
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-
