The seemingly innocent 17th letter of the alphabet is at the center of a marketing maelstrom that has landed Audi and Nissan in court. In the suit, Nissan North America and its Japanese parent, Nissan Motor Co., charge that Audi's first sport utility, the Q7, infringes on the trademark of Nissan's Infiniti brand Q models. The suit, filed in March in U.S. District Court in Detroit, names Audi AG, Volkswagen of America and Audi of America and is headed for a non-jury trial next month.
Nissan is vexed with its rival's name, given that it has spent "hundreds of millions of dollars," according to its complaint, to promote the Q45, Infinity's flagship top-of-the-line sedan first introduced in 1989. The complaint states that by the end of 2004, Nissan had sold approximately 120,000 new Q45s in the U.S. (by comparison, Audi expects to sell a total of 80,000 cars in the U.S. this year).
Loss of face
Nissan's suit states it has four U.S. "Q" registered trademarks: one each for the Q45 (since 1991); the QX4 (since 1997); the New Q (since 2002) and the QX56 (since 2004). Audi's use of Q will cause consumer confusion and dilution of Infiniti's Q marque, it alleges.
Infiniti expanded the Q to upmarket SUVs in 1997, when it launched the QX4 luxury SUV, sold through 2004; it started selling the QX56 SUV last year.
Auto experts said that while the suit isn't likely to cost Audi much more than embarrassment should it lose-according to estimates it takes about $25 million to launch a new SUV-the outcome could establish legal policies for alpha-numeric vehicle names in the future.
"This is a tempest in a teapot," said John Bulcroft, president of consultant Advisory Group, who led marketing for Audi until the late 1970s. He said the company will likely have to change its marketing strategy, but the biggest damage should Nissan win would be "losing face."
Todd Turner, president of CarConcepts, suggested Audi would be best to change the name before ads and materials are developed. "It's not that big a disaster if they change the name at this moment."
Audi unveiled the Q7, set to go on sale in the U.S. next spring, at Europe's Frankfort auto show Sept. 12 and recently previewed the car to Detroit's auto press. There, Johan de Nysshen, Audi exec VP, said the SUV's name is derived from Audi's Quattro all-wheel-drive system. He declined comment on the litigation, confirming there was a "legal dispute" with Nissan and Infinti. Audi also has plans for a smaller Q5 SUV in a few years, court records show.
Nissan's complaint says it first notified Audi of America by letter in December about the alleged trademark infringement. Despite "settlement discussions" no resolution had been made by the time the suit was filed in March.
2006 Infiniti QX56
Engine: Standard V8
Drive: 4 wheel drive or rear wheel drive
Seating: 3 rows standard
Price: starts at $49,550
Engine: V8 (May ‘06) or V6 (Sept. 06)
Drive: All-wheel drive Quattro
Horsepower: 350 with V8; 280 with V6
Seating: 3rd row optional on V6
Price: Starts at $45,000*