Trademarks are some of the most valuable assets a business can own. A brand name, slogan, color, product or packaging shape, and even an aroma can function as an essential characteristic that distinguishes one’s goods and services from that of a competitor.

Consumers rely on trademarks as a shorthand to signal quality and value before a potential purchase, and in turn, trademark owners are well advised to police their marks to ensure that copycats and lookalikes do not permeate the market and deceive buyers.

In 2018, Jeep manufacturer FCA US, LLC (FCA) did just that when it successfully countersued against the India manufacturer, Mahindra Automotive North America, Inc. (Mahindra), the maker of an off-road vehicle, the ROXOR, that incorporated many of the distinctive features associated with the JEEP vehicle — a boxy shape, flat grille, and round headlights, among others.

The 2018-2019 ROXOR model was held to infringe the protected JEEP trade dress and was subsequently barred from importation into the U.S. But not two years later, Mahindra designed a “Post-2020 ROXOR” that, as FCA argued, is confusingly similar to the JEEP yet again.

Was FCA required to repeat its earlier successful efforts to seek to quash the infringer’s latest entry into the marketplace? How much would Mahindra have to change the ROXOR design to escape liability?

The answers to these questions are considered below and inform us to a particularly useful tool that courts reference as the safe distance rule and utilize in crafting and enforcing injunctions against known infringers.

The Safe Distance Rule

When a party infringes on a competitor’s trademark, the injured party usually seeks a permanent injunction to remove the infringing product from the market, prevent the infringer from making further use of the mark, and if the infringer wishes to continue sales of the item force it to adopt another.

The damage, however, may already be done. “[O]nce an infringer has confused the public, that confusion is not magically remedied” by a de minimis name or design change. Rather, as the Sixth Circuit in Mahindra & Mahindra, Ltd. v. FCA US, LLC (2022) explained, the confusion lingers.

The safe distance rule allows a court to require an infringer that continues sales of the item to not only secure a new, non-infringing mark, but one sufficiently removed from any characteristic of the infringed mark to put the public on notice that the two parties are not related.

The rule is a well-accepted discretionary tool that “reliev[es] the reviewing court of the need to retry the entire range of issues that may be relevant in an infringement action for each small variation the defendant makes to the enjoined mark.”

The alternative would be a system in which a defendant could simply make small changes to a mark, prompting a new legal proceeding at every occurrence. Instead, under the safe distance rule, a district court is not required to go through a full likelihood-of-confusion analysis but may simply determine whether or not a modified mark is sufficiently far removed from the plaintiff’s mark to put the public on notice that the two are unrelated.

Notably, the previously adjudicated infringer also may be prevented from using marks that would not otherwise constitute infringement if used by an unrelated, innocent party. Because of the infringer’s prior infringing acts, the rule seeks to mitigate the false association and confusion that has already permeated the marketplace and enjoin the infringer from using even non-infringing marks if they are not sufficiently far removed from “any characteristic” of the initially infringed intellectual property.

Mahindra & Mahindra, Ltd. v. FCA US, LLC

In this recent decision, the Sixth Circuit examined the district court’s refusal to apply the safe distance rule when evaluating the Post-2020 ROXOR trade dress. As the court of appeals explained, the district court based its determination, in part, on a United States International Trade Commission (ITC) analysis that concluded the Post-2020 ROXOR did not infringe the Jeep trade dress and declined to apply either a safe distance analysis or its own likelihood of confusion analysis.

According to the court of appeals decision, the district court impermissibly ignored the “lingering consumer confusion” created by the 2018–2019 ROXOR model. The district court should have, instead, inquired whether Mahindra's new product was “so far removed from any characteristic of the plaintiff so as to put the public on notice that the two are not related.”

The Sixth Circuit concluded that the district court provided insufficient reasons for declining to apply the safe distance rule, and thus vacated and remanded the case for further proceedings, noting that on remand, the district court must consider other factors relevant to applying the safe distance rule, such as customer confusion, and then consider whether the Post-2020 ROXOR stays a “safe distance” from the JEEP trade dress.

Conclusion

The safe distance rule applies a higher level of scrutiny against a party that had previously been held to infringe upon a plaintiff’s trademark and narrows the scope of permitted marks available to that party. Instead of a lengthy and detailed likelihood of confusion analysis, a court need only determine whether the adjudicated infringer’s mark is far removed enough from the infringed mark to mitigate the impact of damaging past infringement.

As a trademark owner, it is an imperative to know your competitors, be aware of new entries into the market, and be proactive in shutting down infringement. Thereafter, infringing competitors may be prevented from using even non-infringing similar marks, allowing the trademark owner a more advantageous position in the marketplace.