

               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  &amp; Cody, Robert  B. Cultice,
Goldstein                 &amp;                   Manello,                           Eric                               M. Dobrusin, and Harness, Dickey &amp; Pierce were
on brief for Chrysler Corporation.
Anthony M. Fredella with whom Fredella &amp; 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 &amp; 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 &amp; 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-
