General Motors Corp. v. Urban Gorilla, LLC - Trade Dress Infringement

The H onorabl e Jul ie A. Robins on, U.S. D is tri ct Court Judge, D ist ri ct of * Kansas, sit ti ng by des ignat ion. FI LED Unite d States C ourt of Appe als Tenth Ci rcuit September 12, 2007 Elisabeth A. Shumaker Clerk of Court PUBL ISH UNITED STATES COURT OF APPEALS TENTH C IRC U IT GENERAL MOTORS C O R PO R A T IO N, a D elaw are co rp o ra tio n, Plain tiff - A pp ellan t, v. UR B AN G O RILLA, LLC, a Ut ah li m i t e d li a b i li t y c o m p a n y, Defendant - A ppell ee. No. 06-4128 Appeal from the United St ates Dis trict C ourt for t he D is tri ct of Utah (D.C. No. 2: 06-CV -133-BSJ) Th om as R. Lee (G regory D. Phillips, Scott R. Ryther w ith him o n the b riefs), How ard, Phili ps & A ndersen, Salt Lake City, U tah for the Pl aint iff S Ap p ellan t. Peter H. B arlow, S trong & H an ni, Salt Lak e C ity, U tah (E rik E. C hild, Beyer, Pongrat z & Rosen, Sacr amento, C ali forni a w it h him on the br iefs) for t he Defendant S Appel lee. Before LUCERO, MURPHY, Cir cuit Judges, and ROBI NS ON, U.S. D is tri ct Court J udge. * Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 1

LUCERO, Cir cuit Judge. General M otor s Corporat ion (“G M ”) appeal s from t he dist ri ct cour t’s denial of a moti on for pr eli m inar y injunct ion agai nst U rban Gori ll a, LLC (“Urban G o rilla”). G M alleg es th a t U rb an G o rilla’s “ b od y kits” in frin g e u po n an d dilu te G M ’s trade dress righ ts in its Hu m m er line of v eh icles. Bec ause th e district court did not abuse i ts di scr eti on in fi nding that GM fai led t o m ake a st rong showing of a l ikel ihood of succe ss on the mer it s, we AFF IRM. I W eighi ng in at 1.25 t ons and abl e to cr oss a var iet y of r ough ter rai n, t he m ilitary H um v e e g ain ed na tion al atte n tion du ring O pe ration D e se rt Sto rm in 1991. A t the urgin g o f then -actor an d n ow G o vern or A rno ld S chw arzen egg er, Hum vee’s m anufact urer, A M G eneral Corporat ion (“A M G eneral ”) cr eated a civilian version of th e veh icle, called the H u m m er. In 1999, GM purchased t he tr ademark ri ghts to the Hummer from AM General, and i t now m arket s t hree vers ions of t he Hum m er under the GM brand name: the H1, H2, and H3. GM has a regi st ered t rademark i n the di sti ncti ve shape and des ign of t he H 1, t he Hum mer nose and gr il l ar ea, t he w ord “Humm er, ” and the s logan “Li ke N othi ng Else. ” The H 1 ret ail s for ar ound $140,000, and the ot her model s cost less. Si nce 2000, G M has sp ent tens o f m illions of d ollars ad vertising the H u m m er line as lux ury sport uti li ty vehi cles geared tow ard high-i nco m e purchasers. Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 2

Th e c omp l a i nt c on t ai n s f o ur cl a i ms fo r r el i e f. On a pp ea l, ho wev er, GM 1 only offer s argument s as t o trade dr ess infri ngement and di lut ion. B ecause i ssues (c on tin u e d...) - 3 - In 1 9 97, A c tive Po w e r, In c. (“A ctiv e P o w er”), the p red ec ess or in in terest to de fe nd a nt U rb a n G orilla, lau n ch e d th e U rba n G o rilla pro d uc t line, w h ich co nsis ts of st eel “body ki ts. ” These ki ts al low cust om ers to ins tal l a new body on top of an exi sti ng tr uck chassi s, at a pri ce of ar ound $10,000. A ccordi ng to Urban G o ri lla, th e k its are d e sig n e d to m a k e a tru c k lo o k lik e a m ilita ry-s tyle v e h ic le. Urban Goril la’ s kit s have been adve rti sed i n m agazi nes and on the i nter net s ince 1997, and one ki t w as feat ured on a t elevi si on show cal led “Xtreme 4x4” i n 2005. On O ctober 6, 1998, A M G eneral sent a cease and de sis t l ett er to Acti ve Po we r, s u gg es t i ng t ha t t he de s i gn of t he Ur ba n Go r i l la k i ts i n fr i ng e d o n AM G e ne ral’s H um m er tra de m ark s. In resp o n se to tha t letter, A ctive P ow er a g ree d to m ake c han ges to the U rba n G orilla produ ct design, but des pite A M G enera l’s re qu e s t to re vie w th es e ch a n g es, A c tiv e P o w e r n e v e r se n t th e m to A M G e n e ra l. A M G e n era l did no t pu rsu e th e m atter f urth e r, an d a s n oted su p ra, it so ld its int eres t i n the Hum mer li ne to GM the fol lowing y ear. In Febr uary 2004, Merri ck M axfiel d purchas ed the Urban Gori ll a product li ne from A cti ve Pow er. He is now pre s id e nt o f U rb a n G o rilla, w h ic h c o n tin u es to p ro d u ce a n d m a rk et th e b o d y kits. O n F eb ruary 13, 200 6, G M filed a c om plaint aga inst U rba n G o rill a f or, among other thi ngs, t rade dr ess i nfringement and dil uti on in vi olat ion of t he Lanham A ct, 15 U.S. C. § 1125(a), (c), and moved for a prel iminar y injunct ion. 1 Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 3

(... conti nued) 1 not adequately briefed w il l not be considered on appeal, we do not reach these other c laims. See G ross v. Bu rggraf C on str. C o., 53 F.3d 15 31, 1547 (10 th C ir. 19 9 5). - 4 - In i ts compl aint, GM all eges t hat t he U rban Gori lla des ign i s a “knock off” of the Hum mer, and poi nts to sever al exampl es of expl ici t, publi c comparis ons between th e tw o p ro d u cts. In 2005, the Urban Gori ll a w ebsi te was changed t o incl ude cust om er tes ti m onial s compari ng the Urban Gori ll a to t he H umm er. O ne cust om er quot ed on the s it e bragged t hat at the All Truck Nati onals Show, he ent er ed his Urban Goril la ki t t ruck i nto a competi ti on agains t “$125, 000 custom Hum mers” and won fi rst place. The kit he used was feat ured el sew here on t he websit e, wit h a capt ion stat ing that i t had recently w on first place in a national t ruck com petit ion against cust om Hum mer H1s, and cl aimi ng “[i] t gives y ou the l ook and performance y ou are looking for. ” In add it ion, the si te included the sl og an, “W hen N othing E lse W il l Do,” which GM all eges i s si m il ar t o the t rademarked Humm er s logan, “Like Nothing El se.” Al though GM concedes that these el ements have been removed from t he w ebsi te, it as sert s t hat t he test imoni als and s logan st il l appear in an U rban G oril la catal og. In addit ion to U rban G oril la’s own p rom oti on al materi als, GM offer ed int o evidence a November 10, 2005 art icl e from Canada’s Nati onal P o st e n title d “K it w ill tu rn you r C h e vy p ic k up in to a H um m e r— on th e c h ea p.” The art icl e begins, “Jus t becaus e you don’ t own a H umm er does n’t m ean y ou Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 4

ca n’t d rive aro u nd lo ok ing like you do. U rb an G o rilla’s 4x 4 of f-ro a d b o dy kits cost a fract ion of t he pri ce and offer a full range of s teel bodies t hat’ ll m ake y our st andard Chevy pickup t ruck l ook like 100 gr and. ” U rban G orilla respo nded to G M ’s co m plaint and m otion for pre liminary injunct ion by pointi ng ou t num erous differences i n the designs of the products; raisin g th e d e fe nse s o f lac h es, a cq u iesc en ce, an d e sto pp el b ase d o n its corr espondence wit h G M ’s pr edecessor in i nter est, AM G ener al; and present ing evi dence that it s small busi ness would cl ose if an i nj uncti on w ere t o iss ue. After conduct ing a hear ing on GM ’s moti on, t he dis tri ct cour t decl ined t o is sue a prel iminar y inj uncti on, fi nding that ther e was ins uffici ent evi dence t o just ify GM ’s r equest for emergency r eli ef “w it h part icul ar emphasi s on the ques ti on of likelih o od,” b ut allo w ing disc o ve ry to co ntin u e in the c ase. G M su b seq u en tly m ov e d f or a n inju nc tion pe nd in g a pp ea l in b o th th e d istrict co u rt an d this c ou rt, and bot h m oti ons were deni ed. GM now appeals from the di str ict court ’s i niti al deni al of t he motion for prel iminar y i njunct ion. II Pursuant to 28 U.S. C. § 1292(a), we have j uri sdict ion over appeals from interlocutory orders refu sing to gran t injunctions. W e review a district court’s de n ia l o f a p re lim in ary in ju n c tio n un d e r a n ab u s e o f d isc re tio n sta n d a rd. W y andott e N ati on v. Sebel ius, 443 F. 3d 1247, 1252 (10t h C ir. 2006). “A dist ri ct co urt a bu se s its d iscre tion w h e n it co m m its a n erro r o f law o r m ak es c lea rly Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 5

err oneous fact ual fi ndings.” Id. Our revi ew of the di st rict court ’s exer ci se of dis cret ion i s “narr ow,” Hart ford House, L td. v. Hal lmark Cards, Inc., 846 F. 2d 1268, 1271 (10th Cir. 1988), and “t he merit s .. . m ay be consi dered on appeal only i nsofar as they bear on the i ssue of j udici al di scret ion. ” O ter o Sav. & Loan A ss’n v. Fed. Rese rve B an k, 66 5 F.2d 27 5, 27 6-77 (10 th C ir. 1981). To ob tain a prelim inary injunction, the m o van t mu st show: (1) a subst anti al l ikel ihood of s uccess on t he meri ts; (2) i rrepar able har m to t he movant if t he i njunct ion is denied; (3) t he thr eatened i njur y outweighs t he harm that the pre lim ina ry injun ctio n m ay cau se th e o p po sin g pa rty; and (4) th e in jun c tion, if is sued, wil l not advers ely affect the publ ic i nter est. Great er Yell ow stone Coal. v. F lo w e rs, 3 21 F.3 d 1 2 5 0, 1 2 5 5 (1 0 th C ir. 2 00 3) (q u ota tio n a n d cita tio n o m itte d). In gener al, “a prel imi nary inj uncti on is an ext raor dinar y r emedy; it is t he ex ce ptio n ra the r th an the rule.” G T E C orp. v. W illiam s, 7 3 1 F.2 d 6 76, 6 78 (1 0th Cir. 1984). M oreover, w hen a pr eli m inar y i njunct ion would al ter the s tat us quo, such as the i njunct ion at iss ue in t his cas e, t he movant bear s a hei ghtened bur den and “must m ake a st rong showing bot h w it h regar d to t he li keli hood of success on the m erits a nd w ith reg a rd to the b alan ce o f h arm s.” O C e n tro E sp irita Beneficent e Uniao Do V eget al v. A shcroft, 389 F. 3d 973, 976 (10th Cir. 2004) (e n ban c, p er cu ria m), a f f ’d, 5 46 U.S. 4 1 8 (2 0 06). A Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 6

Wi t h r e sp ec t t o t h e fi r s t as pe c t of t he pr e l imi na r y in j un c ti on i nq ui ry, GM argues that i t is hi ghly l ikely to succeed on the m erit s of its cl aims for trade dress infr ingement and dil uti on. Because GM seeks t o alt er t he stat us quo by hal ting pro d uc tion of U rb a n G orilla p ro d uc ts, it m ust m a k e a “stro n g sh o w in g” w ith res pect t o the l ikel ihood of succe ss on t he merit s. W e concl ude that the di st rict court did not abuse i ts di scret ion i n findi ng that G M fail ed to meet thi s burden, and con sequently w e do no t reach Urban G orill a’s defenses. 1 Pursuant to t he Lanham A ct, a pers on m ay bring a fe deral cause of act ion for t rade dr ess i nfri ngement. 15 U.S. C. §1125(a); Hart ford House, 846 F.2d at 1271. A product ’s t rade dr ess “i s i ts over all image and appear ance, and may incl ude feat ures s uch as si ze, s hape, col or or color combinati ons, text ure, graphi cs, and even part icul ar s ales t echniques.” Sal ly Beauty C o., Inc. v. Beauty co, Inc., 304 F.3d 964, 977 (10t h C ir. 2002) (cit ing Two Pesos, Inc. v. Taco Cabana, I nc., 505 U.S. 763, 764 n.1 (1992)). To establ is h a clai m of trade dre ss in frin g em e nt, a p lain tiff m u st sh ow: (1) T he trad e d ress is in he ren tly dist inctive or has become disti nctive through second ary m eaning; (2) There is a li keli hood of confusi on among consumers as to t he source of t he competi ng prod ucts; an d (3) T he trad e d ress is non fun ctional. Id.; 15 U.S.C. § 112 5(a)(3). GM clai ms that the des ign of t he H umm er l ine of ve hicl es const it utes an inh ere ntly distin ctiv e tra de dre ss. B e ca use U rba n G o rilla do es n o t co n test th is Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 7

ass ertio n o n ap pe al, w e w ill ass u m e, w ith ou t d ec idin g, tha t G M c ou ld su ff icien tly dem onstrat e this factor at a tri al on the merits. In th i s c i rc u it, l ik e li h o o d o f c o n f u s i o n i s a q u e s ti o n o f f a c t, S a ll y B e a u t y, 30 4 F.3 d a t 9 7 2, w h ic h w e re v ie w f o r c le ar e rr o r. W yan d o tte, 4 43 F.3 d a t 1 2 5 2. In det ermini ng w het her a l ikel ihood of confusi on exis ts, w e consi der a var iet y of fact ors, incl uding: (1) t he degree of simil ari ty between t he product s; (2) the int ent of t he al leged i nfri nger in des igni ng it s product; (3) evidence of actual con fusion; (4) sim ilarit y in how the p rod ucts are m arketed; (5) the deg ree o f care likely to b e e xe rcise d by pu rch a sers; a n d (6) th e stre ng th of the trad e d re ss. S ally Beauty, 304 F.3d at 972, 979 (l ist ing fac tors for det ermini ng li keli hood of co nf u sion in trad em a rk in f ring em e n t claim s a n d sta ting th e f acto rs “ ap p ly equ ally to trade d ress infring em en t claims”) (citations om itted). On appeal, G M clai ms that the di str ict court erred i n consi deri ng only the likelih o od of co n fu sio n a t the po in t of sale, ra th er th an po ss ible p o st-sa le confusi on. At t he prel iminar y inj uncti on heari ng, GM argued t hat potent ial cust om ers m ight see an Urban Gori ll a kit on the road and a tt ribut e any si gns of infer ior quali ty to t he Hum mer brand. G M cit es our opi nion i n U nit ed Stat es v. Foote, 413 F.3d 1240, 1246 (10t h C ir. 2005), for t he proposi ti on that “the cor rect tes t i s w het her the def endant’ s use of t he mark was li kely t o cause confusi on, mist ake, or decept ion in t he publi c in gener al.” That case deal t wit h clai ms under the Count erfei t Trademar k A ct, 18 U.S. C. § 2320, but GM als o cit es cases from Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 8

other cir cuit s addres sing pos t-s ale confus ion i n evaluat ing cl aims br ought under the L anh am A ct. See, e.g., C h rysler Corp. v. S ilva, 118 F.3d 56, 59 (1st C ir. 1997) (recognizing rel evan ce of po st-s ale confusion in evaluating a t rade dress infr ingement clai m); Eserci zio v. Roberts, 944 F.2d 1235, 1244-45 (6th Cir. 1991) (concl uding t hat Congres s broadene d the prot ect ions affor ded under t he Lanham Act t o prevent confusion bey ond the poi nt of sal e); Polo Fashi ons, Inc. v. Craft ex, Inc., 81 6 F.2 d 1 4 5, 1 48 (4 th C ir. 1 98 7) (n otin g th e re lev an ce o f th e af ter-sa le cont ext i n evaluat ing t he li keli hood of confusi on); Loi s Sports w ear, U.S. A., Inc. v. Levi Straus s & C o., 799 F.2d 867, 871 (2d Cir. 1986) (holding t hat t he Lanham Act prot ect s agains t post -sal e confusi on). R ecogni zing t hat t he Lanham A ct w as int ended t o protect the mar ket as a w hole fr om confusion as to t he source of a product, we, like our si ster circui ts, hol d that the l ikel ihood of post -sal e confusi on is rel evant t o the t rade dres s infr ingement inqui ry. See 15 U.S. C. § 1127 (“The int ent of t his chapter is t o regul ate commerce wit hin t he contr ol of Congres s by making act ionabl e the dec epti ve and misl eading us e of marks i n such commerce. . . [a n d ] to p re v en t f ra u d a nd d e c ep tio n in s uc h c o m m e rc e. . . .”). W ith refere nce to the p resent case, w e co nclud e that the d istrict court appropr iat ely recogni zed t he possi bil ity of post- sale conf usion, but s imply found G M ’s e vid en c e in su ff icien t to ju stify an em e rg en cy ord e r. In a co lloq uy w ith GM ’s couns el, the cour t s tat ed that “[t] he more int erest ing ques ti on is confus ion of ot hers down the r oad” upon seei ng the complet ed car kit. Counsel r esponded, Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 9

From the r ecord, it appears the cour t was skept ical as t o w hether the 2 a ll e g e d ly u n iq u e f e a t u r e s o f t h e H u m m e r w e r e n o t a c t u a l ly s h a re d b y a l l m i li ta r y- sty le vehicl es. This concern touches on several areas of the t rade dress in f ri n g e m e n t i n q u ir y, i n c l u d i n g d is t in c ti v e n e ss, s tr e n g th o f th e m a r k, s i m il a ri ty, (c on tin u e d...) - 10 - “ if t h e c a s e g o e s f o rw a rd th e n G M w i l l s p e n d $ 1 0 0, 0 0 0 c o m m i s s io n in g a s u r v e y” to s how that people who view an Urban Gori ll a kit car ass ociat e it w it h a H u m m e r. L a te r, th e co u rt n o te d th at “ a c tu al c o n f us io n. . . isn ’t the te st a t a ll,” but went on to concl ude that confusi on w as unli kely. Alt hough a court m ight infer the l ikel ihood of pos t-s ale conf usion bas ed on factor s other than evi dence of act ual confus ion, such as t he simi lari ty of t he competing pr oducts, the di st rict co u rt in th is c as e f o u n d th e e v id e nc e a s to th e se o th er f a c to rs to b e in su f f ic ien t. In par ti cular, t he court noted t he absence of evi dence r egarding t he int ent of t he designer of the Urban Gori ll a kit s. Pr oof of int enti onal copy ing “rai ses an in fe re n c e o f lik e lih o od o f c on f u sio n.” B e e r N u ts, In c. v. C lo v e r C lub F o o d s C o., 711 F.2d 934, 941 (10t h C ir. 1983) (quotat ion and ci tat ion omi tted). I n thi s case, ho w e ve r, ne ithe r p arty pre sen ted ev id en ce as to h ow U rb an G o rilla d ev elo p ed its desi gn, what t he ori ginal drawings for the ki ts l ooked li ke, or w hether the dimensi ons of t he vehicl es were si mil ar. Al though in i ts decisi on the di st rict court place d a great deal of emphasi s on t his fac tor, it did not abuse i ts di scret ion by d o in g so. As to t he other factor s, t he dis tri ct cour t found t hat t here was a “ge nuine quest ion” as to t he str ength of GM ’s t rade dr ess. Given t he high pr ice of t he 2 Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 10

(... conti nued) 2 and no nfu nction ality. A lthoug h in ex pressing this ob servation, the district court did not speci fical ly address t hese fa ctors indi vidual ly, we concl ude that it did not ab u s e its d isc re tio n b y ide n tif ying a g en e ra l p ro b le m w ith G M ’s c la im. G M o ff ers a list o f su cc ess fu l inf rin ge m en t cla im s a ga inst o the r b od y kit 3 manufact urers i n other cir cuit s, i ncludi ng a case where GM obtai ned a pre lim in a ry inju n c tio n a ga in s t a m an u f a ctu re r o f “ k n oc k -o f f ” H u m m e r k its. General M otor s Corp. v. Let’ s M ake A Deal, 223 F. Supp. 2d 1183 (D. Nev. 2002). W e refus e to procee d li ke a moth to t he fl ame. G M ’s s uccess i n one dis tri ct cour t agai nst one manufactur er does not rel ease i t from t he burden of produci ng suffi cient evidence in t he present case. - 11 - Hum mer, t he court furt her concl uded that purchas ers would exer cis e suffi cient c ar e t ha t t he y wou l d no t be co nf us ed by a l es s ex pe ns iv e ki t. Al t ho ug h GM submit ted evi dence t hat bot h it and U rban Gori lla mar keted t heir product s on the int ernet and the t el evisi on program “Xtr eme 4x4,” t he court focused on the fa ct tha t the p a rties w ere m ark etin g inh ere ntly dif fe ren t kin ds o f p rod u cts— a b od y kit requi ri ng assembly and a fini shed vehi cle. In s um, t he dis tri ct cour t pr operl y cons idered t he rel evant factor s for li keli hood of confusi on, i ncludi ng the pos sibi li ty of post -sal e confusi on, and si m ply determi ned that G M had not met i ts burden at this stage of the l it igat ion. 3 U pon co nsiderat ion of the record, we con clude that t he distri ct court did not abuse it s di scret ion on t his i ssue. Because we reac h this decis ion on the l ikel ihood of confusion element of the trade dress i nfringem ent clai m, we need not address w h eth er th e tra de dre ss is no n fu nc tion al. 2 Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 11

In O cto be r 2 00 6, C on g ress am e nd e d 1 5 U.S.C. § 1 12 5 (c) su c h th at a 4 plai nti ff may succeed i f another m ark i s “l ikel y t o cause di lut ion. ” In i ts br ief on ap pe al, G M d o es n o t ad dre ss th is c ha ng e in th e law, w h eth er th e c ha ng e sh ou ld appl y r etroact ively, or how other amendm ent s to § 1125(c) affect it s cl aim. See § 1125(c) (4) (in ci vil acti on for t rade dres s dil uti on, pl aint iff has burden of provi ng no n fu nc tion ality, fam o u sn ess, and th at u nre giste re d m a tter in trad e d ress is famous separ ate and a part from fame of any regis ter ed marks incl uded i n trade dres s). A ccordi ngly, we do not address these i ssues. See Gross, 53 F. 3d at 1547. - 12 - In addi ti on to i ts cl aim for trade dr ess infri ngement, G M all eges that Urban Goril la’ s product s cause ac tual dil ution of i ts trade dr ess. At the t ime of t he prel iminar y inj uncti on heari ng, the Lanham Act al lowed for t he owner of a fa m ou s m ark to se ek an in jun ctio n a ga inst “ an o the r pe rso n ’s co m m e rcial u se in commerce of a mark or tr ade name, i f such use .. . causes dilut ion of t he dis ti ncti ve quali ty of the mark.” 15 U.S. C. § 1125(c) (r ew ri tt en by Pub. L. 109- 4 312, § 2(1)). In M oseley v. V S ecret C atalog ue, Inc., 537 U.S. 41 8, 42 2 (20 03), the Supr eme C ourt held t hat “pr oof of actual inj ury to t he economic val ue of a famous mark” i s requi red t o succeed on a c lai m for di lut ion. A plai nti ff may prove ac tual dil ution “t hrough ci rcumst anti al evi dence— the obvi ous case i s one w here the jun ior and senior m ark s are iden tical.” Id. at 434. A t the p reliminary inju nc tion he arin g, G M d id n ot o ff er a n y direc t ev ide nc e o f a ctu al ec o no m ic harm, and U rban Gori lla pr esent ed evidence that the t w o product s were not ident ical. B ased on t his evi dence, the di st rict court concluded t hat GM had not pre se nted su f ficie n t circu m sta ntial e v ide nc e to ind ica te th at it su ff ere d e co n om ic harm. U pon revi ew of the r ecord, w e agree t hat G M fail ed to make a st rong Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 12

sh ow ing tha t it w as lik ely to su c cee d on the m e rits of its dilu tion claim w ith res pect t o the el ement of act ual di lut ion. B In addi ti on to l ikel ihood of succe ss on t he merit s, GM must al so make a st rong showing r egardi ng the bal ance of the equi t ies. W it h respect to t his element of the pre lim ina ry injun c tion inq uiry, G M arg u es th at th e d istrict co u rt e rred in consi deri ng the fi nancial hards hip to Urban Gori ll a. Merri ck M axfiel d tes ti fied tha t his b u sine ss w ou ld ce rtainly clo se if an inju n ctio n w ere to iss ue. In its rul ing, the di st rict court held “t hat t here i s ins uffici ent evi dence t o m ake t he kinds of fi ndings t hat i n m y opini on ought t o be made in refe rence t o an effort to put somebody out of bus iness.” In it s b r ie f, G M a rg u e s th a t “ [a ] d e f e n d a n t w h o ‘ o p e n l y’ a n d ‘ in te n ti o n a l ly’ appropr iat es a pl aint iff’ s marks ‘ can hardl y clai m to be har med, s ince i t brought any and all difficulties occasio ned by the issuan ce o f an injunction up on itself.’” (ci ti ng O pti cians A ss’ n of A m. v. Indep. Optici ans of Am., 920 F.2d 187, 197 (3d Cir. 1990)). W e agr ee that w hen the ca se for i nfri ngement i s clear, a def endant cannot avoid a pr eli m inar y injunct ion by clai m ing har m to a bus ines s buil t upon that infr ingement. See Proces sed Pl asti c Co. v. W arner Comm c’ns, Inc., 675 F.2d 852, 858- 59 (7t h C ir. 1982). In t his cas e, however, the di st rict court found that th ere w a s n o ev id e n ce th a t U rb an G o rilla “ in ten tio n a lly” c o p ied G M ’s tra d e dre s s. M oreover, t he court concluded t hat GM fail ed to make a s trong s how ing of Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 13

li keli hood of succes s on the mer it s. Where a movant has fail ed to make a s trong case for infr ingement, i t is not ent it led t o consider ati on of w hether the nonmovant has br ought t he harm upon it self. Because t he dis tri ct cour t found GM ’s showing on the m e rits to b e in su ff icien t, it pro p erly con sid ere d the fin an cial h a rdsh ip to U rb a n G ori lla tha t w o u ld re su lt f ro m a p re lim ina ry in ju n ctio n. Final ly, G M clai m s t hat t he irr eparabl e inj ury to i ts goodwil l far outweighs an y fina nc ial h arm to U rb a n G orilla. A ltho ug h “in frin ge m en t alo n e c an co n stitute irre p a ra ble in ju ry a n d . . . th e m o v a n t is n o t re q u ire d to sh o w tha t it lo s t sa le s,” GT E C orp., 731 F. 2d at 678, in t he present case, G M made an ins uffici ent sh ow ing w ith resp e ct to in frin g em e nt. T h us th e distric t co urt w as n o t ob liga ted to fi nd irr eparabl e inj ury to GM and could concl ude that “monetar y compensa ti on ma y we l l b e am p l e a nd s u f fi c i e n t i n t h e ev en t t h a t GM u l t i ma t el y p r ev ai l s. ” We det ermine t hat t he dist ri ct cour t di d not abuse i ts discr eti on in bal ancing t he harms. III AFF IRMED. Appellate Case: 06-4128 Document: 010131132 Date Filed: 09/12/2007 Page: 14