General Motors v. Keystone Automotive Industries

• Decision Date: 30 June 2006
• Docket Number: No. 05-1712.,05-1712.
• Citation: 453 F.3d 351
• Parties: GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. KEYSTONE AUTOMOTIVE INDUSTRIES, INC., and Tong Yang Industry Company, Limited, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

453 F.3d 351

GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. KEYSTONE AUTOMOTIVE INDUSTRIES, INC., and Tong Yang Industry Company, Limited, Defendants-Appellees.

No. 05-1712.

United States Court of Appeals, Sixth Circuit.

Argued: April 27, 2006.

Decided and Filed: June 30, 2006.

ARGUED: Ernie L. Brooks, Brooks Kushman, P.C., Southfield, Michigan, for Appellant. Thomas N. Young, Young &amp Basile, P.C., Troy, Michigan, Robert M. Kalec, Dean & Fulkerson, P.C., Troy, Michigan, for Appellees.

ON BRIEF:

Ernie L. Brooks, Robert C.J. Tuttle, Frank A. Angileri, Marc Lorelli, Brooks Kushman, P.C., Southfield, Michigan, for Appellant. Thomas N. Young, Thomas E. Bejin, Young & Basile, P.C., Troy, Michigan, Robert M. Kalec, Dean & Fulkerson, P.C., Troy, Michigan, for Appellees.

Before: KEITH, MERRITT, and DAUGHTREY, Circuit Judges.

OPINION

MERRITT, Circuit Judge.

Plaintiff General Motors Corporation ("GM") sued defendants Tong Yang Industry Company, Limited ("Tong Yang"), a Taiwanese manufacturer of automobile replacement grilles bearing two GM trademarks, and Keystone Automotive Industries, Inc. ("Keystone"), a distributor of Tong Yang's grilles, for trademark infringement and unfair competition. On the issue of likelihood of confusion — the sole issue on appeal — the District Court granted summary judgment in favor of the defendants and denied GM's motion for summary judgment. We agree with the District Court that there is no likelihood of confusion "at the point of sale" to body shops and on the internet. We disagree and reverse and remand on the issue of likelihood of "downstream" consumer confusion due to genuine disputes of material fact regarding the visibility of the allegedly infringing portion of the grilles.

I. BACKGROUND

GM, currently the world's largest automaker, manufacturers and sells replacement parts for its vehicles. Tong Yang produces and sells aftermarket replacement parts for automobiles, including some manufactured by GM. Tong Yang sells these parts to distributors like Keystone, which in turn sells most of the parts to collision repair shops (including some owned by GM) and also sells some parts to individuals over the internet.

GM owns registered trademarks in the Chevrolet "bow tie" design and the "GMC" design. The instant case arose out of Tong Yang's manufacturing and Keystone's distribution of replacement grilles with "placeholders" bearing these two designs. See Exhibits A and B.

For Chevrolets, the placeholder is a recessed space on the front of the grille in the shape of a bow tie in which a heavy plastic GM "bow tie" emblem is inserted. For GMC vehicles, the placeholder is a raised pedestal upon which a red-lettered "GMC" emblem is mounted. Each emblem is a separate part always purchased from GM and is secured to the placeholder with studs or pins extending from the back of the emblem so as to pass through holes in the placeholder. After inserted and secured in the placeholder of a Chevrolet grille, the "bow tie" emblem partially or wholly fills the "bow tie" recess. Similarly, when mounted onto a placeholder of a GMC grille, the "GMC" emblem wholly or partially covers the underlying "GMC" logo on the placeholder. See Exhibits C and D.

After GM filed suit, Tong Yang changed its grilles to remove the trademarked "bow tie" and "GMC" designs from its placeholders. These modifications have apparently decreased demand for the Tong Yang grilles.

GM's complaint alleges that the defendants' use of the trademarks constitutes: (1) trademark infringement under 15 U.S.C. § 1114(1); (2) unfair competition under 15 U.S.C. § 1125(a)(1); (3) trademark infringement under Michigan common law; and (4) unfair competition under Michigan common law. The parties submitted cross-motions for summary judgment on the dispositive issue for all these claims — whether the defendants' use of the trademarks is likely to cause confusion as to the origin or sponsorship of the replacement grilles, i.e., that GM manufactured or sponsored the manufacture of the defendants' grilles. The District Court granted summary judgment in favor of the defendants, holding that there is no likelihood of confusion. This appeal ensued.

II. STANDARD OF REVIEW

This Court reviews de novo a district court's grant of summary judgment on claims of trademark infringement or unfair competition. Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP, 423 F.3d 539, 546 (6th Cir.2005). Summary judgment should be granted whenever "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Id. (quoting Fed.R.Civ.P. 56(c)). We draw all reasonable inferences in favor of the non-moving party. Id.

III. LIKELIHOOD OF CONFUSION

GM's trademark infringement and unfair competition claims under state and federal law are closely related, and their resolution hinges on the central issue of likelihood of confusion:

[T]rademark infringement is a type of unfair competition ....

In many factual situations, the same result is reached whether the legal wrong is called trademark infringement or unfair competition. In such cases the courts often lump them together and speak of them as identical concepts. Today, the keystone of that portion of unfair competition law which relates to trademarks is the avoidance of a likelihood of confusion in the minds of the buying public. Whatever route one travels, whether by trademark infringement or unfair competition, the signs give direction to the same enquiry — whether defendant's acts are likely to cause confusion.

J. Thomas McCarthy, 1 McCarthy on Trademarks and Unfair Competition §§ 2:7-2:8 (4th ed.1996); see also AutoZone, Inc. v. Tandy Corp., 373 F.3d 786, 791 (6th Cir.2004) (noting that federal trademark and unfair competition claims require the likelihood of confusion inquiry); Champions Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1123 (6th Cir.1996) ("[F]alse designation is simply a species of unfair competition ... That the two claims are one and the same is made clear both by the language of the statute, and by many cases."); Carson v. Here's Johnny Portable Toilets, Inc., 698 F.2d 831, 833 (6th Cir.1983) (stating that Michigan common law unfair competition claims use the same likelihood of confusion test as the Lanham Act); K'Arsan Corp. v. Christian Dior Perfumes, Inc., No. 97-1867, 1998 WL 777987, at *8 (6th Cir. Oct.21, 1998) (unpublished) (stating that the likelihood of confusion inquiry applies to claims of unfair competition and of trademark infringement under Michigan common law).

Our Court employs an eight-factor test for determining likelihood of confusion:

1. strength of the plaintiff's mark;

2. relatedness of the goods;

3. similarity of the marks;

4. evidence of actual confusion;

5. marketing channels used;

6. likely degree of purchaser care;

7. defendant's intent in selecting the mark; [and]

8. likelihood of expansion of the product lines.

Tumblebus Inc. v. Cranmer, 399 F.3d 754, 764 (6th Cir.2005) (quoting Frisch's Rests., Inc. v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642, 648 (6th Cir.1982)). Even though a court must balance these factors when evaluating likelihood of confusion, id., not all of them are necessarily helpful in any given case, see Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275, 280 (6th Cir. 1997). Moreover, this list, though generally the predominate focus of analysis, is not exhaustive, and "[o]ther variables may come into play depending on the particular facts presented." AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348 n. 11 (9th Cir. 1979).

This Court has joined the vast majority of courts in extending the likelihood of confusion inquiry beyond only the point of sale. See Ferrari S.P.A. Esercizio v. Roberts, 944 F.2d 1235, 1245 (6th Cir.1991); 3 McCarthy, supra, at § 23:5. Accordingly, we will first address likelihood of confusion at the point of sale before venturing downstream.

A. Point-of-Sale Confusion

Likelihood of confusion at the point of sale involves a purchaser's confusion as to a product's origin or sponsorship occurring at the time of purchase. 3 McCarthy, supra, at § 23:5. The points of sale for most of Tong Yang's grilles are collision repair shops, but some are sold directly to individuals over the internet. We need not exhaustively apply the eight-factor test to reach the rather obvious conclusion that there is no likelihood of confusion at the point of sale because buyers are expressly informed that they are not purchasing GM grilles.

There can be no likelihood of confusion at the point of sale where a defendant conspicuously and unequivocally informs buyers that the defendant, and not the plaintiff, is the source of the product. In Ferrari S.P.A. Esercizio, this Court noted that there was no likelihood of point-of-sale confusion where a manufacturer of "knockoff" Ferraris informed his purchasers that his significantly cheaper cars were not genuine Ferraris. 144 F.2d at 1244-45. Similarly, customers knowing they are purchasing a knockoff designer purse or Rolex watch simply do not confuse the counterfeit with the original. See Hermes Int'l v. Lederer de Paris Fifth Ave., Inc., 219 F.3d 104, 107-08 (2d Cir.2000); Rolex Watch U.S.A., Inc. v. Canner, 645 F.Supp. 484, 487-88 (S.D.Fla.1986).

Likewise, in the instant case, no purchaser has reason to be confused as to the origin of the replacement grilles. Collision repair shops ordering Tong Yang parts do so intentionally and generally at the bidding of insurance companies because non-original equipment is less expensive and reduces the cost of repairing a vehicle. Moreover, GM grilles are made by Siegel-Robert, Inc., and carry the molded letters "SRI" to identify their origin, whereas Tong Yang grilles are marked "OTN" and "Made in Taiwan." In addition, Tong Yang grilles are shipped in boxes and packaging markedly different from those containing GM grilles with...