A federal district court in California has refused to enjoin an automobile manufacturer's use of its “Drive Wise” trademark, finding that an insurance company had not shown that “Drive Wise” infringed on its “DriveWise” trademark.

The Case

Allstate, the owner of U.S. Trademark Registration No. 3,946,209 for DRIVEWISE® (the “Drivewise Mark”), first used the Drivewise Mark on December 6, 2010. The registration became incontestable on April 14, 2016. U.S. Trademark Registration Nos. 5,140,358 and 5,140,359 for the Drivewise Mark were first used on December 6, 2010 for International Classes 35, 36, and 42 and on December 19, 2012 for International Class 9.

Allstate has used its Drivewise Mark continuously since it launched its “Drivewise Program” in 2010, and some form of Allstate's Drivewise Program has been available since 2010. The Drivewise Program became available in all 50 states and the District of Columbia in 2016 and, according to Allstate, it has over 1.1 million participants.

According to Allstate, it has spent more than $400 million developing and operating the Drivewise Program in the United States. Allstate also has said that it has invested an additional $47 million in paid media, including on local and national advertising, for the Drivewise Program.

Allstate's Drivewise system consists of a small device that plugs into a car's on board diagnostics II (“OBD-II”) port and that taps into the existing computer and accelerometer found in modern vehicles. The features offered through the Drivewise Program are (a) realtime speeding and braking alerts; (b) vehicle diagnostics and maintenance reminder; (c) post-trip feedback; and (d) reports on driving trends so a user can monitor his or her behavior over time.

Kia Motors Corporation (“KMC”) filed U.S. Trademark Application Serial No. 86/873,294 for “Drive Wise” on January 12, 2016 for International Class 12. On September 27, 2017, the U.S. Patent and Trademark Office issued a “Notice of Publication.” The notice stated, “[t]he mark of the application identified appears to be entitled to registration. The mark will . . . be published in the Official Gazette on [October 17, 2017] for the purpose of opposition by any person who believes he will be damaged by the registration of the mark.”

Allstate indicated that it intended to oppose the registration of the mark.

On January 12, 2016, KMC filed an application to register “Drive Wise” as a stylized design mark in International Class 12, in connection with a “drive assist and safety device and system.” It filed U.S. Trademark Application Serial No. 87/122,948 for “Kia Drive Wise” on August 1, 2016 for International Class 12.

KMA uses “Drive Wise” to market a suite of advanced driver assistance systems (“ADAS”) features in its vehicles available in the United States including (a) Smart Blind Spot Detection; (b) Blind Spot Detection; (c) Rear Cross Traffic Alert; (d) Lane Keeping Assist System; (e) Lane Departure Warning System; (f) Autonomous Emergency Braking; (g) Forward Collision Warning System; (h) Parking Assist System; (i) Advanced Smart Cruise Control; (j) Smart Cruise Control; (k) Surround View Monitor; (l) Dynamic Bending Lights; and (m) High Beam. ADAS features are technologically advanced vehicle components that directly interact or control the physical operation of the vehicle.

The company's stated purpose in selecting “Drive Wise” was to convey its technology's ability to assist with safe driving. The ADAS features sold under the Drive Wise name added between $1,000 and $3,000 to the price of a car.

Allstate filed a lawsuit for trademark infringement against Kia Motors America, Inc. (“KMA”) and KMC (together, “Kia”).

An advisory jury reached a verdict in favor of Allstate on the issue of likelihood of confusion. The U.S. District Court for the Central District of California then issued a decision on whether a permanent injunction should issue.

The District Court's Decision

The district court denied Allstate's request for a permanent injunction.

In its decision, the district court explained that, to prevail on its claim for trademark infringement, Allstate had to show that its Drivewise trademark was a valid, protectable trademark; that Allstate owned Drivewise as a trademark; and that Kia used Drive Wise without the consent of Allstate in a manner that was likely to cause confusion among ordinary consumers as to the source, sponsorship, affiliation, or approval of Kia's goods.

The district court quickly found that Allstate had demonstrated that “Drivewise” was a valid, protectable trademark, and that it owned “Drivewise” as a trademark.

The district court next decided, however, that Allstate had not carried its burden to prove that Kia's Drive Wise mark created a likelihood of confusion.

The district court reasoned that Allstate's Drivewise Mark was “conceptually weak” and that Allstate had not shown that its mark had acquired any market place recognition. It was not persuaded otherwise by the amount of money that Allstate said it had spent developing and operating the Drivewise Program ($400 million) and the amount of money it said it had spent on advertising ($47 million) it in the United States.

According to the district court, although Allstate's trademark registrations were incontestable, this did “not require a finding” that the mark was strong.

The district court also decided that Allstate's and Kia's products were not closely related, found no evidence that Kia had intended to confuse the public or derive goodwill by its use of a similar mark, and found no evidence of actual confusion or likelihood of confusion.

Moreover, the district court said, there was limited overlap between the marketing channels used by Allstate and Kia and little risk of future product line expansions resulting in direct competition.

The district court then concluded that Allstate had not met its burden to show that Kia's use of Drive Wise was likely to cause confusion among ordinary consumers as to the source, sponsorship, affiliation, or approval of its goods, and it denied Allstate's motion for a permanent injunction.