Ford Motor Co. v. Summit Motor Products, Inc.

• Decision Date: 13 May 1991
• Docket Number: 90-5348 and 90-5363,Nos. 90-5225,90-5256,s. 90-5225
• Citation: 930 F.2d 277
• Parties: 1991 Copr.L.Dec. P 26,717, 19 Fed.R.Serv.3d 907, RICO Bus.Disp.Guide 7731, 18 U.S.P.Q.2d 1417 FORD MOTOR COMPANY, Appellant and Cross-Appellee, v. SUMMIT MOTOR PRODUCTS, INC., a corporation; Alto Products Corporation, a corporation; Sanford Landa, an individual; Dorothy Landa, an individual; Tension Envelope Corporation; a corporation; Altran Corporation, a corporation; and Acme Corporation, Inc., a corporation Altran Corporation, Appellee and Cross-Appellant.
• Court: U.S. Court of Appeals — Third Circuit

Page 277

930 F.2d 277

1991 Copr.L.Dec. P 26,717, 19 Fed.R.Serv.3d 907,

RICO Bus.Disp.Guide 7731, 18 U.S.P.Q.2d 1417

FORD MOTOR COMPANY, Appellant and Cross-Appellee, v. SUMMIT MOTOR PRODUCTS, INC., a corporation; Alto Products Corporation, a corporation; Sanford Landa, an individual Dorothy Landa, an individual; Tension Envelope Corporation a corporation; Altran Corporation, a corporation; and Acme Corporation, Inc., a corporation Altran Corporation, Appellee and Cross-Appellant.

Nos. 90-5225, 90-5256, 90-5348 and 90-5363.

United States Court of Appeals Third Circuit.

Argued Jan. 10, 1991.

Decided April 8, 1991.

Rehearing and Rehearing In Banc

Denied May 13, 1991.

William J. Heller, Hannoch Weisman, Roseland, N.J., David C. Hilliard (argued), Charles R. Mandly, Jr., Diane G. Elder, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson, Chicago, Ill., for plaintiff-appellant-cross-appellee, Ford Motor Co.

Jonathan M. Hyman, Newark, N.J., David L. Harris (argued), Lowenstein, Sandler, Kohl, Fisher & Boylan, Roseland, N.J., for defendant-appellee-cross-appellant, Altran Corp.

Before COWEN, ALITO and GARTH, Circuit Judges.

OPINION OF THE COURT

COWEN, Circuit Judge.

Before us are four appeals arising out of an action initiated by Ford Motor Company ("Ford") against, inter alia, Altran Corporation ("Altran"), alleging copyright, trademark, and unfair competition violations, and an ensuing counterclaim filed by Altran against Ford for racketeering. Prior to trial, the district court dismissed Altran's counterclaim and denied a motion by Ford for Rule 11 sanctions, and thereafter, the jury returned a verdict for Altran on every Ford claim. Ford's motion for a new trial was subsequently denied. Altran has appealed the dismissal of its counterclaim, while Ford has appealed the district court's denial of its new trial motion and its Rule 11 motion. We find that the district court properly dismissed both Altran's claim against Ford and the related Rule 11 motion. However, we hold that the district court did not soundly exercise its discretion in denying Ford's motion for a new trial, and we will therefore vacate that order and instruct the district court to grant Ford a new trial on all of its claims.

I.

This case has its genesis in Ford's entry into the lucrative automobile repair and replacement parts market in the late 1950s. After unsatisfactory initial efforts to merchandise repair parts, Ford began to explore other marketing options. Believing that a good tradename was one key which might unlock the door to the repair parts market, Ford commenced negotiations with the Electric Autolite Company. Electric Autolite, a primary supplier of parts for Chrysler, was a major manufacturer of automobile repair parts. In 1961, an agreement was reached pursuant to which Ford purchased from Electric Autolite the "Autolite" tradename, an Ohio spark plug factory, a Michigan battery facility, limited distribution rights, and the services of several employees.

Within the year, the United States Justice Department brought suit under section 7 of the Clayton Antitrust Act, 15 U.S.C. Sec. 18, seeking to divest Ford of the assets it Ford was found liable for Clayton Act violations by a Michigan district court (the "divestiture court") in 1968. United States v. Ford Motor Company, 286 F.Supp. 407 (E.D.Mich.1968). A final judgment was entered in 1970, which ordered Ford to divest itself of the Autolite assets, including the "Autolite" name. United States v. Ford Motor Co., 315 F.Supp. 372 (E.D.Mich.1970), aff'd, 405 U.S. 562, 92 S.Ct. 1142, 31 L.Ed.2d 492 (1972). After the finding of liability but before final judgment, Ford added the Ghosted GT to the "Autolite" name, and began to advertise the two together.

acquired from Electric Autolite. Throughout the lawsuit, Ford used the "Autolite" tradename, along with the other acquisitions. In 1966, Ford created a design which it anticipated would be used with the "Autolite" name. That design consisted of a blurred image of a 1964 Ford Mustang GT (the "Ghosted GT").

Pursuant to the divestiture order, Ford transferred the Autolite assets to the Bendix Corporation in 1973. Even after divestiture, Ford retained the Ghosted GT, using it in conjunction with the tradename "Motorcraft," which Ford had adopted to replace the divested "Autolite" name. In effect, Ford used the Ghosted GT to bridge the "Autolite" and "Motorcraft" names, apparently hoping that the good will associated with the "Autolite" name would travel to the "Motorcraft" name via the Ghosted GT. Ford's use of the Ghosted GT has continued to date.

In the early 1980s, Ford began to focus on the problems of counterfeit automotive parts and simulated packaging, problems which had become the subject of considerable national attention. See, e.g., Senate Comm. on the Judiciary, The Trademark Counterfeiting Act of 1984, S.Rep. No. 526, 98th Cong.2d Sess. 4 (1984), reprinted in 1984 U.S.Code Cong. & Admin.News 3182, 3627 et seq.; Ford Motor Co. v. B & H Supply, Inc., 646 F.Supp. 975, 982 (D.Minn.1986). To address the problem, Ford began vigorously to enforce its copyright and trademark rights by filing lawsuits against alleged counterfeiters, including Altran. These efforts were largely successful, as Ford obtained relief against at least forty companies engaged in counterfeiting activities.

Ford, however, was unsuccessful in the present case. In 1984, Ford filed an action against Altran in the New Jersey district court, alleging that Altran infringed Ford's copyright and trademark rights. Two separate allegations of wrongdoing form the core of Ford's claims against Altran. First, Ford claims that Altran obtained transmission kits packaged in trade dress closely resembling the Ghosted GT from Transgo, a California automobile parts manufacturer, and that Altran sold those transmission kits in that same packaging. Second, Ford contends that Altran supplied Summit Motor Products, Inc., with plastic bags bearing trade dress almost identical to the Ghosted GT, and that Summit subsequently used the bags to package and sell automobile parts.

Altran moved to dismiss the case, alleging that the 1970 divestiture order had divested Ford of the Ghosted GT. That motion was subsequently denied without prejudice, but now forms the basis for Altran's counterclaim. Specifically, Altran argues that the 1970 order divested Ford of the Ghosted GT, that Ford committed wire and mail fraud after the divestiture order by concealing its retention and use of the Ghosted GT, and that Ford's actions violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Secs. 1961-68 ("RICO").

Upon Ford's motion, the district court dismissed Altran's counterclaim in October, 1988. ¹ It also denied an additional Ford motion for imposition of Rule 11 sanctions against Altran for pursuing its counterclaim. Meanwhile, Ford's copyright and trademark claims progressed to trial in January, 1990. After a trial which spanned eleven days, the jury returned a verdict On February 22, 1990, Ford filed a motion for a new trial under Fed.R.Civ.P. 59. That motion was denied on March 27, 1990. Prior to the district court's disposition of the motion, both Altran and Ford filed appeals at Nos. 90-5225 and 90-5256. After disposition of the motion, Altran and Ford again filed appeals at Nos. 90-5348 and 90-5363. All four appeals are now before us.

against Ford on all of its claims. A special verdict form adopted by the district court revealed that the jury found no infringement by Altran on either the copyright or trademark claims.

II.

The district court's jurisdiction is not in dispute. ² However, we must examine our appellate jurisdiction, since both parties allege that several of the appeals are jurisdictionally defective. Specifically, Altran argues that the appeals filed before the district court decided Ford's new trial motion are valid, while the appeals filed after the disposition of the motion are barred. Ford contends the opposite. ³

Our choice between these two views hinges on the validity of Ford's Rule 59 motion. If Ford's motion for a new trial was proper, two propositions follow. First, we would not have jurisdiction over the set of appeals filed prior to the district court's disposition of the motion, since any notice of appeal filed during the pendency of a Rule 59 motion is "of no effect" and a new notice of appeal must be filed following the order disposing of the motion. Fed.R.App.P. 4(a)(4); In re Sharon Steel Corp., 918 F.2d 434, 437 (3d Cir.1990) ("Rule 4(a)(4) prohibits the filing of an appeal until the [Rule 59] motion is resolved."); Mondrow v. Fountain House, 867 F.2d 798, 799 (3d Cir.1989) ("[I]f the notice of appeal ... was filed before the district court ruled on a timely Rule 59 motion, we do not have jurisdiction."). Second, we would have jurisdiction over the second set of appeals, which were timely filed after the district court disposed of Ford's motion.

On the other hand, if Ford's motion for a new trial were deemed improper, a contrary set of propositions ensue. First, we would have jurisdiction over the first set of appeals, since they were timely filed after the district court's entry of final judgment. Second, we would not have jurisdiction over the second set of appeals, since they were filed well after the thirty days allowed by the Federal Rules of Appellate Procedure. Fed.R.App.P. 4(a)(1).

In arguing that Ford's motion was invalid, Altran focuses on the scope of service. When Ford first filed its claims against Altran, it also sued several other defendants. ⁴ At the time Ford moved for a new trial, those defendants were parties to the action. Although those defendants neither participated in the January trial nor were bound by the jury verdict, having agreed previously to the entry of consent judgments in October, 1989, they were not formally dismissed from the case until after the motion. It is undisputed that Ford...