Massachusetts bank puts
Canada’s TD in a tough spot
A U.S. District judge has issued a preliminary injuction barring TD Banknorth from using the TD Commerce name in all or parts of Massachusetts.
TD Banknorth had planned on using the TD Commerce name after completing its recent merger with a Commerce Bank based in New Jersey. But another Commerce Bank in Massachusetts sued, arguing that consumers would be confused if a new Commerce bank suddenly appeared (previous coverage from The Financial Brand here).
“I hate to think what could have happened if they actually started changing the signs on their branches.”
— David Massad, Chairman
Commerce Bank (MA)
TD Banknorth, who already has a significant presence in Massachusetts, had wanted to change its name to TD Commerce in a show of unity with its newly merged partner.
According to the Boston Globe, TD was going to first switch the names of Commerce branches in New York and New Jersey this year, and then change the names of TD Banknorth branches in New England — including Massachusetts — starting in 2009.
In the court ruling, the judge said the injunction would be “no greater than Massachusetts.”
That leaves TD Banknorth with three options:
- Operate with two names in different markets and spend the extra marketing dollars to support them.
- Choose an entirely new name for both banks. Very unlikely.
- Consolidate the banks under the TD Banknorth name.
The only option TD Banknorth can be seriously considering is #3. This will be a major blow to the merger strategy the two banks were pursuing: “TD + Commerce = TD Commerce. See, Commerce wasn’t ‘taken over.’ We’re partners. We’re equals.”
It’s a message that probably played well with the board of the Commerce Bank that TD acquired. In fact, the future name may have even been a major issue during merger talks. In all likelihood, they are very irritated.
The preliminary injunction is just the first step in a process that is bound to drag on for months, maybe even years. Next stop: Full-blown trial.
This leaves the name of TD Banknorth Garden, the venerated home of the Celtics, very much up in the air. At least if TD sticks with its Banknorth moniker in all markets, the name of Boston’s Garden won’t have to change…again. (At least not for a few more years, until TD’s current sponsorship expires.)
Bottom Line: It’s expensive going to court. It doesn’t matter how big you are. If you pick a name similar name to another financial provider, you’re asking for big legal problems – especially when you plan to tread that name out on their turf.