A federal appeals panel has greenlighted the use of a popular trademark claimed by two educational charities that both specialize in converting unwanted and junked cars into cash. With the ruling, a 10-year legal battle between them appears to be at the end of the road.

However, only one of them is happy with the result.

Kars4Kids, a Lakewood, New Jersey charity, first deployed its earworm 1-877-KARS-4-KIDS jingle in commercials that began airing locally in the New York-New Jersey region in 1999. The ads with precocious hipsters urging listeners to “donate your car today” were such a hit that they were expanded to radio and television stations nationally and eventually to the internet. The jingle has become a staple of pop culture ever since, earning mocking scorn from late-night comedians and radio shock jocks and on popular television shows from Saturday Night Live to Family Guy.

America Can! Cars for Kids (“America Can”), a charity in Dallas, Texas, claimed the ads infringed on its “Cars for Kids” trademark that it had registered with the state of Texas in 1989. Like its New Jersey counterpart, the Texas charity adapted the slogan to music in ads urging donors to “write off the car, not the kid” and later expanded the donation program to include a “CarsForKids.org” website.

The two sides eventually sued and countersued in 2014 and 2015 with each claiming trademark infringement and unfair competition. The U.S. District Court of New Jersey in Newark found in 2021 that the Texas charity’s trademark had been infringed by Kars4Kids to the tune of $10.6 million in damages. That amount later was reduced to $7.8 million after the U.S. Court of Appeals for the Third Circuit in Philadelphia remanded the case back to the district court for further fact-finding.

At issue was whether America Can’s delay from when it first served its counterpart with a cease-and-desist letter in 2003 to when it took formal legal action more than a decade later was sufficiently negligent to forfeit its right to recover damages. A three-judge panel of the U.S. Court of Appeals for the Third Circuit definitively answered that question recently when they nixed the award altogether and ruled with prejudice that the time lapsed was indeed sufficient to preclude all claims for monetary or injunctive relief.

“Both parties to this litigation engaged in unscrupulous activity” that included creating websites mimicking each other’s respective identities so as to mislead donors, the judges noted. “Neither party’s conduct in this matter was beyond reproach. But nor is there clear and convincing evidence that either party engaged in the type of egregious, unconscionable misconduct” sufficient to justify awarding damages, they wrote.

There’s big money in used car donations as evidenced by the $91.4 million in revenue received by Kars4Kids during 2022 and the $82 million in revenue received by America Can and its subsidiaries during the same period, according to their Form 990 filings with the Internal Revenue Service. Both have educational missions with Kars4Kids focusing mostly on Jewish education and America Can on remedial education for emotionally disturbed and at-risk youth.

Colin Weatherwax, CEO of America Can, said his group is considering an appeal. However, short of petitioning the appeals court for a reconsideration or hoping the U.S. Supreme Court agrees to take up the case, those options appear limited. “We are disappointed by the verdict from the Third District Court of Appeals in our lawsuit against Kars4Kids,” said Weatherwax, who reiterated his belief that his group had proved its case.

Esti Landau, chief operating officer of Kars4Kids, applauded the ruling. “While we respect Cars for Kids in Texas for its charitable work, we are thrilled the court recognized that we can continue to use all the goodwill and brand recognition we have built up in our name in Texas just as we do in every other state,” she said.

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Source From Non Profit Times