Ford Motor is throwing its brick-and-mortar weight
around with its lawsuit against Fremont-based Model E filed late
last month. With just a cursory glance at the facts related to the case,
Ford’s argument might hold some water; but the automobile maker, one way or
the other, will walk away empty-handed. At issue is Ford’s claim that the
name “Model E” is too close for comfort with its flagship Model T cars.
Model E offers car buffs custom-made
autos on the Web. The company buys preexisting cars from major automakers
and then soups them up based on customers’ specifications, with add-on
features that can range from a hands-free mobile phone to a hot-rod engine.
For a flat monthly fee, consumers can subscribe to options that include car
insurance, maintenance, and emergency roadside assistance.
The bad news for Ford is that yet-to-launch Model E is hardly what you’d
call a spring chicken. Backed by the deep pockets of Softbank,
Yahoo! , and E*Trade
,
the new start-up won’t likely be scared off by a bit of legal
saber-rattling, especially considering its reasonably defensible position.
For starters, Ford’s legal beagles filed its trademark infringement suit in
a Michigan Federal Court. Last week, Model E responded by filing a motion
to dismiss the suit claiming that a Michigan court doesn’t have
jurisdiction to hear the case. And, they’d be right.
Model E smartly made locale their first line of defense, arguing that since
the newcomer has only launched a limited rollout of its services to
consumers in the San Francisco Bay Area, Ford’s lawyers would have to
essentially give way to Model E’s home turf. Simply having a Web site that
can be accessed by Michigan residents constitutes little more than passive,
not active, communication. Legal precedent is on Model E’s side here, so
score one for the underdog.
Ford’s action isn’t necessarily your garden-variety trademark infringement
suit. But despite an apparent gray area that does leave some wiggle room
for interpretation by the courts, Model E is probably thanking its lucky
stars right about now. With a war chest somewhere north of the $15 million
range, Model E’s fledgling Web site will be treated to millions in free
promotion courtesy of Ford’s lawsuit.
With the tech-heavy Nasdaq meltdown putting a drag on cheap IPO capital,
these are the days of tight-fisted VC firms and struggling dot-coms. The
challenge for bootstrapping entrepreneurs is to be more selective and
creative with their piggybanks. With marketing costs eating the bulk of a
typical upstart’s budget, these days, a good old-fashioned brouhaha can be
the next best thing to a 30-second Super Bowl spot. And, the higher the
profile – the better.
Any questions or comments, love letters or hate mail? As always, feel
free to forward them to kblack@internet.com.
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