Mobileye sued defendants (iOnRoad) for various claims. Mobileye makes single-camera-based AdvancedDriver Assistance Systems (“ADAS”), which warn drivers when they are driftingout 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 summaryjudgment to iOnRoad for some claims, including all Mobileye’s patent infringementclaims, and denied it on trademark infringement and some false advertisingclaims (also preserving related state law claims).
The alleged false advertising fell into two categories:first, statements that allegedly claim that the iOnRoad app complies withgovernment and automotive industry safety standards “by describing the app as acar safety app and by employing automotive industry terminology to describe theapp's functions.” For example, GooglePlay’s description said that the app provided “Forward Collision Warning” and“Lane Departure Warning,” which Mobileye contended were ADAS terms of artconnoting a minimum level of performance/safety in compliance with statndardsset by private industry and by the National Highway Transportation SafetyAdministration. Independent tests,Mobileye contended, showed that the iOnRoad app didn’t meet NHTSA or thestricter private industry specifications. However, iOnRoad didn’t expressly claim government approval.
Second, iOnRoad allegedly made false comparisons withMobileye and similar ADAS systems, such as, “iOnRoad is the affordablealternative to expensive collisions avoidance systems such as Mobileye,” omittingdifferences in performance.
Mobileye commissioned surveys to determine the extent to whichconsumers perceived iOnRoad to be an app to increase driving safety bypreventing collisions etc., the extent to which iOnRoad ads created animpression that the app met auto industry standards, and the extent to whichthe ads created an impression that the app was the same or similar to $1000systems used in luxury cars. The firstsurvey showed respondents—drivers who were smartphone owners—about the mainmessage of an iOnRoad ad, offering them a “temperature detection” option tocontrol for yea-saying. After nettingout yea-sayers, the surveyor found that 71.3% noticed the Forward CollisionWarning (FCW) feature and 43.7% noticed the Lane Departure Warning (LDW)feature, and that 25.6% believed that the FCW feature complied with industrystandards, while 15.6% believed the LDW figure did so (if you only took thepercentage of those who noticed the claims who believed that they reflectedindustry standards, the percentages increased to 35% and 34.3% respectively). For government safety standards, 24.1% and14.1% believed the features complied with NHTSA (33.8% and 32.4% using thealternate method).
iOnRoad argued that these conclusions were unreliablebecause there was no evidence that respondents knew anything about the relevantgovernment or industry standards. Thecourt held that this “misses the point”—it was undisputed that iOnRoad didn’tmeet the NHTSA and industry standards, and whatever their requirements, thesurvey 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 Playdescription of iOnRoad’s app stating, “Similar systems in luxury cars cost morethan $1,000 while iOnRoad is FREE,” while the control group was shown the samead with that statement omitted. Net ofthe control, 38.1% of respondents noticed the statement, and 17.7% indicatedthat they thought it meant that iOnRoad and similar systems in luxury cars “eitherhad the same features, employed similar technologies, or were substitutes forone another.” Adding in those who thought that the statement meant the app wasa good deal raised this to 23.0% (and again, if you only look at those whonoticed the statement, the percentages were 45.6% and 56.7% respectively). These respondents were also asked how wellthey believed the performance of the app compared to that of similar systems inluxury cars. Fifteen percent of the testgroup and 4% of the control had no opinion, but 9.2% of the test respondentsindicated that the app would perform the same or better than luxury carsystems. Again, the court rejectediOnRoad’s argument that there was no evidence that respondents knew how luxurycar systems would perform: that missed the point, which was not to evaluateactual differences but rather consumer perceptions.
Mobileye’s damages expert opined that if the ads leadconsumers to believe that the iOnRoad app is comparable to Mobileye and otherADAS systems, Mobileye would be harmed (1) by consumers who used the iOnRoadapp, were disappointed, and lost faith in ADAS systems generally, believingiOnRoad’s performance to be representative; since Mobileye has 60-80% of the USADAS market, this decreased demand for ADAS systems would harm it; (2) byconsumers substituting iOnRoad for Mobileye. The court found the first harm to be impermissible unsupportedconjecture, but on the present state of the record allowed the second. However, the expert “declined” to quantifythe damages, opining that the bulk of the damage would come from harm to Mobileye’sreputation, ultimately leading to lost sales.
The court found that claims based on the idea that the adsimplicitly claimed NHTSA approval were not allowed; under the relevant cases,only literally false claims of government approval are actionable, rejectingMobileye’s argument that evidence of consumer confusion on the matter wassufficient. A court will not impute arepresentation of governmental approval in the absence of explicit claims, inorder to preserve the Lanham Act as “a focused consumer protection statute” insteadof “a wide-ranging vehicle for private enforcement of federalregulations.” However, the logic of thisline of cases extended only to governmentstandards, not to implicit misrepresentations of compliance with private industrystandards. The problem of allowingimplicitly false misrepresentations of compliance with law is that it would “permitprivate enforcement of government standards when Congress has not provided aprivate cause of action and has instead entrusted enforcement to the relevantpublic agency,” but that problem doesn’t exist when the standards aren’t set orenforced by the government. Thus, theclaims about implicit misrepresentation of compliance with industry standards survivedsummary judgment.
The second category of allegedly false ads were statementscomparing iOnRoad to Mobileye and similar ADAS systems while omittingdifferences relating to safety and performance. iOnRoad argued that none of the statements purported to provide anexhaustive list of differences and that they weren’t shown to be misleading,given the low level of survey respondents who answered that the systems werethe same, similar, or substitutes or that the app has the same or betterperformance than ADAS systems; it argued that 20% should be the threshold forfinding a substantial percentage of consumers are deceived.
Mobileye argued that one statement was literally false—aclaim on iOnRoad’s website that one difference between the app and “similarsystems in luxury vehicles” was that iOnRoad “offer[s] much more informationbesides beeps,” because Mobileye’s systems also offer information “besidesbeeps,” and iOnRoad offered no features that weren’t also available in ADASsystems such as Mobileye’s. Mobileyealso 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 ofthe challenged statements from its website tacitly admitted their falsity, butFRE 407 clearly prohibited the introduction of subsequent remedial measures asproof of culpability.)
The court initially found iOnRoad’s arguments persuasive,since the statements didn’t purport to exhaust all differences between the twoproducts, and given Mobileye’s own argument in the trademark portion of thecase that the products were substitutes the idea that the products were“similar” didn’t seem misleading. But oncloser 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 inluxury cars cost more than $1,000 while iOnRoad is FREE” meant that the overallperformance of the iOnRoad app is equal to or better than that of similarsystems in luxury cars. There’s no hard threshold for misleadingness, and while9.2% isn’t overwhelming, the court couldn’t conclude it was insubstantial as amatter of law. Thus, a reasonable jurycould find that the comparisons between iOnRoad's app and similar systems inluxury vehicles were implicitly false. (For all these claims, the court also noted that the survey covered onlyone ad, but held that the other ads identified by Mobileye were similar enoughin content that a reasonable jury could also find them false based on thesurvey evidence.)
iOnRoad further challenged Mobileye’s evidence of harm. Its damages expert didn’t calculate any lostsales, revenues, or profits; and iOnRoad argued that Mobiley had no reputationamong consumers to be harmed. Mobileyeargued that diminishing demand for a category of products in which Mobileye heldbetween 60-80% of the market was sufficient, and the lack of quantifiabilitysimply made the harm irreparable. The court agreed that Mobileye had shownlikely future injury sufficient to justify injunctive relief if Mobileyeprevailed on the other elements, but granted iOnRoad’s motion for summaryjudgment on damages.
The trademark infringement claim also survived, though Idon’t get why. Mobileye began using itsmark in 2001 and registered it in 2006. It also used the slogan “acts like a third eye on the road” in itspromotional materials for several years, though without a registration. “Viewingthe facts in Mobileye's favor, it appears that iOnRoad analyzed, monitored, andimitated Mobileye's slogan, product terminology, performance, visualappearance, 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: evokingmotion/transportation plus vision. Plus,Mobileye had no direct evidence of consumer recognition, and its own surveyexpert 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 profitshave never exceeded $62,000, while Mobileye Technologies, Inc. showed annualnet losses of more than $10 million.
The court rejected Mobileye’s response that MOBILEYE was afanciful neologism. However, Mobileyeargued that it had received a large amount of publicity and unsolicited presscoverage, had won numerous awards, and was frequently featured in industryconferences. The court concluded thatthere was sufficient evidence for purposes of summary judgment that MOBILEYEwas “moderately strong,” even though it was clearly suggestive and “plainlyevokes the essential characteristics of a vision-based automotive product.” “[W]hile the Court cannot conclude that areasonable 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 weakeither.”
As for similarity, there was very little. Mobileye argued that both marks evoked anautomotive eye, and that iOnRoad was similar to Mobileye’s (descriptive!)slogan “a third eye on the road,” and that iOnRoad's app imitated many aspectsof Mobileye's features and marketing language. But Mobileye didn’t have a trademark in its slogan and didn’t bring atrade dress claim. And the marks sharednothing beyond a single syllable and “an evocation of a vision-based automotiveproduct. This might lead consumers to believe that the goods sold under thesetwo marks belong to the same market, but is unlikely to confuse consumers as tothe source or sponsorship of the goods. The Court thus concludes that the twomarks are at best very weakly similar.” (How can this not end the inquiry? While the other factors may bear on confusion, something more than weaksimilarity—especially similarity based on core descriptive elements—has to bepresent for the other factors to matter, if we care about competition at all.)
iOnRoad unpersuasively argued that the products didn’tcompete, but of course they do, as its own comparative ads indicated. There was no evidence of actualconfusion.
As for intent, iOnRoad contended there was no recordevidence about why it adopted the mark. Mobileye argued that iOnRoad’s deliberate copying of Mobileye’s tradeimage was so egregious that it should shift the burden to iOnRoad to show lackof confusion. Again, Mobileye’s claimwas for infringement of the work mark, not slogan or trade dress, and the courtalready concluded that the two marks were at best weakly similar, “negating anyfinding of deliberate copying.” However,a reasonable jury “could find based on iOnRoad's surrounding conduct regardingMobileye's overall trade image that it adopted the ‘iOnRoad’ name with theintent to capitalize on Mobileye's goodwill.” (So, as I understand it: because iOnRoad copied elements that, as far aswe know on this record, are entirely in the public domain—Mobileye doesn’t seemto have offered any evidence that its trade dress was nonfunctional or, even ifnonfunctional, distinctive—a jury could infer something about thenot-very-similar trademark? That doesn’t make any sense to me.)
iOnRoad’s product was of lower quality than Mobileye’ssystem.
As for sophistication, iOnRoad argued that the carmanufacturers, fleet managers, and rental car companies who were Mobileye'sprimary customers were sophisticated. Mobileye, defying precedent, argued thatthis would actually make them more likely to make a mental association betweenthe two marks. “[W]ithout knowing muchmore about the particulars of the market, this factor does not strongly favoreither side.” (This highlights anotherlacuna in the case, which is that iOnRoad is competing directly for endconsumers of cars, while Mobileye is selling to sellers/renters of cars—thereare some courts that would (wrongly) find that Mobileye lacked standing tobring a false advertising claim under these circumstances.)
The court found that, overall, mark similarity and lack ofactual confusion favored granting iOnRoad’s motion for summary judgment.Consumer sophistication was neutral, and the remainign five factors—strength ofthe mark, proximity of the products, “bridging the gap,” bad faith, and qualityof the products—weighed towards denying the motion. “Thus, although Polaroid analysis is not generallyreducible to a mechanical counting exercise, a clear majority of factors hereweigh in Mobileye's favor.” Also, strength, similarity, and proximity aregenerally the three most important factors, and two of those three criticalfactors favored Mobileye here. Motion denied. (I … do not get this in the slightest. If the marks are dissimilar, why doesn’t that overwhelm strength andproximity? By this logic, Coca-Colashould be able to sue any market entrant into the cola sector—after all, it hasstrong marks and the products would compete!)
The trademark dilution claims failed. There wasn’t sufficient evidence thatMobileye was famous or even widely known to the general consuming public, asMobileye’s own expert opined. “And ifthat were not enough, the Court has already noted that the evidence is ratherweak that Mobileye's mark has even acquired secondary meaning.” (This would be a good case for fees, if notsome mention of Rule 11.) New Yorkdilution doesn’t require fame, but it does require an “extremely strong” mark,along with “substantial” similarity greater than that required forinfringement: a substantial segment of the target group of customers must seethe two marks as essentially the same. Mobileye couldn’t come close to satisfying this requirement.
Mobileye’s GBL § 349 claim for deceptive acts or practicesfailed because the gravamen of such a claim must be consumer injury/harm to thepublic interest such as danger to public health or safety, not mere competitivedisadvantage. Mobileye argued thatmisleading the public about whether the app complied with government and industrysafety standards raised safety concerns. The court disagreed: even if consumers wereconfused about compliance with relevant safety standards, Mobileye pointed tono evidence that the app was actually dangerous or unsafe.
However, the other state law claims survived. The amorphous misappropriation cause ofaction covers reaping where one hasn’t sown; it requires bad faith, and therewas enough evidence of bad faith (as recited above) for the claim to avoidsummary judgment. Likewise for unjust enrichment: it was enough for Mobileye toclaim that all iOnRoad’s revenue from downloads represented unjustenrichment.
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