Last week, The Financial Brand reported that Arp State Bank in East Texas was changing its name to American State Bank. The article noted a number of other financial institutions who already use American State Bank as their name, including ones in Iowa, South Dakota and North Dakota.

But there’s already one in Texas too.

Someone from an American State Bank in Texas sent The Financial Brand an email correcting a hotlink in the article that had been mistakenly pointing to them.

Further research has revealed that, indeed, there are two banks planning to operate in the state of Texas under the name American State Bank.

The newcomer (formerly Arp State Bank) has three locations, all in East Texas. They were founded in 1911 and now have $100 million in assets.

The incumbent is a 60-year-old financial institution based out of Lubbock, Texas and has 35 Texas locations.

Reality Check: This is a big problem. It looks like about as clear a case of trademark infringement as there probably ever could be.

When The Financial Brand asked the incumbent American State Bank in Texas how they felt about the situation and what options they were considering, the answer was “no comment.”

Yikes.

Dave Deits, one of the nation’s foremost experts on financial trademark and legal naming issues, says this situation serves as a reminder to do your due diligence. “The process of adopting a new name or trademark — even merely expanding under an existing name or trademark — can have significant and long term consequences. It’s very important to analyze the legal rights of others, whether a federal registration might be useful and available, and how these things impact short- and long range plans.”

This isn’t the first time this year Texas banks have treaded on each other’s trademark turf. Back in August, The Financial Brand reported about a second Texas bank picking the name Vista. And while we’re on the subject of Texas imitators, don’t forget about this story.

Okay, sorry, this gets a little complicated. There was a Commerce Bank in New Jersey. But earlier this year, TD Banknorth took them over. That merger created a huge naming hassle — including a lawsuit from a Commerce Bank in Massachusetts — over the Commerce name. In the end, the Massachusetts bank prevailed, preventing the Canadian behemoth from using TD Commerce, the name it preferred.

Now, a Commerce Bank — this one in Pennsylvania — is merging with Philadelphia-based Republic First Bank. These newlyweds are opting for Metro Bank as their new name. The combined company will have total assets over $3 billion and more than 1,200 team members. The company will pursue an aggressive growth strategy with new stores in Central Pennsylvania, Southern New Jersey and other markets.

The trouble is, there is already a Metro Bank in Houston. And one in Alabama. And another in Florida. Oh yeah, and one more in Georgia.

A collection of Metro Bank logos from various financial institutions from around the country.
Notice the use of circles containing an ‘M’ or ‘M’ symbol in each of the logos.

But wait… There’s more.

There’s also a First Metro Bank in Alabama, an American Metro Bank in Illinois, and a US Metro Bank in California.

Reality Check: You shouldn’t use another bank’s name — ever.

1. It doesn’t help differentiate you.
2. It makes it harder for people to find you online.
3. It exposes you to all kinds of legal problems over trademarks.

Contrary to popular belief, it doesn’t matter if the bank is in another state. If you pick a name identical to another financial institution, you’re opening yourself up to a world of legal hurt. It doesn’t even have to be identical, as was the case with TD Commerce.

Bottom Line: If your bank or credit union is considering a name change, avoid new names that sound safe and familiar. Avoid them like the plague. It takes less than 5 minutes in Google to see what kind of trouble you can expect.

Fight looms, confusion inevitable as
two Texas banks now share ‘Vista’ name

“We changed our name to soar above the crowd…to set ourselves apart.”
– Security State Bank

A new website for Security State Bank & Trust says the bank changed names to “soar above the crowd” and to “set ourselves apart.” But there’s a problem. The name they picked, Vista Bank of Texas, is almost identical to another bank in the same state, Vista Bank Texas.

Key Question: Who was first?

It’s hard to say.

Vista #1: Vista Bank Texas
Service Area: 6 branches around Houston
Claim to Name: It doesn’t look like this bank had been using the Vista name for very long. They launched their current website in December 2007.

Vista #2: Vista Bank of Texas
Service Area: 8 branches around the Texas panhandle
Claim to Name: In their trademark application on file with the US Patent & Trademark Office, they say the first time they used the name was June 2008. (Click here to view the USPTO trademark entry.)

Bottom Line: This may be a case of unfortunate timing and a terrible coincidence, but these banks are in for big trouble. It doesn’t matter that they are 500 miles apart. In today’s wired world, people are going to get confused.

Prediction: Financial trademark lawsuit in 3…2…1…

And it all may boil down to a difference of just six months and the simple preposition “of.” Maybe one of them should have put “First” in their name so we’d know which was the First Vista Bank of Texas. Joking. Just joking…

A creative solution to the problem would be for the two Vista Banks in Texas to merge, or create some sort of shared branching concept. Maybe you’ve heard the old adage, “The quickest way to eliminate my enemy is to call him my friend?” Don’t hold your breath though. This isn’t very likely.

A credit union in California holds the trademark for the word “Vista” in the USPTO’s financial services category, but a merger in 2007 between Vista FCU and Partners Credit Union name may make the trademark moot (click here to view the USPTO trademark entry.) Because the merged credit unions kept the “Partners” name, it’s unlikely either of them will step-up to defend this trademark.

More on the “Vista” name:

• It appears that Security State Bank & Trust bought their new URL, www.vistabank.com, for around $2,000 from a cybersquatter. The domain had been put up for sale after another Vista Bank gave it up a few years ago.
• Ironically, Security State Bank & Trust was also a name that was shared by at least two banks — the one that just became Vista Bank of Texas and another one in Montana.
• There is another Vista Bank in South Carolina.
• Earlier this year, The Financial Brand wrote about a two-year old bank in California changing names to Sierra Vista.

Consider yourself on notice: If you are a bank or credit union using anything resembling this orange dot…

…look out. Orange circles may be enough for ING to take you to court next.

Last Wednesday, ING filed a trademark-infringement complaint in U.S. District Court against PNC Bank over use of orange balls.

Earlier this year, PNC launced a Gen-Y program called Virtual Wallet. The Virtual Wallet website uses orange circles for its main interface.

In its complaint, ING asserts that “a significant segment of the website prominently utilizes the color orange and orange-ball designs that are confusingly similar to ING Direct’s orange ball.” ING is seeking damages of greater than three times the amount that PNC has made using the orange ball logo, including interest.

ING filed for trademark protection on its orange ball design back in November, 2000. ING’s trademark application is specifically for orange circles “that are totally or partially shaded.” Since then, orange has become the predominant color of its Web site, retail banking locations and advertisements, according to the complaint.

PNC filed trademark applications for 9 different orange circle designs back in June, and two more in August.The last one was filed August 12, 2008, one day before ING filed its lawsuit.

PNC’s most recent trademark application is for “Punch the Pig,” a creative savings game. It says the mark “consists of a stylized orange circle with a stylized white piggy bank in the center and two blue concentric circles in the center of the stylized piggy bank.”

Key Question: Is ING Direct entitled to exclusive use of orange circles – used in any capacity – within the financial industry?

What do you think?

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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:

1. Operate with two names in different markets and spend the extra marketing dollars to support them.
2. Choose an entirely new name for both banks. Very unlikely.
3. 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.

TD merger triggers lawsuit; landmark stadium needs renaming

Renaming Boston’s Garden

The merger between TD Banknorth and Commerce Bank means the name of ‘TD Banknorth Garden’ will probably have to change.

“For sure the ‘Garden’ will remain there, and what version of ‘TD’ goes in front of it is the question,” said Bharat Masrani, TD Banknorth’s chief executive. Good call, because Celtics fans might close their accounts if you messed with their venerable ‘Garden.’

Changing the Garden’s name could cost $1 million or more, and that’s just for signs and graphics inside and outside the building.

As far as the bank goes, you can probably guess what its new name will be, especially considering TD’s history with naming. (Hints: TD Waterhouse, TD Ameritrade, TD Banknorth, TD Canada Trust.)

Okay, enough suspense. The new moniker will be ‘TD Commerce.’ Jennifer Carlson, public affairs officer for TD said the bank’s branding team did a thorough analysis, deciding that combining ‘TD’ with ‘Commerce’ is “the best of both worlds.”

But hold on a second…

Another ‘Commerce’ Sues

There’s already Commerce Bank & Trust in Massachussets, one of the states TD Banknorth is in. When they heard TD Banknorth was thinking about ‘TD Commerce’ as a new name, Commerce Bank & Trust figured they had to sue.

“We have no choice.
This is a tremendous risk.”
– Brian Thompson, CEO
Commerce Bank & Trust

“We have no choice. This is a tremendous risk to us,” said Commerce Bank President and Chief Executive Officer Brian Thompson in the Worcester Telegram & Gazette. “A name is everything in banking. It’s what you promote and it’s how you identify yourself.”

Commerce Bank & Trust has $1 billion in assets, 11 branches, and they’ve been around since 1955. Just the same, Commerce Bank & Trust would have a stronger case if they had a federally registered trademark on file with the U.S. Patent & Trademark Office. It doesn’t look like they do.

TD filed its trademark application for ‘TD Commerce’ on March 19, 2008.

New Name Gets Old Tagline

According to this article, the name change carries forward Commerce Bank’s slogan: “America’s Most Convenient Bank.” To support the tagline, TD is extending the hours of its Banknorth branches.

Also supporting the “most convenient” tagline is the newly combined branch network canvassing the east coast: 460 branches from Commerce and 600 from TD Banknorth.

The Times Union reports that the bank will underake an interior and exterior “rebranding effort” at all of its 1,100 branches. The bank also said it will launch a multimillion-dollar campaign to introduce the new name to consumers, including television, print, online and in-store advertising.

TD acquired the New Jersey-based Commerce Bank back in November for $8.5 billion. Commerce has $48 billion in assets. TD Banknorth, based in Portland, Maine, has $40 billion in assets, and is a wholly owned subsidiary of TD Bank Financial Group of Toronto.

This 23-page PDF from the U.S. District Court of Alabama should serve as a cautionary tale about what can happen if you choose a new name that’s too similar to someone else’s – especially when you’re in the same market.

It all started on March 26, 2005 when BF Goodrich Employees Federal Credit Union chose to become ‘The Credit Union of Alabama Federal Credit Union‘ (sic, there are indeed two references to “credit union” in the name). This irked ‘Alabama Credit Union,’ who immediately fired off a cease-and-desist.

Alabama Credit Union then appealed to NCUA, asking them to rescind the name change. The NCUA declined to get involved.

The Alabama Credit Union Administration protested The Credit Union of Alabama’s choice in name, saying it would “cause confusion and was not in the best interest” of either credit union.

One party sued another and vice versa. Alabama Credit Union accused The Credit Union of Alabama of:

• deceptive trade practices
• unfair competition
• common law trademark infringement

The Credit Union of Alabama counter-sued for:

• cybersquatting
• tortious interference
• mail fraud
• RICO violations
• fraudulent suppression
• unfair competition
• conspiracy

Alabama Credit Union was awarded a summary judgment on all points related to The Credit Union of Alabama’s countersuit.

At least one member of The Credit Union of Alabama isn’t too happy about all this legal wrangling. In a letter to The Tuscaloosa News, Jerry Logan said, “The money spent on this lawsuit could have been returned to the member-owners in more dividends and also to the employees in a well-deserved raise. Instead it has gone to an attorney.”

Key Question: How will the courts view the fact that there are 17 credit unions with the word “Alabama” in their name, including ‘Alabama Central Credit Union‘ and nine others whose names start with “Alabama?”

Reality Check: The NCUA may approve a name change, but that doesn’t mean you won’t get sued for trademark infringement. The NCUA only performs cursory examinations of trade names. It seldom – if ever – gets involved in trade name battles, even when they’ve okay’d a new name under dispute. The US Patent & Trademark Office oversees all federal trademarks, not the NCUA.

Bottom Line: Which option do you think would cost more? Hiring an experienced naming firm? Or settling these lawsuits…and potentially having to rename again?

Citizens First is apparently the second ‘Citizens Something’ in Michigan.

An article in Crain’s Detroit Business reported that Flint-based Citizens Republic won a preliminary injunction barring Citizens First from using the “Citizens” name at its four branches in Oakland County

Citizens was founded in Flint in 1871, and became Citizens Republic in 2006 after its merger with Republic Bancorp.

Citizens Republic is the largest bank-holding company in Michigan, with $14 billion in assets. Citizens Financial is the ninth-largest bank in the U.S., with more than $128 billion in assets.

Bill Fealko, a lawyer for Citizens First said they will appeal Tarnow’s ruling.

William Hartman, Citizens Republic’s president and CEO said that when Citizens First bought a rival bank in his backyard back in 2004, “we asked them not to rename it Citizens, but they decided to go ahead.”

“With all the bank mergers and acquisitions going on, everyone wants to change names, and you’re going to be seeing more of this,” said Citizen Republic’s attorney Glenn Forbis.

Next, Citizens Republic will take on banking giant Citizens Financial, which wants to change the name of its 122 Charter One banks in Michigan to RBS Citizens Bank.

Bottom line: Lawsuits are expensive and time-consuming, so do yourself a favor and stay away from names like “Citizens,” especially if there’s a chance you’ll end up going head-to-head.

Picking names that sound safe might not be safe at all. If your name looks or sounds like someone else’s in the financial industry, you could find yourself in a heaping pile of trademark problems.

Besides, who wants a me-too name? After all, some of the world’s the most successful brands have unique, distinctive names.