Capital One Financial v. Drive Financial Services
| Decision Date | 12 May 2006 |
| Docket Number | No. CIV.A.1:06-279.,CIV.A.1:06-279. |
| Citation | 434 F.Supp.2d 367 |
| Parties | CAPITAL ONE FINANCIAL CORPORATION, Plaintiff, v. DRIVE FINANCIAL SERVICES, LP, and Drive Trademark Holdings, LP Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
Monica R. Talley, Esqure, Mark Sommers, Esquire, Douglas Rettew, Esquire, Finnegan Henderson Farabow Garrett & Dunner, Washington, DC, for Plaintiff's Attorneys.
Eric Weisbatt, Esquire, Buchanan Ingersoll, Alexandria, Donald E. Goodwin, Esquire, Monte M. Bond, Esquire, Godwin, Pappas, Langley and Ronquillo, Dallas, TX, for Defense Attorneys.
THIS MATTER is before the Court on Defendants Drive Financial Services, LP, and Drive Trademark Holdings, LP's (hereinafter collectively "Drive") Motion to Dismiss, or, in the Alternative, Motion to Transfer Venue. This case is a Declaratory Judgment action where Plaintiff Capital One Financial Corporation (hereinafter "Capital One") asks the Court to declare that Capital One's use of the trademark "DriveOne" (1) does not constitute trademark infringement under the Lanham Act, (2) does not constitute trademark dilution under the Lanham Act, and (3) does not harm Drive. The issue before the Court is whether to grant Defendants' Motion to Dismiss, or in the Alternative, Motion to Transfer Venue where Plaintiff had expended considerable effort preparing its program for launch, where the program was available to a set of Plaintiff's customers at the time Plaintiff filed its Complaint, where the Court's declaratory judgment ruling will settle fully the parties' controversy, and where a substantial amount of the action giving rise to the controversy between the parties took place in the Eastern District of Virginia.
Plaintiff, over the course of several years, has developed a program for car dealers and buyers where participating consumers select a vehicle of interest and input their contact information which is sent to the nearest participating dealer. Pl.'s Opp. to Def.'s Mot. to Dismiss, or, in the Alternative, Mot. to Transfer Venue at 1 (hereinafter "Pl.'s Opp."). The dealer then contacts the customer to schedule an appointment where the customer receives a pricing quote on his/her vehicle of interest. Id. After conducting focus groups and studies, Plaintiff decided to call its program "DriveOne" to leverage its Capital One trademark into the automobile industry. Id. at 1-2. Defendants, who provide financial services in the automobile industry, have used the mark "DRIVE ONE" in commerce since as early as February 20, 2006. Id. Upon learning of Plaintiffs intention to use the name "DriveOne" for its program, Defendants sent a cease-and-desist letter to Plaintiff on February 27, 2006, alleging that Drive owns, among others, the mark "DRIVEONE" and that Plaintiffs use of the mark DRIVEONE constituted actionable trademark and trade name infringement as well as actionable dilution of Defendants' mark. Id. at 2. Plaintiff subsequently filed this declaratory judgment action.
The Court denies Defendants' Motion to Dismiss, or, in the Alternative, Motion to Transfer Venue because Plaintiff expended considerable effort preparing its program for launch, Plaintiffs program was available to a set of Plaintiff's customers at the time Plaintiff filed its Complaint, the Court's declaratory judgment ruling will settle fully the parties' controversy, and a substantial percentage of the occurrences giving rise to the controversy between the parties took place in the Eastern District of Virginia.
This case is a declaratory judgment action where Plaintiff seeks a declaration from the Court that (1) Plaintiffs use of the trademark DRIVEONE does not constitute trademark infringement or false designation of origin under the Lanham Act, (2) that Plaintiffs use of DRIVE ONE does not constitute trademark dilution under the Lanham Act, and (3) that Drive has suffered no harm from Plaintiffs continued use of the mark.
In December 2002, Plaintiff conceived the idea for an automobile sales program. Pl.'s Opp. at 4. The idea generally involved using Capital One's consumer network to provide referrals to automobile dealers, who would offer consumers "no hassle pricing." Id. Throughout 2003 and 2004, Capital One worked on developing the service by conducting two pilot programs, one with AutoNation, the largest automobile dealership group in the United States, and one with CarMax, the largest "used" automobile retailer in the United States. Id. Based on the positive results from these programs, Plaintiff studied ways to further develop the program by using an Internet automobile locator component, where consumers could choose a car before approaching a preferred dealer for a pricing quote. Id.
During 2005, Plaintiff continued efforts to establish a website that included an automobile locator component. Id. at 5. Capital One purchased an ownership interest in the California Internet Company for $9.1 million and signed a contract with the California Internet Company to provide the technology and website infrastructure for Plaintiffs program. Id. After signing this contract, several of Plaintiff's groups in McLean, Virginia began extensive work on developing and implementing the program. Id.
During the fourth quarter of 2005, Plaintiffs Brand Department conducted consumer research to define the nature of the program, to identify the core messages of the program, and to select the name for the program. Id. at 6. The Brand Department, along with another company, designed, conducted, and evaluated eight consumer focus groups to determine what features of the preferred dealer program most interested consumers. Id. At the same time, the Brand Department designed and implemented two quantitative web-based surveys that studied consumer perceptions of the program. Id. Also around this time, the Brand Department performed a substantial amount of work on developing detailed marketing plans for the program, based in large part on the results of the focus groups and surveys. Id.
In October 2005, the Brand Department had the responsibility of selecting the name for Capital One's program and began working with a company called Name-Stormers on the project. Id. NameStormers generated over one hundred possible names and reported the pros and cons of each name. Id. at 7-8. In December 2005, Plaintiff selected several possible names for further examination from NameStormers' suggestions. Plaintiff reached a consensus that none of the suggested names created an adequate connection with the Capital One brand. In mid-December, Plaintiff selected the name "DriveOne" because of its inclusion of the term "One." Id. at 8. Plaintiff selected the word "Drive" to communicate that Capital One's program involves automobiles. Id. According to Plaintiff, at no time did any of the persons involved in the naming decision have any knowledge of Defendants' use of the name "DriveOne." Id.
During the fourth quarter of 2005 and the first quarter of 2006, Plaintiff trained its sales personnel about the program, created various dealer sales material, and approached numerous potential dealer participants in Atlanta, Georgia, Indianapolis, Indiana, Los Angeles, California and Miami, Florida. Id. at 9. Plaintiff also conducted several focus groups and surveys to hone the consumer marketing message for the program. Id. As part of the dealer education and promotion process, Plaintiff showed dealers various marketing materials bearing the name DriveOne. Id.
From February 11-13, 2006, a large number of dealers were exposed to the name DriveOne at the National Automobile Dealers Association (hereinafter "NADA") trade show in Orlando, Florida. Id. at 9-10. At the convention, Plaintiff displayed a poster for its DriveOne program. Id. at 10. That poster contained a pocket filled with brochures bearing the DriveOne mark. Id. On February 10, 2006, Capital One launched a website for dealers containing information about the program. Id.
Also during early 2006, Plaintiff continued its efforts to launch its DriveOne program, including development of the electronic signature authentication system for the website, setting up a call center for the program, finalizing graphics for the website, and preparing form e-mails for customers who sign up for the program, and creating contracts for dealers. Id. In late February and early March, 2006, Plaintiff began preparing various advertising materials for the DriveOne program for use after the program began. Id.
On February 27, 2006, Drive sent Plaintiff a cease-and-desist letter alleging that Drive owns the marks "Drive," "Drive Financial Services," "Drive D Design," and "DriveOne" and that Plaintiffs use of the mark constituted violations of trademark law. Id. at 11. The letter demanded that Plaintiff cease and desist from all uses of "DriveOne" or any similar marks and threatened to take formal legal action if Plaintiff did not comply. Id. From the inception of Plaintiff's program in December 2002 until the present, Plaintiff has spent approximately $3 million on the program through salaries, commissions, and payments to vendors, not including the $9.1 million that Plaintiff invested in the California Internet Company. Id. at 12.
During all phases of the development and implementation of Plaintiff's DriveOne program, the program involved various departments at Plaintiff's headquarters in McLean. Id. In selecting "DriveOne," five individuals from the Brand Department and one contract employee devoted substantial time working on the program. Id. The Department's activities account for a large portion of the total money Plaintiff spent on the program. Id. Most of the individuals central to program development, marketing, and naming issues are located in McLean, while the other brand...
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