Court Opinion

ID: 2964818
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:31:34.202292+00
Date Added: 2024-06-11T11:43:02.032177
License: Public Domain

USCA1 Opinion

	

                           UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                ____________________
       No. 95-1926
                                CHRYSLER CORPORATION,
                                Plaintiff, Appellant,
                                         v.
                    JOHN C. SILVA, JR., d/b/a J.C. SILVA DESIGNS,
                                Defendant, Appellee,
                                _____________________
       No. 95-1927
                                CHRYSLER CORPORATION,
                                Plaintiff, Appellee,
                                         v.
                    JOHN C. SILVA, JR., d/b/a J.C. SILVA DESIGNS,
                                Defendant, Appellant,
                                _____________________
       No. 96-1231
                                CHRYSLER CORPORATION,
                                Plaintiff, Appellant,
                                         v.
                    JOHN C. SILVA, JR., d/b/a J.C. SILVA DESIGNS,
                                Defendant, Appellee.
                                ____________________

                                ____________________
                    APPEALS FROM THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF MASSACHUSETTS
                  [Hon. Edward F. Harrington, U.S. District Judge]
                                ____________________
                                       Before
                                 Cyr, Circuit Judge,
                    Aldrich and Campbell, Senior Circuit Judges. 
                                ____________________
            Jerre B. Swann  with whom Kilpatrick  & Cody, Robert  B. Cultice,
       Goldstein 
                & 
                  Manello, 
                          Eric
                               M. Dobrusin, and Harness, Dickey & Pierce were
       on brief for Chrysler Corporation.
            Anthony M. Fredella with whom Fredella & Wheeler was on brief for
       John C. Silva, Jr.
                                ____________________
                                    July 9, 1997
                                ____________________

                      ALDRICH, Senior Circuit Judge.  This is an  unusual
            case 
                that 
                     goes 
                         back 
                              a 
                                long while, including a four year history
            prior to suit.   Plaintiff Chrysler Corporation  ("Chrysler")
            filed suit in the Massachusetts District Court in July  1991,
            under 
                 the 
                     Lanham Act, 15 U.S.C. SS 1051 et seq., for trademark
            infringement,
                         specifically trade dress, against John C. Silva,
            Jr. 
               ("Silva"), and a number of other individual defendants who
            have settled out.   At issue  was Chrysler's allegation  that
            Silva copied Chrysler's  innovative "muscle  car," the  Dodge
            Viper.  Silva counter-claimed, alleging that the shoe was  on
            the other  foot; that Chrysler was  the one at fault,  having
            stolen 
                  the 
                     allegedly 
                               infringed design from him.  On December 9,
            1993  the court,  in a   separate  brief memorandum,  ordered
            summary judgment  for Chrysler  on the  counter-claim on  the
            ground of estoppel.1
                      The 
                         first 
                               of 
                                 Chrysler's 
                                            demands was for a preliminary
            injunction 
                      against 
                             violation.  This was denied, and ultimately,
            after a bench trial, the court dismissed Chrysler's complaint
            with 
                a 
                  memorandum 
                            of 
                               findings.  This was initially done on July
            19, 
               1995. 
                      
                      On 
                        August 
                               4 
                                 Chrysler moved to amend the findings and
            to alter or amend the judgment, or, alternatively, for a  new
            trial.  The court took additional testimony and on January 9,
            1996 
                it 
                   again entered judgment for defendant on the complaint.
            Both parties appealed.  We affirm in part.
            1.  This went to judgment on December 14, 1995.
                                         -3-

                      Just prior to oral argument before us, Silva  died.
            At 
              the 
                  argument 
                          date 
                               his 
                                   (former) counsel appeared, saying that
            he had no client.  On his stating that his argument was ready
            we said we  would hear the oral  arguments of both sides  and
            reproduce 
                     them for the files.  This has been done.  We further
            stated that we would  afford time for an administrator to  be
            appointed for  Silva and  move to  continue the  case, if  so
            minded.   This, too,  has been done.   One  Jeanne A.  Silva,
            temporary administratrix of the estate of John C. Silva, Jr.,
            has 
               been 
                    substituted for the deceased Silva in all capacities.
            We continue with the appeals.
                                      I. Facts
                      It is, of course, well known that there is enormous
            competition  that  depends   upon  the  body  appearance   of
            automobiles. 
                         
                         It 
                           is 
                              not 
                                  so well known that this is so important
            to true enthusiasts that custom builders make, or order made,
            special 
                   bodies to place over a standard chassis.  This art can
            produce problems.   See,  e.g., Ferrari  S.P.A. Esercizio  v.
            Roberts, 944 F.2d 1235, 1244-45 (6th Cir. 1991).
                      In 1988, spurred on  by a conversation between  its
            executives the  previous  year, Chrysler  considered  designs
            harking back, in part, to 1960's roadsters.  A prototype  was
            completed 
                     in 
                        time 
                            for 
                                the January 1989 International Automobile
            Show 
                in 
                   Detroit.  Here the reception was so good that Chrysler
            formed TEAM VIPER.  By December 1991, it had four  production
                                         -4-

            units  and in  1992 it  produced 200  Vipers.   It had  spent
            approximately  $8,000,000 to  promote this  vehicle and  over
            $75,000,000  to bring  it into  production.   It attracted  a
            special class of buyers.
                      During the trial, as a defense to the  infringement
            claim, Silva testified that he had contacted Chrysler by mail
            in  October 1987  and offered  it the  opportunity either  to
            purchase 
                    his 
                        design for a car Silva had dubbed the "Mongoose,"
            for 
               which 
                     he 
                        included sketches with his letter, or to contract
            with him to build a show car based on the design.  He claimed
            that past experience in building cars for large manufacturers
            instilled in him the necessity of clearly marking the designs
            with proprietary statements of ownership and  confidentiality
            before 
                  forwarding 
                            them 
                                 to Chrysler.  He also included a request
            that the sketches be returned if Chrysler was not interested.
            He 
              received 
                       no 
                         response 
                                  to his letter and the sketches were not
            returned.
                      In early 1989, Ronald Torlone, one of the  original
            defendants, decided  he  wanted a  "new  look" for  his  1979
            Chevrolet Corvette.   For this he  retained a builder,  Motor
            Incorporated,  for  which  Silva  worked  as  an  independent
            contractor.   They  and another  original defendant,  Richard
            Galardi, 
                    produced the Mongoose.2  Also in 1989, after seeing a
            2.  The single Mongoose is currently in the hands of Chrysler
            who received it from another original defendant, Leonard
            Legere, who purchased it from Richard Galardi who received it
                                         -5-

            picture of Chrysler's prototype  for the Viper, Silva  called
            Chrysler and eventually spoke with an in-house attorney  who,
            after learning of the Mongoose, demanded that Silva stop work
            and 
               destroy 
                       the vehicle.  Silva refused, Chrysler brought this
            suit and Silva counterclaimed for the theft of his design.
                                    II.  Analysis
                      Section 
                             43(a) 
                                   of 
                                     the 
                                         Lanham Act, 15 U.S.C. S 1125(a),
            provides protection against:
                           (1)  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,  which
                      --
                           (A) is likely to cause confusion, or
                      to cause mistake, or to deceive as to the
                      affiliation, 
                                  connection, or association of
                      such person with another person, or as to
                      the origin,  sponsorship, or approval  of
                      his or her goods, services, or commercial
                      activities by another person . . . .
            15 U.S.C. S 1125(a).
                      In 
                        1992, 
                              the 
                                 Supreme 
                                         Court held that S 43(a) extended
            to 
              claims 
                     for infringement of trade dress.  Two Pesos, Inc. v.
            Taco Cabana, Inc., 505 U.S. 763, 770 (1992). Trade dress  has
            been defined  as "the design  and appearance  of [a]  product
            from Ronald Torlone in satisfaction of amounts due in return
            for Galardi's construction of the mechanicals for the car. 
            While Chrysler has possession of the Mongoose apparently as
            part of a consent decree with Legere, Galardi retains title
            to the vehicle because Legere defaulted on his payments.
                                         -6-

            together with the  elements making up the overall image  that
            serves to  identify the product  presented to the  consumer."
            Fun-Dametal Too, Ltd. v. Gemmy Indus., 111 F.3d 993, 999  (2d
            Cir. 1997) (internal citation omitted).  In order to  warrant
            protection, trade dress must be either inherently distinctive
            or 
              have 
                   become 
                         so 
                            by 
                               acquiring a secondary meaning.  Two Pesos,
            505 
               U.S. 
                    at 
                       769.  Inherently distinctive trade dress cannot be
            functional, and to  prevail on a  claim of infringement,  the
            defendant's 
                       product 
                              must 
                                   have created a likelihood of confusion
            with 
                regard 
                       to its source.  See id.; Tec Eng'g Corp. v. Budget
            Molders Supply, Inc., 82 F.3d 542, 545 (1st Cir. 1996).
                      The 
                         court 
                               found 
                                    that 
                                         the 
                                             Viper "had acquired inherent
            distinctiveness 
                           through 
                                  secondary meaning, that the trade dress
            was 'non-functional,'" and therefore entitled to trade  dress
            protection, 
                       but 
                          that 
                               Chrysler failed to prove the likelihood of
            confusion between the  two cars.  It made several  individual
            findings of fact.  Relevant ones include:
                      11.  Mr. Silva saw and/or read the  press
                      coverage of the Viper concept car in  the
                      Spring and Summer of 1989.
                                        * * *
                      13. 
                         Photographs of the Dodge Viper concept
                      car served as the starting point for  the
                      car body designed  by Mr.  Silva for  Mr.
                      Torlone.
                      14.   Mr.    Silva    made    significant
                      modifications to the design of the  Dodge
                      Viper in his  creation of  the car  body,
                      including,  but   not  limited  to:   the
                      windshield; the  rollbar; the nose  area;
                                         -7-

                      the wrap-around area of the mirrors;  and
                      the cut lines.
                      15. Mr. Silva did not intend to duplicate
                      or otherwise copy the Dodge Viper.
                      With these findings in hand, the court moved to the
            test 
                for 
                    likelihood of confusion, consisting of eight relevant
            factors, see Aktiebolaget Electrolux v. Armatron Int'l, Inc.,
            999 F.2d  1, 3  (1st  Cir. 1993);  Boston Athletic  Ass'n  v.
            Sullivan
                   , 
                     867 F.2d 22, 29 (1st Cir. 1989), and determined that
            each party was entitled to prevail on four, as follows:
                      1.   Similarity of  the marks  (dress)  -
                           Chrysler
                      2.   Similarity of goods - Chrysler
                      3.   Channel of trade - Silva
                      4.   Channel of advertising - Silva
                      5.   Class  of  prospective  purchaser  -
                           Silva
                      6.   Evidence  of   actual  confusion   -
                           Chrysler
                      7.   Defendant's intent  in adopting  the
                           dress - Silva
                      8.   Strength of the dress - Chrysler.
                      On this basis, unless Silva prevails because of his
            lack  of bad  intent  in  adopting Chrysler's  dress,  it  is
            difficult to understand why  Chrysler, who prevailed here  on
            similarity 
                      and strength of dress, should lose its case, it not
            being necessary, since the  Lanham Act's amendment, to  prove
            purchaser confusion, post.  Beyond this seeming inconsistency
                                         -8-

            it is hard to explain  how the court could say, "[T]he  Court
            rules, as a matter of law, that plaintiff did not establish a
            likelihood of  confusion between  its vehicle  and the  Silva
            vehicle."  (emphasis supplied.)  If the court meant matter of
            law, it was clearly  wrong.  There were ample lay  witnesses,
            notably the other original defendants, expressly mentioned by
            the 
               court, 
                      whose evidence  precluded ruling as a matter of law
            in Silva's favor.
                      Study 
                           of 
                              its 
                                  opinion as a whole leads us to conclude
            that 
                the 
                    court really meant "find," or "conclude," and we will
            so  address  its  decision.    Chrysler  says,  as  it  must,
            Aktiebolaget 
                        Electrolux
                                 , 
                                   that such a finding was plainly wrong.
                      A 
                       substantial part of the court's opinion is devoted
            to listed factors 3, 4 & 5, ante, concluding that  purchasers
            would not  be confused or  misled.   Chrysler concedes  this;
            indeed it offered no evidence to the contrary.3  Rather,  its
            case 
                depends 
                        on 
                          what 
                               is 
                                  known as post-sale confusion -- viewers
            who  have an  interest from  the standpoint  of the  original
            creator's reputation and may be misled.  Chrysler  introduced
            persuasive 
                      evidence 
                              that 
                                   the Viper added greatly to its general
            reputation, quite apart from sales.  Infringers who do a poor
            3.  We devote a footnote to the court's giving weight to its
            finding that Silva did not intend to copy.  Strictly, intent,
            or lack thereof, does not affect the eyes of the viewer.  See
            Lois Sportswear, U.S.A. v. Levi Strauss & Co., 799 F.2d 867,
            875 (2d Cir. 1986).  Proof of bad intent may,
            psychologically, hurt as an admission.  Proof of good intent
            does not change appearance.
                                         -9-

            job 
               mechanically, 
                            or 
                               introduce differences that detract, but do
            not 
               change 
                      the apparent origin, were recognized by Congress in
            enlarging the statute.  See Roberts, 944 F.2d at 1244-45.  In
            disregard of  Fed. R. Civ. P.  52(a), this confusion was  not
            mentioned, let alone discussed by the court, although it  was
            part of Chrysler's main case and was adequately supported  by
            expert 
                  testimony.4  We see no possible fair resolution of this
            basic 
                 inadequacy 
                           short 
                                 of giving Chrysler a whole new trial, to
            be 
              before 
                     a 
                       new judge because of the extensive interlocking of
            the evidence.
                      This brings us to Silva's temporary  Administratrix
            entering the  case  to pursue  the  appeal from  the  summary
            judgment  disposing of  the counterclaim  for taking  Silva's
            design. 
                    
                    If 
                      Silva's 
                              testimony of significant variances by which
            the Mongoose departed from the Viper is correct, and on which
            the court ultimately relied,  it is hard to see how  Chrysler
            pirated 
                   the 
                      Mongoose's 
                                 design.  While a party's pleading may be
            inconsistent, in the  last analysis one  cannot have it  both
            ways.   The  court was  impressed by  Silva's submission  and
            pretrial evidence  contrary to  the counterclaim,  committing
            himself to inconsistencies, and held him estopped5.
            4.  The court did give some attention to Chrysler's expert
            during trial.  "I was . . . not paying too much attention to
            the cross-examination, but the last question was a good one,
            it woke me up."
            5.  The district court found in relevant part:
                                        -10-

                      We  are   not   moved  by   Silva's   explanations;
            particularly 
                        not by the use he made of the fact that initially
            he was  without counsel,  and  we are  much troubled  by  his
            charging  Chrysler  with  making  "an  especially   egregious
            misstatement 
                        of fact" in saying his answers to interrogatories
            were under  oath when  they were  unsigned.   Silva fails  to
            mention 
                   that 
                        in 
                          his 
                              deposition, obviously under oath, he agreed
            to their correctness.
                      The judgment dismissing the complaint is  reversed;
            Chrysler 
                    to 
                       have 
                           a 
                             new 
                                 trial.  The judgment for Chrysler on the
            counterclaim 
                        is 
                          affirmed, with leave to the succeeding judge to
            reconsider if so minded.  Costs to Chrysler.
                           Defendant Silva repeatedly made
                      judicial admissions negating his
                      misappropriation counterclaim, and, thus,
                      is estopped from raising said claim at
                      this time.  The Defendant Silva
                      repeatedly conceded in pleadings and
                      other papers filed with this Court that
                      his vehicle is "significantly different"
                      than the Viper and was based on design
                      elements in the public domain.
                                        -11-