Kars4Kids — the tri-state charity known for its ubiquitous “1-877-KARS-4-KIDS” jingle — got a big break in federal court this week when a judge reversed a $10.6 million trademark infringement decision against them.
The charity — which solicits car donations and uses proceeds to benefit local youth — was accused of infringing on intellectual property from a Texas nonprofit with a similar name and mission. Kars4Kids was ordered in 2019 to pay the $10.6 million verdict to America Can! Cars for Kids, a Texas-based charity founded several years before Kars4Kids, by a New Jersey federal judge.
But Kars4Kids appealed the ruling and, in an April 17 decision, Third Circuit Court of Appeals Judge D. Michael Fisher reversed the lower court ruling, contending that Cars for Kids had not filed its trademark infringement motion in a timely manner.
Cars for Kids, founded in 1992, sent a cease-and-desist letter to 1994-founded Kars4Kids all the way back in 2003 after discovering an advertisement for the latter in the Dallas Morning News, alleging infringement on Texas trademarks. Years of legal wrangling followed until Kars4Kids opted to sue Cars for Kids in 2014, for which Cars for Kids countersued in 2014.
But Judge Fisher said that Cars for Kids erred for too long in taking Kars4Kids to court over the allegedly infringing ads.
“[Cars for Kids] observed what it believed to be infringing behavior in 2003, so it sent a cease and desist letter,” wrote Fisher. “In the ten years that followed, however, America Can took no proactive steps to police the marketplace or protect its mark.”
In fact, Kars4Kids spent $75 million on advertising between 2004 and 2014, wrote Fisher, and collected $16 million in revenue from Texan contributors between 2008 and 2019, wrote Fisher. That in itself suggests that the letter was not enough to suggest Kars4Kids didn’t “reasonably believe it had the right to use its mark.”
“This prolonged and concerted investment in its brand and the related goodwill, without any further contact from America Can, constitutes classic economic prejudice,” wrote the jurist.
In a statement, Kars4Kids celebrated the ruling.
“The courts have essentially confirmed what the everyday consumer in any part of the country knows: Kars4Kids, with our iconic jingle, is the brand,” said Esti Landau, Kars4Kids’ chief operating officer. “While we respect the 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.”
Reached for comment, Cars for Kids CEO Colin Weatherwax said he is disappointed by the ruling and is considering an appeal.
“We are disappointed by the verdict from the Third District Court of Appeals in our lawsuit against Kars 4 Kids,” said Weatherwax. “Through multiple court proceedings we have sufficiently demonstrated America Can! Cars for Kids ownership of the trademark ‘Cars for Kids’ and that Kars 4 Kids has infringed upon this trademark. We are considering our options – including an appeal – at this time.”
Ahead of a court date in December, Weatherwax told amNewYork Metro that Kars4Kids was making about 8x the revenue of Cars for Kids all over America, “all off of our name.”
‘K-A-R-S Kars4Kids’
New Jersey-based Kars4Kids is known throughout the tri-state area and the nation for the oft-loathed earworm featuring young children imploring listeners to “donate your car today.” The commercial has been a fixture on TV and radio for over two decades.
The ubiquity of its advertising appears to have helped the charity become a behemoth: Kars4Kids raised over $90 million in revenue in 2022, according to its 990 tax form, compared to just $12 million by Cars for Kids.
Kars4Kids has, however, faced scrutiny over the direction of its donations: they mainly support sister group Oorah, which funds Orthodox Jewish summer camps and tuition assistance programs for private Jewish education, among other things. Although Kars4Kids describes itself as a “nonprofit Jewish organization” on its website, its ads don’t disclose the group’s religious affiliation.
In 2009, Kars4Kids settled lawsuits with the states of Oregon and Pennsylvania for $65,000 after those states’ Attorneys General claimed the group deceived contributors by failing to note donations only benefit certain children. In 2017, the Minnesota Attorney General reported that of the $3 million raised by the group in that state between 2012 and 2014, just $12,000 went to Minnesota kids.
Kars4Kids and Oorah have also invested and lost millions of dollars in the real estate market. In 2015, Oorah was sued by an Orthodox congregation called Young Israel of Eltingville, which claimed it had underhandedly and illegitimately purchased its Staten Island building to start its own congregation, purely for tax breaks. A judge ruled in favor of the plaintiff.
