In one of the largest US trademark damages cases ever, U-Haul recently settled with PODS Enterprises LLC for $41.4 million. This total includes an amount to help pay for “corrective advertising” that will attempt to restore PODS’ unique brand identity, which was lost due to U-Haul infringement of the PODS trademark and subsequent consumer confusion. U-Haul has also agreed to a permanent injunction in which it will stop using the PODS trademark altogether.
The events leading up to this hefty damages award began as PODS Enterprises LLC revolutionized the moving industry. PODS changed the industry model by renting portable storage units that were delivered to a customer’s home and then later picked up for transport to the customer’s new home. Prior to PODS entry into the moving market, the market was dominated by U-Haul, which offered traditional moving truck rentals. As PODS’ model increased in popularity it also helped change the moving vernacular, with people referring to mobile storage units as “pods”.
Adjusting to this new consumer demand, U-Haul began using “pods” terminology on its website to refer to its own line of portable storage units. This was a problem however as PODS owns several federal trademark registrations on “PODS” and “PODS Portable on Demand Storage” for moving and storage services. PODS filed a trademark infringement lawsuit against U-Haul in 2012. Following a two-week trial and 3 days of deliberation, a jury returned a verdict of $60.7 million in damages to be awarded to PODS.
A major portion of the award was to be used for corrective advertising. This is advertising that is intended to correct the public’s misconceptions about the source of PODS. The court mandated that the award be used to “confirm the fame, validity and enforceability of the PODS trademark.”
U-Haul attempted unsuccessfully to have the large verdict overturned and on October 10th entered into a settlement agreement with PODS to pay $41.4 million in damages, with a majority of it to be in the form of corrective advertising. Corrective advertising, though provided for in the law, hasn’t brought about much precedent in trademark cases to date, so this case may help set some precedent for how corrective advertising claims are handled in the future.
You may want to keep an eye out. Don’t be surprised if you see TV commercials and online advertising educating consumers on PODS unique branding.