General Motors Corp. v. Urban Gorilla, LLC

• Decision Date: 12 September 2007
• Docket Number: No. 06-4128.,06-4128.
• Parties: GENERAL MOTORS CORPORATION, a Delaware corporation, Plaintiff-Appellant, v. URBAN GORILLA, LLC, a Utah limited liability company, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

500 F.3d 1222

GENERAL MOTORS CORPORATION, a Delaware corporation, Plaintiff-Appellant, v. URBAN GORILLA, LLC, a Utah limited liability company, Defendant-Appellee.

No. 06-4128.

United States Court of Appeals, Tenth Circuit.

September 12, 2007.

Thomas R. Lee (Gregory D. Phillips, Scott R. Ryther with him on the briefs), Howard, Philips & Andersen, Salt Lake City, UT, for the Plaintiff-Appellant.

Peter H. Barlow, Strong & Hanni, Salt Lake City, UT, (Erik E. Child, Beyer, Pongratz & Rosen, Sacramento, CA, with him on the briefs) for the Defendant-Appellee.

Before LUCERO, MURPHY, Circuit Judges, and ROBINSON, U.S. District Court Judge.^*

LUCERO, Circuit Judge.

General Motors Corporation ("GM") appeals from the district court's denial of a motion for preliminary injunction against Urban Gorilla, LLC ("Urban Gorilla"). GM alleges that Urban Gorilla's "body kits" infringe upon and dilute GM's trade dress rights in its Hummer line of vehicles. Because the district court did not abuse its discretion in finding that GM failed to make a strong showing of a likelihood of success on the merits, we AFFIRM.

I

Weighing in at 1.25 tons and able to cross a variety of rough terrain, the military Humvee gained national attention during Operation Desert Storm in 1991. At the urging of then-actor and now Governor Arnold Schwarzenegger, Humvee's manufacturer, AM General Corporation ("AM General") created a civilian version of the vehicle, called the Hummer. In 1999, GM purchased the trademark rights to the Hummer from AM General, and it now markets three versions of the Hummer under the GM brand name: the H1, H2, and H3. GM has a registered trademark in the distinctive shape and design of the H1, the Hummer nose and grill area, the word "Hummer," and the slogan "Like Nothing Else." The H1 retails for around $140,000, and the other models cost less. Since 2000, GM has spent tens of millions of dollars advertising the Hummer line as luxury sport utility vehicles geared toward high-income purchasers.

In 1997, Active Power, Inc. ("Active Power"), the predecessor in interest to defendant Urban Gorilla, launched the Urban Gorilla product line, which consists of steel "body kits." These kits allow customers to install a new body on top of an existing truck chassis, at a price of around $10,000. According to Urban Gorilla, the kits are designed to make a truck look like a military-style vehicle. Urban Gorilla's kits have been advertised in magazines and on the internet since 1997, and one kit was featured on a television show called "Xtreme 4x4" in 2005.

On October 6, 1998, AM General sent a cease and desist letter to Active Power, suggesting that the design of the Urban Gorilla kits infringed on AM General's Hummer trademarks. In response to that letter, Active Power agreed to make changes to the Urban Gorilla product design, but despite AM General's request to review these changes, Active Power never sent them to AM General. AM General did not pursue the matter further, and as noted supra, it sold its interest in the Hummer line to GM the following year. In February 2004, Merrick Maxfield purchased the Urban Gorilla product line from Active Power. He is now president of Urban Gorilla, which continues to produce and market the body kits.

On February 13, 2006, GM filed a complaint against Urban Gorilla for, among other things, trade dress infringement and dilution in violation of the Lanham Act, 15 U.S.C. § 1125(a), (c), and moved for a preliminary injunction.¹ In its complaint, GM alleges that the Urban Gorilla design is a "knock off" of the Hummer, and points to several examples of explicit, public comparisons between the two products.

In 2005, the Urban Gorilla website was changed to include customer testimonials comparing the Urban Gorilla to the Hummer. One customer quoted on the site bragged that at the All Truck Nationals Show, he entered his Urban Gorilla kit truck into a competition against "$125,000 custom Hummers" and won first place. The kit he used was featured elsewhere on the website, with a caption stating that it had recently won first place in a national truck competition against custom Hummer H1s, and claiming "[i]t gives you the look and performance you are looking for." In addition, the site included the slogan, "When Nothing Else Will Do," which GM alleges is similar to the trademarked Hummer slogan, "Like Nothing Else." Although GM concedes that these elements have been removed from the website, it asserts that the testimonials and slogan still appear in an Urban Gorilla catalog. In addition to Urban Gorilla's own promotional materials, GM offered into evidence a November 10, 2005 article from Canada's National Post entitled "Kit will turn your Chevy pickup into a Hummer— on the cheap." The article begins, "Just because you don't own a Hummer doesn't mean you can't drive around looking like you do. Urban Gorilla's 4x4 off-road body kits cost a fraction of the price and offer a full range of steel bodies that'll make your standard Chevy pickup truck look like 100 grand."

Urban Gorilla responded to GM's complaint and motion for preliminary injunction by pointing out numerous differences in the designs of the products; raising the defenses of laches, acquiescence, and estoppel based on its correspondence with GM's predecessor in interest, AM General; and presenting evidence that its small business would close if an injunction were to issue. After conducting a hearing on GM's motion, the district court declined to issue a preliminary injunction, finding that there was insufficient evidence to justify GM's request for emergency relief "with particular emphasis on the question of likelihood," but allowing discovery to continue in the case. GM subsequently moved for an injunction pending appeal in both the district court and this court, and both motions were denied. GM now appeals from the district court's initial denial of the motion for preliminary injunction.

II

Pursuant to 28 U.S.C. § 1292(a), we have jurisdiction over appeals from interlocutory orders refusing to grant injunctions. We review a district court's denial of a preliminary injunction under an abuse of discretion standard. Wyandotte Nation v. Sebelius, 443 F.3d 1247, 1252 (10th Cir.2006). "A district court abuses its discretion when it commits an error of law or makes clearly erroneous factual findings." Id. Our review of the district court's exercise of discretion is "narrow," Hartford House, Ltd. v. Hallmark Cards, Inc., 846 F.2d 1268, 1271 (10th Cir.1988), and "the merits . . . may be considered on appeal only insofar as they bear on the issue of judicial discretion." Otero Sav. & Loan Ass'n v. Fed. Reserve Bank, 665 F.2d 275, 276-77 (10th Cir.1981).

To obtain a preliminary injunction, the movant must show: (1) a substantial likelihood of success on the merits; (2) irreparable harm to the movant if the injunction is denied; (3) the threatened injury outweighs the harm that the preliminary injunction may cause the opposing party; and (4) the injunction, if issued, will not adversely affect the public interest. Greater Yellowstone Coal. v. Flowers, 321 F.3d 1250, 1255 (10th Cir.2003) (quotation and citation omitted). In general, "a preliminary injunction is an extraordinary remedy; it is the exception rather than the rule." GTE Corp. v. Williams, 731 F.2d 676, 678 (10th Cir.1984). Moreover, when a preliminary injunction would alter the status quo, such as the injunction at issue in this case, the movant bears a heightened burden and "must make a strong showing both with regard to the likelihood of success on the merits and with regard to the balance of harms." O Centro Espirita Beneficente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973, 976 (10th Cir.2004) (en banc, per curiam), aff'd, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006).

A

With respect to the first aspect of the preliminary injunction inquiry, GM argues that it is highly likely to succeed on the merits of its claims for trade dress infringement and dilution. Because GM seeks to alter the status quo by halting production of Urban Gorilla products, it must make a "strong showing" with respect to the likelihood of success on the merits. We conclude that the district court did not abuse its discretion in finding that GM failed to meet this burden, and consequently we do not reach Urban Gorilla's defenses.

Pursuant to the Lanham Act, a person may bring a federal cause of action for trade dress infringement. 15 U.S.C. § 1125(a); Hartford House, 846 F.2d at 1271. A product's trade dress "is its overall image and appearance, and may include features such as size, shape, color or color combinations, texture, graphics, and even particular sales techniques." Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964 977 (10th Cir.2002) (citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 764 n. 1, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992)). To establish a claim of trade dress infringement, a 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. Id.; 15 U.S.C. § 1125(a)(3).

GM claims that the design of the Hummer line of vehicles constitutes an inherently distinctive trade dress. Because Urban Gorilla does not contest this assertion on appeal, we will assume, without deciding, that GM could sufficiently demonstrate this factor at a trial on the merits.

In this circuit, likelihood of confusion is a question of fact, Sally Beauty, 304 F.3d at 972, which we review for clear error. Wyandotte, 443 F.3d at 1252. In determining whether a likelihood of confusion exists, we consider a variety of factors, including: (1) the degree of similarity between the products; (2) the intent of the alleged infringer in designing its product; (3) evidence of actual confusion; (4) similarity in how...