Chrysler and Moab Industries LLC (“Moab”) have been battling over the Moab mark for years. Moab holds the federally registered trademark Moab Industries®. Its business involves customization or uplifting vehicles—primarily JEEP® Wrangler® vehicles manufactured by Chrysler.

In 2012, Chrysler sought to register a “Moab” trademark, but the application was denied based on a likelihood of confusion with Moab’s mark and another mark. On December 12, 2012, Moab filed a suit asserting claims for unfair competition and trademark infringement related to the Moab Industries® mark. This case is scheduled for trial in April of this year.

In another suit filed last month, Moab sued FCA US LLC (this is the name Chrysler changed to in 2014) alleging that Chrysler had tortiously interfered with its business expectancy and defamed it. In the Complaint, Moab alleges that Chrysler sought to punish Moab for not being able to register, or at least, to concurrently use the Moab mark. Specifically, Moab alleges that Chrysler asked Moab’s main supplier Chapman Automotive Group of Scottsdale, Arizona (“Chapman”) to quit selling vehicles to Moab. In making this request, Chrysler allegedly accused Moab of flipping vehicles, which had an adverse effect on Chrysler’s fair allocation of vehicles to its dealers. Further, Moab claims that Chrysler sent a “blacklist” of companies and individuals that were purportedly exporting vehicles to its dealerships. The dealerships were told not to sell Chrysler vehicles to those on the list. If they did so, there would be a chargeback for each vehicle sold, or worse consequences. Moab contends this was done to coerce Moab to drop its pending trademark infringement suit against Chrysler, or to put Moab out of business so that it can appropriate the Moab trademark. Chrysler has not yet answered, so we do not know its side of the story yet.

Some have characterized the lawsuit as an attempt to address Chrysler’s “trademark bullying” activities. The purported actions by Chrysler are a bit different than the allegations of overreaching by a trademark owner that are usually at issue when “trademark bullying” is discussed.

bullseye“Trademark bullying” has been a hot topic in recent years and has been discussed in many DuetsBlog posts. You may recall my colleague Steve Baird wrote about this topic and explained the importance of trademark owners taking action to maintain the scope of their initial rights to protect their valuable intellectual property. Steve used a great analogy to a bullseye to explain these rights.

Specifically, Steve explained that “if the original scope of the rights associated with a particular non-famous mark is represented by the black-colored concentric circles on the target, and the bullet holes represent third party unauthorized uses of confusingly similar marks, and if the trademark owner takes no action against them, then over time, the trademark owner’s scope of rights easily can shrink down to center of the bullseye, where the trademark owner is only able to control identical marks in connection with directly competing goods.” This is obviously not a good result for the trademark owner. Accordingly, actions that some may term as “bullying” are sometimes merely actions to protect a trademark owner’s valuable rights.

In the recently filed case by Moab, there is a bit of a twist in that Moab is claiming that Chrysler is using “bullying” tactics to drive it out of business to obtain its valuable trademark rights. It will be interesting to read Chrysler’s side of the story and see whether a judge or jury finds that this is a case of “bullying” or not. The outcome of the trial in April related to Moab’s claims of trademark infringement and unfair competition will likely impact the recently filed case too.