U.S. appeals court revives Fiat Chrysler defense in Bluetooth trademark case

A Fiat Chrysler Automobiles (FCA) sign is seen at the U.S. headquarters in Auburn Hills, Michigan, U.S. May 25, 2018. REUTERS/Rebecca Cook
  • Bluetooth standards group said automaker used trademark without permission
  • FCA will have new chance to defend against claims

(Reuters) - A U.S. appeals court on Wednesday gave Fiat Chrysler a new chance to argue that it did not violate a Bluetooth standards organization's trademark rights by using the Bluetooth name without permission.

The 9th U.S. Circuit Court of Appeals sent the case back to a Seattle federal court after finding a judge wrongly rejected defense arguments by automaker FCA US LLC.

Kirkland, Washington-based Bluetooth SIG Inc administers the Bluetooth wireless standard and owns "Bluetooth" trademarks. It sued FCA US LLC, now part of Netherlands-based Stellantis NV, for trademark infringement in Seattle federal court in 2018.

Bluetooth SIG argued FCA violated its trademark rights by marketing the entertainment platforms in Fiat, Jeep, Chrysler, and other cars as being Bluetooth capable without going through its verification process.

The Seattle court rejected FCA's argument that it should end the case based on the trademark "first sale" doctrine, which says trademark owners cannot assert their rights over a product after it has been legally resold. FCA said it bought the systems from companies that had verified them with Bluetooth SIG.

U.S. District Judge Richard Jones said the defense did not apply because Bluetooth SIG itself was not a "producer" covered by the doctrine, and because FCA only resold the systems as parts of its cars, not as standalone goods.

But a three-judge panel reversed Jones' decision in a joint opinion Wednesday, finding the defense can apply when a trademarked product is incorporated into a different end product like the systems in FCA's cars.

The panel said that the lower court took an overly narrow view of the doctrine, and sent the case back for new proceedings on the question.

Stellantis and Bluetooth SIG's attorney Peter Willsey of Brown Rudnick both declined to comment.

The case is Bluetooth SIG Inc v. FCA US LLC, 9th U.S. Circuit Court of Appeals, No. 21-35561

For Bluetooth: Peter Willsey of Brown Rudnick

For FCA: Judith Powell of Kilpatrick Townsend & Stockton

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Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com