Jeep scores in legal spat with Mahindra as Roxor rolls into Detroit

The legal battle between Jeep and Mahindra won't stop the Indian automaker from showing its vehicles at the 2019 Detroit auto show, but the company's long-term prospects for continuing to sell the Roxor in the U.S. are still in doubt.

Fiat Chrysler Automobiles filed a trade complaint with the U.S. International Trade Commission in 2018, arguing that the Mahindra Roxor infringes on Jeep "trade dress" -- a trademarked image or appearance of a product. The concept of trade dress is considered just below the status of a patent, making enforcement difficult at times for established users of the trade dress, which is also a factor in the case.

Jeep recently won a round in the dispute when the U.S. International Trade Commission determined that the company is not contractually barred from enforcing its trade dress following an agreement with Mahindra years ago. The details of the latest decision are complex: In 2009, Mahindra sought to bring another vehicle called the Scorpio, a midsize SUV, to the U.S. The Scorpio in India had a seven-slot grille vaguely reminiscent of that of the Jeep Grand Cherokee at the time, and the two automakers agreed on a different design for Mahindra's SUV if the company introduced the Scorpio in the states. Specifically, the companies agreed that if Mahindra used the agreed-upon grille design on the Scorpio, Chrysler would not pursue any intellectual property claims against Mahindra.

"Chrysler consents to the use and incorporation of the grille design shown in Exhibit A (hereinafter the 'Approved Grille Design') in vehicles sold and advertised in the United States by Mahindra and/or its affiliates and authorized dealers," the agreement stated. "Chrysler agrees and warrants that it will not assert against Mahindra, its affiliates, authorized dealers, or customers, or anyone else, any claim for infringement of Chrysler's trade dress, trademark, or other intellectual property rights in the United States based on: (1) a grille having the Approved Grille Design; or (2) a vehicle containing or using the Approved Grille Design."

The Scorpio never came to the U.S. but the agreement between the companies remained in force as a contract, which Mahindra recently used in the U.S. International Trade Commission proceeding. Mahindra's argument is that FCA should be prevented from filing claims of trade dress and trademark infringement against it because the Roxor has the 4.5-slat grille that's vaguely similar to what was agreed upon in 2009.

The U.S. International Trade Commission disagreed with Mahindra this month, declining to dismiss FCA's petition.

"In the complaint filed by Fiat Chrysler (FCA) before the United States International Trade Commission (ITC) the administrative law judge has passed an initial determination order," Mahindra said in a stock exchange filing. "The order holds that the complaint filed by FCA will not be dismissed at this stage, as sought, and that the investigation by the ITC will continue."

FCA has cleared a major hurdle, which leaves it to pursue trade dress claims against Mahindra and to continue to seek an injunction that could prevent Mahindra from continuing to sell the Roxor. Mahindra could still make a few arguments in the case, using some of the factors that courts look to when determining whether there's a "likelihood of confusion." Trade dress infringement exists when one producer uses a trade dress that is similar enough to another's trade dress to cause a likelihood of confusion.

Typically, six factors are used to determine whether an ordinary buyer could confuse the two products: the strength or distinctiveness of the trade dress, defendant's intent to copy and profit off plaintiff's reputation and goodwill, the products' similarity, evidence of actual confusion, degree of care exercised by buyers and the area, manner, and degree of concurrent use.

The last three factors could favor Mahindra: FCA would have to show evidence of actual confusion in the marketplace -- whether buyers are accidentally buying Roxors instead of Wranglers, and how much the two vehicles overlap in their usage. When it comes to the degree of concurrent use, the Roxor isn't licensed for the road, which is an argument that Mahindra is also likely to make as the case proceeds. The two are not named alike and aren't sold in the same dealerships, which could be another problem for Jeep in showing evidence of confusion.

The case is by no means a slam dunk for Jeep, which is why Mahindra is not shying away from the Detroit auto show this year.