September 16, 2021

Is a dispute on the horizon: Ford trade marks SKYLINE in the US

As a much younger man the first quality car that I bought was a Japanese import Nissan Skyline GTS-T with 80,000kms on the clock. Unlike my previous vehicles, it had a stereo that worked (and gave justice to the music I was listening to at the time) (1), electric windows, and air conditioning. It also had savage turbo lag which would cause the back wheels to break traction about 3 seconds after you mashed the accelerator into the floor. I loved it! When I sold it to a colleague (2) I had racked up an additional 100,000kms of spirited driving.

Given this background, when I hear the word “Skyline” the first thing I think of is definitely not the Ford Motor Company. And yet, oddly enough, Ford has recently applied to register “Skyline” in relation to “motor land vehicles, namely SUVs, trucks and automobiles” in the United States (3).

While Ford hasn’t used the name “Skyline” before, it has used “Skyliner” to indicate a level of trim on a number of its models in the 1950s. Nissan continues to use “Skyline” in Japan, but sells the same car in the US as an Infiniti Q50. The model which gave the “Skyline” name legendary status, the GT-R, is no longer sold under “Skyline” in any jurisdiction.

In a possible retaliatory move, Nissan filed for “Skyline” in the US relation to “model cars; minicars” claiming first use on 8 January 2021. The U.S. filing includes an example photo of a four-door R34 Skyline model, indicating that Nissan intends to use “Skyline” as a legacy brand . Nissan has also registered the name for full-sized cars in Canada on 25 August. While the model car filing doesn’t necessarily trump Ford’s application, it does indicate that Nissan is fighting to keep the rights to the “Skyline” name in the US – and might even oppose Ford’s application should it be accepted.

Ford itself is no stranger to trade mark appropriation. It has been reported (5) that Ford had wanted to use the GT-40 mark for its 2002 reboot of the legendary Le Mans winning model only to find that someone else had registered it. That someone was Safir Automotive, a company which had been building replica GT-40s since 1981 and had secured the rights to distinguish its cars (and later replacement parts for original GT-40s) from other replicas.

According to Automotive News (6) Safir sought USD$40 million from Ford in return for a license, which would have added another $9,900 to the production cost of each of the 4,038 Ford GTs built. Ford reverted to the GT name instead of returning to the negotiating table.

So what are the IP lessons here? In most countries trade mark rights can be secured by being the first to use a mark on or in relation to goods or services. If no-one has used the mark then the rights can be secured by the first person to apply to register. However most countries also employ a use it or lose it policy – which means that registrations which have not been used for a certain period of time can be revoked to keep the Register clear of “ghost” registrations.

In Nissan and Ford’s case it appears that rights were never secured. This left each of them vulnerable to another party using or registering the mark. Safir was able to maintain its GT-40 registration because Ford had let it establish a legitimate business selling replica cars, and subsequently car parts, under the GT-40 trade mark. Since Ford was not using the mark itself there was no conflict of rights and Ford was not able to challenge the registration.

In Nissan’s case, it appears to have made a conscious decision not to use the Skyline trade mark on cars in the US, leaving it vulnerable to Ford’s application. While Nissan has belatedly attempted to secure some trade mark rights, these are unlikely to have any effect on the validity of Ford’s application. Nissan may however be able to challenge the application if Ford’s use of “Skyline” will cause confusion in the market in light of Nissan’s residual reputation – assuming there are a sufficient number of Nissan Skyline loving car enthusiasts in the US.

Owners of valuable trade mark rights need to take a two pronged approach to protection which involves:

• Maintaining trade mark registrations for valuable brands; and
• Ensuring that those brands are genuinely used on the relevant goods or services.

For automotive brands use can be difficult – although JLR’s classic continuation programme (7) shows that it can be done successfully (and lucratively with the right automotive bloodstock).

Trade mark owners should also consider implementing policies to monitor and discourage unauthorised third party use of their marks. Had Ford intervened in Safir’s use of GT-40 at an early stage it almost certainly wouldn’t have encountered the same difficulties with its GT reboot.

As for Nissan, it’s not clear whether it will use this development as a prompt to review and protect other valuable brands which may have fallen into disuse. It is clear to me that if Nissan does decide to do so, the “Nissan Homy Extra Long”, “Nissan Cedric”, “Nissan Gloria”, and “Nissan Sileighty” will not likely be at the top of its list of brands to protect. While undoubtedly effective at the time, like my late 1980’s mullet, the seductive clarity of hindsight shows them to be less than fashionable.

[1] My track for testing the quality of many a stereo was “Inspection (Check One)” by Leftfield
[2] Who, incidentally, is now our Managing Partner.
[3] US TM No: 90823372
[4] The “Skyline” name actually predates Nissan. It was originally used by Japan’s Prince Motor Company. In the early 1960s Prince engineers wedged a straight-six into a four-cylinder family saloon to create the first “Skyline” model. Prince and Nissan merged in 1966, and the Skyline model continued to be developed into the Skyline GT-R.
[5] Why Ford abandoned the GT-40 name.
[6] How Ford’s GT-40 became just the GT.
[7] JLR’s classic continuation programme

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