Ford Loses Web Trademark Battle

A lawsuit filed by Ford Motor Company against e-commerce startup Model E was dismissed Monday, handing the custom-car ordering site a significant victory. The new company plans to use the recent media exposure to unveil more details about its “subscribe and drive” service.

On July 28th, Ford sued both Model E, based in Fremont, California, and its primary investor, Softbank Venture Capital. The automaker argued that the new firm’s name too closely resembled the trademarked name of Ford’s famous early Model T car. The company also said it had reserved the Model E name for its own in-house program that allows employees to buy discounted PCs.

Last week, the judge rejected a bid by Ford to win a restraining order against Model E.

High-End Buyers Targeted

Model E plans to offer customers the opportunity to lease high-end vehicles over the Internet. The company said its use of “e” stems from its e-commerce approach to car-ordering and its focus on build-to-order “enhanced” vehicles made by traditional manufacturers as well as future plans for its own line of “edge” vehicles.

CEO William Santana Li said he is confident the lawsuit, if brought again in a new venue, would continue to be found without merit. He noted that the company had tried to reach a settlement with Ford.

“Ford has known of our company since last year and never told us of any concern with the name until just recently,” said Li, a former high-ranking Ford executive. “We told Ford from the outset that we would be willing to discuss their concerns and attempt to reach a resolution.”

Benchmark Case?

Analysts point out that the dismissal of the lawsuit focuses on the fact that the suit was brought improperly in the state of Michigan, where Ford is headquartered, and does not comment directly on the merits of Ford’s claims.

Some even question whether Ford was wise to target Model E at all; the startup the company has reaped a windfall of free publicity while the company’s true trademark was not at stake in the case.

Forrester Research analyst Lisa Allen said because of the massive assault on trademarks caused by the explosion of the Web, smart companies should defend only true attacks on their intellectual property.

“Some level of infringement is becoming a necessary risk of doing business on the Web,” said Allen.

Free Launching Pad

Model E is now offering “invited guests” in San Francisco, California a chance to preview its services, which range from the design and production of custom cars to insurance, registration and maintenance. Services will also include a team of concierges who will pick up and drop off cars that need service. A full launch in that city is expected before early next year, though the company is hinting that the date could be moved up.

Model E is a major Internet play for the venture arm of Softbank, a Japan-based institution that has recently stepped up its Web presence in the United States.

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