Texas-Sized Trademark Trouble Brewing Over Name

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.

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