GM sues Ohio company over rare 'Vette replicas

[ozpont]

GM sues Ohio company over rare 'Vette replicas

The Detroit News

The 1963 Corvette Grand Sport roadster is the rarest and arguably most important Corvette model ever made. Only five were built, and they sell for millions at auction.

But an Ohio company is being sued by General Motors for churning out replica versions that sell for less than $90,000.

The lawsuit was filed this month in U.S. District Court against Mongoose Motorsports LLC of Cuyahoga Falls, Ohio, which specializes in building replica 1984-88 GTP models and the legendary Grand Sport.

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The lawsuit is a bid by GM to protect valuable and lucrative trademark rights to an iconic brand beloved by auto enthusiasts, and it sheds light on a niche industry.

GM is suing for trademark infringement, claiming the iconic brand has been irreparably harmed by the ersatz sports cars, which the automaker says copy the Corvette's design -- curve for curve.

"This is not an homage," GM spokesman Tom Wilkinson said.

GM wants a judge to bar the company from making and selling models using the Corvette design; order the destruction of all labels, signs and ads bearing Corvette trademarks; and let GM inspect Mongoose's office and financial records. GM also wants unspecified financial damages.

Mongoose's Web site is a parts bazaar where enthusiasts can buy a Corvette Grand Sport rear emblem for $99.95, or an entire replica sports car. But Mongoose is not licensed to use the Corvette trademarks, according to the lawsuit.

Mongoose operations manager Gary Krause Jr. was unaware of the lawsuit until being contacted by The Detroit News.

"That's news to me," he said during a brief phone interview. "I really would rather not go into any detail."

His company couldn't have picked a rarer Corvette to replicate.

GM initially planned to build 125 for competition in world championship racing, according to the National Corvette Museum in Bowling Green, Ky.

But in early 1963, GM Chairman Frederic Donner canceled production after five had been built.

One of the five Grand Sports was listed at auction in January 2009 but the top bid of $4.9 million fell short of the reserve price, according to RM Auctions. The auction house later sold the roadster privately.

"They're unique cars. Hand-built, special-bodied," said Greg Wallace, spokesman for the GM Heritage Center. "It's probably the most valuable Corvette there is."

GM licenses companies that pay royalties to build everything from replica vehicles to belt buckles. It is a lucrative revenue stream, Wilkinson said.

One company is licensed to build the 1963 Grand Sport.

Duntov Motor Co. in Texas has an exclusive deal to produce authentic 1963 Corvette Grand Sports, starting at $189,000. They build about four sports cars a year.

Duntov also works with a subcontractor, Superformance LLC of Irvine, Calif., that plans to build about 100 street car models a year selling for about $90,000.

The company's Web site prominently displays the GM logo, designating it as an official licensed product, and acknowledges other unlicensed companies build Grand Sports -- but hints at a crackdown.

"We have been told these unauthorized manufacturers will be dealt with by the GM legal team," according to the Web site.

There are a number of companies worldwide that sell replica vehicles with varying legality.

Antique & Collectible Autos Inc. in Buffalo, N.Y., sells replica 1967 Cobra roadsters, but does not use the Cobra name or trademark.

"You can't do that," said Sonny Sajak, who is in charge of the company's sales.

For a while, the company sold replica Jaguars after obtaining the rights from the automaker.

"So it wasn't an issue," Sajak said.

Dennis Brunton of Bradenton , Fla., sells vehicles inspired by the Lotus 7 roadster. He designs each fiberglass part, rather than making a mold from existing Lotus 7 bodies. So there are significant differences between his model and the original.

Brunton's vehicles are bigger and longer, though they resemble the original Lotus 7.

"When you look at it, you know it when you see it," he said.

There is a legal principle guiding Brunton's approach, he said.

"My attorney described to me that if there's a spot on Bradenton Beach, a particular view, I cannot go there, make a picture of that view and say it is my intellectual property," Brunton said. "You have to go there and paint your own picture. You cannot stop anyone from making a car that looks similar, as long as they make it themselves."

On the Mongoose Web site, the company touts similarities between its replica and the original Corvette Grand Sport: "The GS frame, designed by Altair engineering, one of the largest aircraft-engineering firms in the country, replicates the original GS design, utilizes the suspension from 1988-96 Corvettes, with fully adjustable front and rear coil over shocks."

At the bottom of the Web site, in small print, it reads: "It is neither inferred nor implied that any item offered by Mongoose Motorsports is a product of, authorized by or in any way connected with any vehicle manufactured by General Motors. The Trademarks Corvette, Stingray, Chevrolet, GM and the Corvette emblems are Trademarks of General Motors Corporation."

GM pursued legal action against Mongoose because Wilkinson said the company is copying the Corvette's specific design and challenging the automaker's trademark.

"If we don't enforce this, we can lose control of our various trademarks," Wilkinson said.

rsnell@detnews.com (313) 222-2028

From The Detroit News: http://www.detnews.com/article/20100323/AUTO01/3230311/1148/auto01/GM-sues-Ohio-company-over-rare--Vette-replicas#ixzz0jBNRafGG