Richard Meltzer, somewhere in the essential collection of his writing, A Whore Just Like the Rest, gives himself credit for inventing what he calls "the gratuitous umlaut," the double dots over a vowel in rock band names, saying he suggested the idea to Sandy Pearlman, when the Blue Öyster Cult were being born; elsewhere, apparently - on the BOC's website - Alan Lanier takes credit for the same. I've never tried to confirm either version. According to the "metal umlaut" Wikipedia page - the very existence of which delights me, to say nothing of the host of great trivia therein; it is perhaps the funniest Wikipedia page I have yet encountered - the first use of the umlaut in rock was in fact in 1969, by Amon Düül II, but this was a non-gratuitous, ie. functional umlaut, and therefore doesn't really count... Also, from said page, I learn that the same year as the BOC debuted, apparently there's an umlaut over the "i" on the cover of a rare single pressing of Black Sabbath's "Paranoid," so there are in fact several possible double-barrelled points of entry. The debate appears unresolved.
Though I've spoken to him twice, I've never thought to ask Lemmy about where he sourced Motörhead's umlaut back in 1975; he might well have been aiming directly at Nazi-like typography/ iconography, and not joining on a sort of stylistic rock bandwagon (tho' they'd also opened for the BOC, so who knows). Maybe someday in the future I will get my chance...
It occurs to me - I'm doing a bit of Viking metal homework this afternoon - that, in fact, Ragnarök, the Viking apocalypse, is (besides Amon Düül), about the only non-gratuitous umlaut one sees in rock these days. Or am I just not listening to enough Germanic rock?
"It's like a pair of eyes. You're looking at the umlaut, and it's looking at you." - David St. Hubbins