion as to the source of goods. It protects the source of the goods, Ferrari, against plaintiff's copying of its design, even if the replication is accompanied by adequate labeling so as to prevent consumer confusion. The product of these errors is a remedy that provides defendant with absolute protection and perpetuity against copying its unpatented design.
So what you can see here is this fault line in the law. And it's really, really important what the dissent is saying here because this fault line in the law is what you, as a practitioner, need to know in terms of whether you're on the plaintiff or the defendant side as to what you want to be arguing. And what the dissent here is focusing in on is the fact that the Lanham Act, trademark laws are supposed to protect the consuming public against being deceived. They're not designed to protect some company in giving it a perpetual monopoly on something.
And so this idea that the Lanham Act is more consumer-oriented than it is company/brand-oriented is what was animating the dissent. And the majority, of course, in this case, felt that, no, this is about protecting Ferrari and its brand, but the dissent said the Lanham Act is really about protecting consumers. And if at root they're not confused, what we are now doing is something improper. What we are giving Ferrari is a permanent patent, in other words, on this Testarossa body shape when, if it wanted a design patent, it could've got one, but it would've lasted 20 years and then anyone could make a Ferrari Testarossa.
And so that is a very critical animating line in the law. And when we're litigating these cases, that's a sort of fault line that you want to be litigating over. And fundamentally, if your cases are ultimately going before a jury, these are where the arguments are being crystallized with your experts and with your jury work, in terms of arguing to the jury what should matter more. Well, Ferrari won, though, because it was just a dissent.
Having said that and having posed the question earlier, you now know what happens because I told you there's one winner, there's one loser, and we saw Ferrari won. So we know, believe it or not, Ford Cobra loses. And it's a little different to the movie. If you've seen the Ford Versus Ferrari movie, you know Ford won that one.
So here, we have District of Massachusetts case in 2002. And this is the famous Carroll Shelby Cobra that he started designing in the 1960s. Ford has registered many of the Cobra marks in its marketing materials, but by the late 1970s, there were dozens and dozens of companies that were advertising, manufacturing, and selling replica cars. And one such car began selling this chassis now in the '90s. And so these cars have been sold by all sorts of replicas for decades and this is part of what comes back to haunt Cobra and/or Ford. And they often even had the Cobra emblem and badges on them.
Well, by the mid 1990s, after 30-odd years of this, a quarter century of this, Shelby and Ford were all frustrated and so they sued as co-plaintiffs. And there, you can see a picture of the original and the replica. And it's important to see the picture to recognize they're literally identical. Right? This isn't a case of being a little evocative. It's just smack dab knock-off.
Well, the court found that, look, I mean, the design is non-functional. Like a Ferrari, it's aesthetic in design and the court was willing to say it's non-functional and protect it, but this is where Shelby and Ford got hung up. It was on secondary meaning. And the central question in secondary meaning is, who is the source of the design? And the court found this to be a very, very unique case because the design was Carroll Shelby. He was a designer of the car. And Ford was not the designer. Ford was the producer.
And this distinction between designer and producer and the fact that those lines had been blurred for years, Ford was making it and doing something about advertising and selling it, but Shelby was also promoting it as a Shelby Cobra car, meant that there could be no protection under trade dress principles for the designers, themselves, because they weren't taking a role in the marketplace. And so they're not affecting competition and consumer choice. They're just backend designers. And design patents and copyrights are where they need to go because you cannot fulfill this initial source requirement of the secondary meaning in the inquiry.
And so, as you can see, with respect to survey evidence here, that the court said, "Even if Shelby was able to prove that he was the source of the Cobra, i.e, the producer, that people associated it with Shelby, any single source that is, he still failed in that case to give any evidence that consumers associated the design with Shelby and Shelby, alone."
And here's what was fascinating because it's an example, really, of where expert work can go south on you if the experts just can't put together a case in the right way. And so Shelby had submitted some survey evidence to the district court and it was compiled by a statistician at PricewaterhouseCoopers who did face-to-face interviews with sports car hobbyists at an industry trade show.
And here's what the court said; "Although the survey shows an association between Cobra and Shelby, that's insufficient to support a reasonable jury finding in Shelby's favor on the issue of secondary meaning." Rather, Shelby had to prove that the primary significance of the Cobra shape in the minds of consumers was Shelby as the single producer. What that means is part of what had happened over time is that the shape of that car was no longer associated with a single producer. It was just known to be originally by Shelby and/or Ford and then by a whole bunch of other cars that had been making it.
And what the court also noted was that one of the most troubling aspects of the report was the grouping of responses. And here's some really interesting Q&A. And this is kind of a practice pointer when you're in expert work to really think about this stuff. When the recipients were asked if they recognized the picture of a Cobra design, over 50% of the people surveyed associated the picture with Shelby.
Now, within that percentage of people, there were a bunch of different responses. Some said Cobra, some said Shelby Cobra, some said Ford cobra, some said Ford Shelby Cobra. And because they had grouped all those responses into the, quote unquote, Shelby category, the expert was actually assuming the answer to the very question being posed. At root, what the court said, this is [inaudible 00:57:19] science. The conclusions were illogical because, in a very basic sense, they were tying to Shelby, but they were completely unreliable and had no, really, weight whatsoever when it comes to secondary meaning. And so, as a result, Cobra lost, Ferrari wins, and that is our trade dress battle between Ferrari and Cobra.
Let's do a couple quick pit stops before we wrap up here. The first is going to be with Porsche and Polish. And so here, you have a picture from a magazine ad in 1997 and it's a polishing company ad taken out in Motor Trend Magazine. This is May, 1997, and it shows, as you can see there, a red Porsche [911 00:58:01] and it's got a provocatively-dressed young woman putting the Liquid Glass car polish on a car. And you can see there, prominently displayed in the photograph, is Porsche, the trademark and the logo and the design and look and feel of a 911.
And Porsche was not happy about this because they felt that it's one thing to advertise your polish as doing a really good job making a car shiny and look good, but it's another thing to basically use a Porsche as a prop to sell your polish, as if somehow this is Porsche-sponsored or approved polish to make your polish perceived as being a better-quality-brand polish.
And so what the court held here, and this is the District of New Jersey in 1998, was that the reason Liquid Glass chose to use a Porsche instead of any other car was they wanted to display the trademark Porsche and the look of the car. And that, in the court's opinion, was not because it needed a prop, but because Liquid Glass wanted to use Porsche's reputation and strength and persuade consumers that Liquid Glass produces high-quality products. Stated somewhat different, "Liquid Glass wants to cash in on the goodwill that Porsche had worked hard to create and maintain by aligning itself with Porsche."
And so that's a great example of trademark misuse in the auto space by a secondary type of product company, polish, as applied to Porsche. And so the ads went the way of the dodo bird, too, and advise your clients not to do that type of thing if they're advertising a product.
Now, pit stop two before we wrap up here, Lamborghini versus the Las Vegas Restaurateur. And so there, you see the famous Lamborghini trademark and it's that oval-ish or triangle/oval-shaped badge that says Lamborghini in bold letters across the top and it's got a bull. And then here, you have a Las Vegas Restaurateur who opens a restaurant called Dal Toro. And there's a bull in the middle of the same shape and capital letters across the top, but it was an Italian restaurant.
Now, the Italian restaurant was a little more than just selling just food because, inside it, there was apparel and accessories with imitation Lamborghini logos on them like that. And it was done without permission of Lamborghini. And even inside the restaurant, there were also exotic cars displayed throughout. And so the whole thing had the look and feel of an auto-inspired place.
Lamborghini wasn't happy. Lamborghini sued and, very quickly, there was an out-of-court settlement that was filed with the court shortly after the lawsuit was filed. And under the terms of the settlement, this is all publicly available, Dal Toro agreed not to use the trademark or any confusingly similar marks at all anymore. And so the company also agreed to an injunction against creating any bull-and-shield logos with the Dal Toro name on it on apparel or other promotional items.
And so there's an example of, really, the strength of the Lamborghini trademark, in terms of the shape, the lettering, the bull, and these people using the same thing in a way that was very evocative of Lamborghini, even down to the colors, and being shut down for doing it.
And so that's our program for today. Our brief conclusions are that trade dress is a really important remedy to protect non-patented, non-functional product packaging designs and look and feel. And if your clients have that, maybe they didn't get a patent in time because it's been out for awhile on the market, well, they can get protection in the trade dress laws. You will want ... Confusion-related evidence is critical, so keep records on what consumers are saying in social media. Go look at the Wayback Machine to find the evidence.
The other practice pointer in the critical conclusion in this program is that expert evidence is critical. We saw it in all the cases and it can make and break a case. It made the case in Ferrari and that's why I spent a lot of time talking to you about what the experts showed, but it can also break a case, as we saw in Ford. So experts are critical to work with and work well with.
Now, it's almost impossible, as a root conclusion when it comes to car designs, it's almost impossible to copy a car design and win, but as you saw between the Ford Cobra case and the Ferrari dissent, it's also clear that jurists don't see it as a slam dunk in all areas. So know these fault lines because, if you're dealing with very, very expensive products, cars, or maybe other products that are very, very expensive where there's great consumer discernment and absolutely no consumer confusion, they are important fault lines to fight over and they're fault lines that can be fought over and won.
That is our conclusion today. I hope you've enjoyed this program. Stay in touch for more programs being brought to you.