7 GM Lucky Number-Court Upholds Ruling for GM in Hummer Grille Case

DETROIT, Nov 18, 2002 Reuters reported that a U.S. appeals court on Monday upheld a ruling that the grille design of General Motors Corp.'s Hummer H2 sport utility vehicle does not infringe on DaimlerChrysler AG's Jeep brand.

DaimlerChrysler had sought an injunction last year to force GM to change the Hummer grille, saying it copies the seven vertical slots found on Jeep grilles since World War II.

A three-judge panel of the 7th Circuit Court of Appeals in Chicago said in an opinion released Monday that it agreed with a lower court, which found that DaimlerChrysler's claims "showed virtually no chance of success on the merits."

DaimlerChrysler spokeswoman Ann Smith said the company was disappointed with the ruling, and was reviewing its options. A spokesman for GM did not immediately return calls seeking comment.

The $50,000 H2, which went on sale earlier this year, is the first new vehicle from Hummer since GM acquired the brand name in 1999. It is part of an ambitious growth plan GM has laid out for high-profit SUVs. Hummer also builds the H1, a low-volume civilian model of the Humvee military vehicle that captured the public's eye during the Gulf War in 1991.

The dispute revolves around the shared history between Hummer and Jeep. The former American Motors Corp. purchased Jeep in 1970, establishing a military vehicle division it called AM General and a separate Jeep division for mass-market vehicles.

Jeep and AM General parted ways when American Motors sold both divisions in the early 1980s. AM General then developed the Humvee for the military, and later the Hummer for civilian customers. AM General, an independent company, still makes the Hummer, but GM owns the brand and marketing rights.

GM had filed its own lawsuit against Chrysler, charging that the automaker waived any claims it had on the grille by remaining silent in the years since the first Hummer H1 went into production in 1992.

While the H2 does not compete directly with Jeep vehicles, a future H3 model is expected to be priced at around $30,000, posing a direct challenge to Jeep. GM expects eventually to sell 35,000 to 40,000 Hummer H2s a year, compared with Hummer H1 annual sales of around 1,000.

Since the lawsuit began, Jeep has launched a new advertising campaign featuring a logo based on the seven-slot grille.