Court Vacates Denial of Injunction on Jeep Trade Dress

The Sixth Circuit has vacated a ruling by a court in the Eastern District of Michigan denying a permanent injunction against the importation, sale, and marketing of an off-road vehicle that Jeep claims infringes its trade dress. Mahindra Automotive North America, Inc. (MANA), a subsidiary of Plaintiff-Appellee Mahindra & Mahindra, Ltd. (M&M) (collectively, "Mahindra"), designed an off-road-only vehicle called the 2018-2019 ROXOR. The United States International Trade Commission (ITC) determined that the 2018-2019 ROXOR infringed the trade dress associated with Jeep vehicles. Mahindra designed a new version of the vehicle that the ITC determined didn’t infringe Jeep’s trade dress. FCA US, LLC (Fiat Chrysler Automobiles), which makes Jeeps, filed a motion in federal district court to permanently enjoin sales of the new ROXOR under the "safe-distance rule." This is an equitable rule applied by courts in crafting injunctions for known infringers of intellectual property. FCA claimed that its trade dress comprised the following elements:

1. "a boxy body shape with flat\[-] appearing vertical side and rear body panels ending at about the same height as the hood";
2. a "substantially flat hood with curved side edges that tapers to be narrower at the front";
3. "trapezoidal front wheels with front fenders or fender flares that extend beyond the front of the grille";
4. "a flat\[-]appearing grille with vertical elongated grille slots and a trapezoidal outline that curves around round headlamps positioned on the upper part of the grille";
5. "exterior hood latches"; and
6. "door cutouts above a bottom portion of the side body panels."

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The district court declined to apply the rule, reasoning:

there are so many differences between the Post-2020 Roxor and the Jeep Trade Dress such that \[t]he average purchaser certainly will know immediately that \[the Post-2020 Roxor] is not a Jeep by merely looking at it straight on.

In the case of [_Mahindra & Mahindra Ltd. v. FCA US, LLC_], the Sixth Circuit found that the district court provided insufficient reasons for declining to apply the safe-distance rule.

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As the court explained, The safe-distance rule is an equitable rule applied by courts to craft permanent injunctions for known infringers of intellectual property. _See id._ at 544. "Once a party infringes on another's trademark or trade dress, the confusion sowed \`is not magically remedied' by _de minimis_ fixes." _Id._ (quoting _Taubman Co. v. Webfeats,_ [319 F.3d 770], 779 (6th Cir. 2003)). Rather, because "confusion lingers," the safe-distance rule requires the infringer "not only to secure a new non-infringing name (or other infringing characteristic) for his product, but one so far removed from any characteristic of the plaintiff so as to put the public on notice that the two are not related." As the court noted, The safe-distance rule serves several useful purposes. It seeks to avoid "preserv\[ing] for \[infringers] a good will acquired through fraud." _Broderick v. Bascom Rope Co. v. Manoff,_ [41 F.2d 353], 354 (6th Cir. 1930). It also "reliev\[es] the reviewing court of the need to retry the entire range of issues that may be relevant in an infringement action for each small variation the defendant makes to the enjoined mark." The court agreed with FCA that.

Rather than viewing the Post-2020 Roxor design through the lens of the Safe Distance Rule— the different and more protective standard that this Circuit applies to adjudicated infringers—the district court applied the more lenient, first-look likelihood of confusion standard that the Federal Circuit applies.

The circuit court rejected the district court’s reasons for declining to apply the safe-distance rule, and thus vacated its ruling.