Ford filed a trademark infringement lawsuit in federal court in Michigan last week over the name, the company confirmed. Softbank is named in the suit because it is Model E's biggest investor. Model E plans to launch later this year.
The automaker said the name Model E is too close to its well-known Model T, which rolled out of the factory in 1908 and became Ford's first mass success. Ford also said it has reserved the name Model E for an internal program that distributes computers to employees.
"We didn't want to do anything to postpone the new venture, but we have to protect our trademarks," said Kathleen Vokes, a Ford spokeswoman. "Any auto service with a name pattern similar to the Model A or T tends to be associated with that trademark."
A Model E executive said today that Ford's allegations are without merit.
"We are disappointed that they the brought the suit," said George Kim, Model E's chief business development officer. "Model E has nothing to do with the traditional one-size-fits-all character of the Model T...Yesterday, we filed a motion to dismiss the case on the grounds that the suit was improperly brought in Michigan."
Fremont, Calif.-based Model E plans to buy high-end vehicles from major automakers and customize the cars according to customers' wishes.
Instead of signing a traditional lease, people will "subscribe" to vehicles with an option to buy, according to the company's Web site. A flat monthly fee will cover registration, taxes, insurance, maintenance, repair and roadside assistance.
Customizations include pumped-up stereos, fancier wheels, engine upgrades and hand-free mobile phones. People will order the customizations over the Net, much like consumers can order personal computers tailor-made by Dell Computer, according to Model E's Web site.
The company also plans to offer its own brand of cars sometime in the future.
An initial launch of Model E is set for later this year in the San Francisco Bay Area, with an expansion in 2001 to other major cities across the country.
Ford joined General Motors and DaimlerChrysler in February to form a business-to-business automotive marketplace, Covisint, to boost purchasing leverage and to cut costs.
Covisint is awaiting regulatory approval from the U.S. Federal Trade Commission and the European Union. In recent weeks, it has signed on several large suppliers, including Delphi Automotive Systems and Dana.