Ford Anti-Squatting Efforts Out of Control

05/31/2006

In an effort to better protect the Mustang name, Ford Motor Company has taken to prosecuting companies with names incorporating a Ford trademark, including Mustang and nicknames like Stang and Pony. According to Mustang Monthly, companies that violate the rules are being presented with a letter directing the company to transfer internet domain names containing "Mustang" to Ford, as well as instructions to stop using Mustang in the company name. The letter also reportedly requests that all marketing materials, including brochures, banners, business cards, etc. be turned over to Ford so that they can be destroyed, and also directs the company to cut Ford a check for $5,000 in damages. Companies choosing not to comply could end up in a legal battle with Ford costing in excess of $100,000. Seems a little excessive, but it's within Ford's right and responsibility to protect its trademarks, right?

But what about the collateral damage? What of the companies that will undergo financial harm by halting advertising until the issue is resolved, or those small shops that don't have the marketing budget to reprint all of its materials? And what about Ford's efforts over the years to encourage aftermarket shops to produce product for the Mustang, thereby increasing the Mustang's attractiveness to car buffs looking to customize.

So what's the answer, dear readers? Is Ford going overboard, or is the company rightly protecting its property?

Thanks to Matt for the tip.

[Source: Mustang Monthly]

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Mustang mayhem
Stockton firm faces suit by Ford for trademark violation

 

Mustangs Plus owner Ron Bramlett sits with one of the Mustangs that he provides parts for Tuesday. The Stockton parts store was ordered by Ford Motor Co. lawyers to stop using the sports car name. Credit: DOUGLAS RIDER/The Record

STOCKTON - Mustangs Plus Inc., which has spent 25 years building up its specialty parts business under the Mustang moniker, now must tear that trademark from its business and Internet domain names or face a suit by Ford Motor Co.

Compliance with Ford's demands will negatively impact company value in the present and company sales in the future, said Ron Bramlett, a partner in family-owned Mustangs Plus at 2353 N. Wilson Way in Stockton.

"I was a young man when I started this. You work half your life and then have it snatched," said Bramlett, 52.

 
Ford also is trying to protect the value of the business it has built since 1903, said Gregory Phillips, a partner in the firm that drafted the cease and desist letter.

"The courts have recognized that a trademark name such as Mustang is an important asset of Ford Motor Co.," Phillips said.

The Feb. 16 letter from Howard, Phillips and Andersen, a Utah law firm representing Ford on intellectual property enforcement matters, asked Mustangs Plus to:

» Transfer to the automaker the registration for mustangsplus.com.

» Submit to government offices all forms necessary to discontinue registration of the Mustangs Plus name.

» Cancel Internet and telephone directory listings and advertising under the Mustangs Plus name.

» Turn over for destruction all signs, banners, business cards and collateral materials.

» Issue a check to Ford for $10,000 in damages.

Since 2000, the firm has sent "hundreds" of similar letters to businesses perceived to have trampled on Ford trademarks, Phillips said.

Ford has been successful in collecting damages in most of those cases.

While most businesses settle out-of-court, about 50 lawsuits have been filed, and all of those were resolved in Ford's favor, according to Phillips.

The scope of trademark infringement actions could be widened to include publications and organizations that use Mustang and other Ford trademarks, he said.

In the 1990's, Ford sent guidelines to selected restoration parts manufacturers, wholesalers and retailers, including Mustangs Plus, authorizing the use of trademarked names as long the business name was accompanied by a qualifying word or phrase such as "vintage" or "classic."

Bramlett and his partners believed Mustangs Plus met that criteria, and a decade of silence from Ford quarters deemed confirmation.

Bramlett believes that the use of the Mustang name by those unaffiliated with Ford amounts to free advertising.

 

Mustangs Plus owner Ron Bramlett sits in his golf cart Tuesday at his business that provides parts for the sports car. Ford Motor Co. is cracking down on independent companies, including the Wilson Way store, using its Mustang trademark. Credit: DOUGLAS RIDER/The Record

"I have to believe in those years Mustang was glad to have people use the name," Bramlett said.

That argument has been rejected by the courts, Phillips said.

Harry Pulliam, owner of Mustang and Muscle Parts in Oakdale, in the mid-1980's received a letter similar to the one recently delivered to Mustangs Plus.

"I told them a long time ago I would be willing to sell Chevy parts," he said.

Now, two decades later, a legal battle would hardly be worth his while.

"I would just quit," he said.

Intellectual property is a gray area of the law, said Gregg Meath, a Stockton attorney who teaches Internet and computer law at University of the Pacific's McGeorge School of Law.

Meath said that Mustang Plus' use of the trademark is likely fair since it is descriptive and does not imply affiliation with Ford.

"How else are they to tell people what it is they do?" he said.

But, he said, a court battle would be a "big guy vs. little guy" fight that would cost Mustangs Plus tens of thousands of dollars.

"We try to wear the white hats and be reasonable," Phillips said. "It's already bad when you have a big company come after a little company."

For now, Mustangs Plus and Ford are at a stalemate.

"We've spent some time with our attorney, who has spent some time with them. It's very costly and it's going nowhere," Bramlett said.

Phillips also voiced frustration with the lack of resolution.

"Ford is not trying to put this guy out of business. We've offered Mustangs Plus a reasonable transition period of three to six months.

Mustangs Plus partners, who include Bramlett's brother, David, will likely not sign the Ford agreement, viewing such an action as an admission of guilt,

But they have decided to rename the business using the word "restomod," a term referring to car restoration and modification that Mustangs Plus copyrighted.

The wording of the final name has yet to be ironed out, though: That decision must wait for another business to relinquish its hold on the "restomod" moniker.

Contact reporter Michelle Machado at (209) 943-8547 or mmachado@recordnet.com
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It appears to me that Furd isn't just happy with trying to crush Torrie, they now have every little Mom & Pop on their radar. I'm just wondering out loud if they even suspect there is a bigger picture to brand loyalty. 
From where I sit, guys like this and Torrie and countless others have been of tremendous help to Ford establishing "Brand Loyalty".
And Yes, VOD, before you launch, I fully understand they have the right to do it. But in the bigger picture, I'm wondering does it help or hurt??
Uncl Lar
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