Mobileye sued defendants (iOnRoad) for various claims. Mobileye makes single-camera-based Advanced
Driver Assistance Systems (“ADAS”), which warn drivers when they are drifting
out of their lane or are about to collide with an object in front of them.
iOnRoad makes an Android app that purports to perform similar functions. In this opinion, the court granted summary
judgment to iOnRoad for some claims, including all Mobileye’s patent infringement
claims, and denied it on trademark infringement and some false advertising
claims (also preserving related state law claims).
The alleged false advertising fell into two categories:
first, statements that allegedly claim that the iOnRoad app complies with
government and automotive industry safety standards “by describing the app as a
car safety app and by employing automotive industry terminology to describe the
app's functions.” For example, Google
Play’s description said that the app provided “Forward Collision Warning” and
“Lane Departure Warning,” which Mobileye contended were ADAS terms of art
connoting a minimum level of performance/safety in compliance with statndards
set by private industry and by the National Highway Transportation Safety
Administration. Independent tests,
Mobileye contended, showed that the iOnRoad app didn’t meet NHTSA or the
stricter private industry specifications.
However, iOnRoad didn’t expressly claim government approval.
Second, iOnRoad allegedly made false comparisons with
Mobileye and similar ADAS systems, such as, “iOnRoad is the affordable
alternative to expensive collisions avoidance systems such as Mobileye,” omitting
differences in performance.
Mobileye commissioned surveys to determine the extent to which
consumers perceived iOnRoad to be an app to increase driving safety by
preventing collisions etc., the extent to which iOnRoad ads created an
impression that the app met auto industry standards, and the extent to which
the ads created an impression that the app was the same or similar to $1000
systems used in luxury cars. The first
survey showed respondents—drivers who were smartphone owners—about the main
message of an iOnRoad ad, offering them a “temperature detection” option to
control for yea-saying. After netting
out yea-sayers, the surveyor found that 71.3% noticed the Forward Collision
Warning (FCW) feature and 43.7% noticed the Lane Departure Warning (LDW)
feature, and that 25.6% believed that the FCW feature complied with industry
standards, while 15.6% believed the LDW figure did so (if you only took the
percentage of those who noticed the claims who believed that they reflected
industry standards, the percentages increased to 35% and 34.3% respectively). For government safety standards, 24.1% and
14.1% believed the features complied with NHTSA (33.8% and 32.4% using the
alternate method).
iOnRoad argued that these conclusions were unreliable
because there was no evidence that respondents knew anything about the relevant
government or industry standards. The
court held that this “misses the point”—it was undisputed that iOnRoad didn’t
meet the NHTSA and industry standards, and whatever their requirements, the
survey measured the percentage of respondents who believed that it did
(whatever those standards happen to be).
The second survey involved a test group shown a Google Play
description of iOnRoad’s app stating, “Similar systems in luxury cars cost more
than $1,000 while iOnRoad is FREE,” while the control group was shown the same
ad with that statement omitted. Net of
the control, 38.1% of respondents noticed the statement, and 17.7% indicated
that they thought it meant that iOnRoad and similar systems in luxury cars “either
had the same features, employed similar technologies, or were substitutes for
one another.” Adding in those who thought that the statement meant the app was
a good deal raised this to 23.0% (and again, if you only look at those who
noticed the statement, the percentages were 45.6% and 56.7% respectively). These respondents were also asked how well
they believed the performance of the app compared to that of similar systems in
luxury cars. Fifteen percent of the test
group and 4% of the control had no opinion, but 9.2% of the test respondents
indicated that the app would perform the same or better than luxury car
systems. Again, the court rejected
iOnRoad’s argument that there was no evidence that respondents knew how luxury
car systems would perform: that missed the point, which was not to evaluate
actual differences but rather consumer perceptions.
Mobileye’s damages expert opined that if the ads lead
consumers to believe that the iOnRoad app is comparable to Mobileye and other
ADAS systems, Mobileye would be harmed (1) by consumers who used the iOnRoad
app, were disappointed, and lost faith in ADAS systems generally, believing
iOnRoad’s performance to be representative; since Mobileye has 60-80% of the US
ADAS market, this decreased demand for ADAS systems would harm it; (2) by
consumers substituting iOnRoad for Mobileye.
The court found the first harm to be impermissible unsupported
conjecture, but on the present state of the record allowed the second. However, the expert “declined” to quantify
the damages, opining that the bulk of the damage would come from harm to Mobileye’s
reputation, ultimately leading to lost sales.
The court found that claims based on the idea that the ads
implicitly claimed NHTSA approval were not allowed; under the relevant cases,
only literally false claims of government approval are actionable, rejecting
Mobileye’s argument that evidence of consumer confusion on the matter was
sufficient. A court will not impute a
representation of governmental approval in the absence of explicit claims, in
order to preserve the Lanham Act as “a focused consumer protection statute” instead
of “a wide-ranging vehicle for private enforcement of federal
regulations.” However, the logic of this
line of cases extended only to government
standards, not to implicit misrepresentations of compliance with private industry
standards. The problem of allowing
implicitly false misrepresentations of compliance with law is that it would “permit
private enforcement of government standards when Congress has not provided a
private cause of action and has instead entrusted enforcement to the relevant
public agency,” but that problem doesn’t exist when the standards aren’t set or
enforced by the government. Thus, the
claims about implicit misrepresentation of compliance with industry standards survived
summary judgment.
The second category of allegedly false ads were statements
comparing iOnRoad to Mobileye and similar ADAS systems while omitting
differences relating to safety and performance.
iOnRoad argued that none of the statements purported to provide an
exhaustive list of differences and that they weren’t shown to be misleading,
given the low level of survey respondents who answered that the systems were
the same, similar, or substitutes or that the app has the same or better
performance than ADAS systems; it argued that 20% should be the threshold for
finding a substantial percentage of consumers are deceived.
Mobileye argued that one statement was literally false—a
claim on iOnRoad’s website that one difference between the app and “similar
systems in luxury vehicles” was that iOnRoad “offer[s] much more information
besides beeps,” because Mobileye’s systems also offer information “besides
beeps,” and iOnRoad offered no features that weren’t also available in ADAS
systems such as Mobileye’s. Mobileye
also argued that the relevant figure from the comparative ads survey was 23%,
and that there was no 20% threshold.
(Further, Mobileye contended that the fact that iOnRoad removed many of
the challenged statements from its website tacitly admitted their falsity, but
FRE 407 clearly prohibited the introduction of subsequent remedial measures as
proof of culpability.)
The court initially found iOnRoad’s arguments persuasive,
since the statements didn’t purport to exhaust all differences between the two
products, and given Mobileye’s own argument in the trademark portion of the
case that the products were substitutes the idea that the products were
“similar” didn’t seem misleading. But on
closer review of the survey, viewed in the light most favorable to Mobileye,
the court looked at the 9.2% of consumers who believed that “Similar systems in
luxury cars cost more than $1,000 while iOnRoad is FREE” meant that the overall
performance of the iOnRoad app is equal to or better than that of similar
systems in luxury cars. There’s no hard threshold for misleadingness, and while
9.2% isn’t overwhelming, the court couldn’t conclude it was insubstantial as a
matter of law. Thus, a reasonable jury
could find that the comparisons between iOnRoad's app and similar systems in
luxury vehicles were implicitly false.
(For all these claims, the court also noted that the survey covered only
one ad, but held that the other ads identified by Mobileye were similar enough
in content that a reasonable jury could also find them false based on the
survey evidence.)
iOnRoad further challenged Mobileye’s evidence of harm. Its damages expert didn’t calculate any lost
sales, revenues, or profits; and iOnRoad argued that Mobiley had no reputation
among consumers to be harmed. Mobileye
argued that diminishing demand for a category of products in which Mobileye held
between 60-80% of the market was sufficient, and the lack of quantifiability
simply made the harm irreparable. The court agreed that Mobileye had shown
likely future injury sufficient to justify injunctive relief if Mobileye
prevailed on the other elements, but granted iOnRoad’s motion for summary
judgment on damages.
The trademark infringement claim also survived, though I
don’t get why. Mobileye began using its
mark in 2001 and registered it in 2006.
It also used the slogan “acts like a third eye on the road” in its
promotional materials for several years, though without a registration. “Viewing
the facts in Mobileye's favor, it appears that iOnRoad analyzed, monitored, and
imitated Mobileye's slogan, product terminology, performance, visual
appearance, sound effects, and overall trade image. The Court notes, however,
that Mobileye has not asserted a trade dress claim in this action.”
iOnRoad argued that MOBILEYE was suggestive: evoking
motion/transportation plus vision. Plus,
Mobileye had no direct evidence of consumer recognition, and its own survey
expert opined that it wasn’t well-known to the general consuming public. Mobileye,
Inc.’s yearly gross profits have never exceeded $1 million, and net profits
have never exceeded $62,000, while Mobileye Technologies, Inc. showed annual
net losses of more than $10 million.
The court rejected Mobileye’s response that MOBILEYE was a
fanciful neologism. However, Mobileye
argued that it had received a large amount of publicity and unsolicited press
coverage, had won numerous awards, and was frequently featured in industry
conferences. The court concluded that
there was sufficient evidence for purposes of summary judgment that MOBILEYE
was “moderately strong,” even though it was clearly suggestive and “plainly
evokes the essential characteristics of a vision-based automotive product.” “[W]hile the Court cannot conclude that a
reasonable jury would find the mark as strong as if it were fanciful or arbitrary,
the record also would not compel a reasonable jury to find the mark weak
either.”
As for similarity, there was very little. Mobileye argued that both marks evoked an
automotive eye, and that iOnRoad was similar to Mobileye’s (descriptive!)
slogan “a third eye on the road,” and that iOnRoad's app imitated many aspects
of Mobileye's features and marketing language.
But Mobileye didn’t have a trademark in its slogan and didn’t bring a
trade dress claim. And the marks shared
nothing beyond a single syllable and “an evocation of a vision-based automotive
product. This might lead consumers to believe that the goods sold under these
two marks belong to the same market, but is unlikely to confuse consumers as to
the source or sponsorship of the goods. The Court thus concludes that the two
marks are at best very weakly similar.”
(How can this not end the inquiry?
While the other factors may bear on confusion, something more than weak
similarity—especially similarity based on core descriptive elements—has to be
present for the other factors to matter, if we care about competition at all.)
iOnRoad unpersuasively argued that the products didn’t
compete, but of course they do, as its own comparative ads indicated. There was no evidence of actual
confusion.
As for intent, iOnRoad contended there was no record
evidence about why it adopted the mark.
Mobileye argued that iOnRoad’s deliberate copying of Mobileye’s trade
image was so egregious that it should shift the burden to iOnRoad to show lack
of confusion. Again, Mobileye’s claim
was for infringement of the work mark, not slogan or trade dress, and the court
already concluded that the two marks were at best weakly similar, “negating any
finding of deliberate copying.” However,
a reasonable jury “could find based on iOnRoad's surrounding conduct regarding
Mobileye's overall trade image that it adopted the ‘iOnRoad’ name with the
intent to capitalize on Mobileye's goodwill.”
(So, as I understand it: because iOnRoad copied elements that, as far as
we know on this record, are entirely in the public domain—Mobileye doesn’t seem
to have offered any evidence that its trade dress was nonfunctional or, even if
nonfunctional, distinctive—a jury could infer something about the
not-very-similar trademark? That doesn’t make any sense to me.)
iOnRoad’s product was of lower quality than Mobileye’s
system.
As for sophistication, iOnRoad argued that the car
manufacturers, fleet managers, and rental car companies who were Mobileye's
primary customers were sophisticated. Mobileye, defying precedent, argued that
this would actually make them more likely to make a mental association between
the two marks. “[W]ithout knowing much
more about the particulars of the market, this factor does not strongly favor
either side.” (This highlights another
lacuna in the case, which is that iOnRoad is competing directly for end
consumers of cars, while Mobileye is selling to sellers/renters of cars—there
are some courts that would (wrongly) find that Mobileye lacked standing to
bring a false advertising claim under these circumstances.)
The court found that, overall, mark similarity and lack of
actual confusion favored granting iOnRoad’s motion for summary judgment.
Consumer sophistication was neutral, and the remainign five factors—strength of
the mark, proximity of the products, “bridging the gap,” bad faith, and quality
of the products—weighed towards denying the motion. “Thus, although Polaroid analysis is not generally
reducible to a mechanical counting exercise, a clear majority of factors here
weigh in Mobileye's favor.” Also, strength, similarity, and proximity are
generally the three most important factors, and two of those three critical
factors favored Mobileye here. Motion denied.
(I … do not get this in the slightest.
If the marks are dissimilar, why doesn’t that overwhelm strength and
proximity? By this logic, Coca-Cola
should be able to sue any market entrant into the cola sector—after all, it has
strong marks and the products would compete!)
The trademark dilution claims failed. There wasn’t sufficient evidence that
Mobileye was famous or even widely known to the general consuming public, as
Mobileye’s own expert opined. “And if
that were not enough, the Court has already noted that the evidence is rather
weak that Mobileye's mark has even acquired secondary meaning.” (This would be a good case for fees, if not
some mention of Rule 11.) New York
dilution doesn’t require fame, but it does require an “extremely strong” mark,
along with “substantial” similarity greater than that required for
infringement: a substantial segment of the target group of customers must see
the two marks as essentially the same.
Mobileye couldn’t come close to satisfying this requirement.
Mobileye’s GBL § 349 claim for deceptive acts or practices
failed because the gravamen of such a claim must be consumer injury/harm to the
public interest such as danger to public health or safety, not mere competitive
disadvantage. Mobileye argued that
misleading the public about whether the app complied with government and industry
safety standards raised safety concerns. The court disagreed: even if consumers were
confused about compliance with relevant safety standards, Mobileye pointed to
no evidence that the app was actually dangerous or unsafe.
However, the other state law claims survived. The amorphous misappropriation cause of
action covers reaping where one hasn’t sown; it requires bad faith, and there
was enough evidence of bad faith (as recited above) for the claim to avoid
summary judgment. Likewise for unjust enrichment: it was enough for Mobileye to
claim that all iOnRoad’s revenue from downloads represented unjust
enrichment.
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