INFORMATION
& TECHNOLOGY LAW
Banking
on a Name
August
2003
By
Susan
M. Richey*
Unlike most
other businesses, banks traditionally have confined
themselves to a short list of names under which they
market their services to the public. Banks have a long
and consistent history of choosing names that emphasize
their trustworthiness, e.g., “Guaranty Bank,”
their solidity and stability, e.g., “First National
Bank,” and their concern with the affairs of their
customers, e.g., “Farmers Bank.” As a result,
banks, in particular, must rely on creative uses of
their trademarks as well as on novel slogans in order
to distinguish themselves in the marketplace from competing
financial institutions.
When a bank chooses a trademark that incorporates a
word from the traditional short list of names, enforcing
that trademark against a potential infringer can prove
difficult if only because a court is likely to determine
that the mark is “weak.” For example, two
banks competing in east-central Kansas—First Savings
Bank, F.S.B. and First Bank System, Inc.—challenged
one another in federal court in 1996 over the rights
to use of the mark “FirstBank” in connection
with banking services. Despite the fact that First Bank
System owned a 1971 federal registration for the mark
“First Bank System,” the appellate court
held that First Savings Bank’s use of “FirstBank”
in the same geographic area, beginning in 1983, was
not an infringement because consumers of banking services
were unlikely to rely upon the word in distinguishing
one financial institution from another. In support of
this finding, the court cited numerous institutions
that utilized the word “First” as a part
of their names or as a part of a trademark under which
they advertised banking services. According to the court,
these multiple third party uses constituted “compelling
evidence of what most consumers would recognize from
experience; namely, that banks are wont to refer to
themselves as the ‘First.’” First
Savings Bank, F.S.B. v. First Bank System, Inc.,
101 F.3d 645, 654 (10th Cir. 1996).
One variation often utilized in bank names is a word
that reflects geographic locale, e.g., “Pacific
Bank.” Unfortunately, like the names on the banking
industry’s traditional short list, common geographic
indicators do not forge a strong identity in the minds
of consumers. In an illustrative case, Sun Banks of
Florida lost its bid to enjoin Sun Federal Savings and
Loan Association from using the word “Sun”
to advertise banking services in Sarasota County, although
Sun Banks had been first on the scene. The appellate
court found the word “Sun” to constitute
a weak mark because the records of the Florida Secretary
of State revealed 25 active financial businesses employing
the word “Sun” and 50 active financial businesses
employing a compound of the word “Sun.”
Sun Banks of Florida, Inc. v. Sun Federal Savings
and Loan Assoc., 651 F.2d 311 (5th Cir. 1981).
If customers do not tend to rely upon names from the
traditional short list or upon geographic indicators
to distinguish one banking institution from another,
how do consumers discern different “brands”
of banks? For the most part, consumers rely upon the
way a bank’s name is presented. As a consequence,
banks may present their written name and trademarks
using stylized lettering and one predominant color.
In addition, the trademark may be accompanied by a unique
logo or symbol. Citizen’s Bank, for example, utilizes
a distinctive “C” shaped logo along with
its name in green lettering. When a mark is presented
in an audio format, it can be accompanied by a unique
sound to solidify the identity of the business in the
mind of the consumer. The best current example of this
type of advertising is not related to bank services
but to computer equipment, i.e., the four-note chimes
that accompany the “Intel Inside” slogan.
Finally, a bank may utilize a signature slogan to set
it apart from similarly-named institutions. Recently,
in fact, a federal judge declined to prohibit Citizens
Financial Group from using the word “Citizens”
to conduct business in Western Pennsylvania despite
the long-standing prior existence of the Citizens National
Bank of Evans City in that locale. The court noted that
the Evans City bank had altered its advertising to incorporate
“not your ordinary bank,” the tagline previously
adopted by Citizens Financial Group, and that that action,
more than anything, promoted consumer confusion between
the two banks. In other words, the court recognized
that consumers were apt to distinguish between the two
institutions by focusing more on the tagline and less
on the common use of the word “citizens.”
Citizens Financial Group, Inc. v. Citizens Nat’l
Bank of Evans City, Case No. 01-1524 (W.D. Pa.,
June 25, 2003).
Name conflicts have come into sharp focus in the past
few years as more and more financial institutions seek
to establish an internet presence. Properly used, a
domain name can become a powerful trademark as witnessed
by the overwhelming marketing success of “amazon.com.”
Because it identifies a unique internet address, however,
a domain name can belong to only one entity. So, for
example, only one institution can own the domain names
“peoplesbank.com” or “greatervalleybank.com.”
Unfortunately, stylized lettering and unique logos and
sounds—none of which can be represented in domain
names—are not particularly helpful in resolving
domain name conflicts between competing financial institutions.
While slogans,
if short enough, may constitute a domain name, companies
generally prefer that their internet presence be designated
by the name under which they do business as opposed
to their advertising tagline.
In the end,
perhaps the best solution to name conflicts between
banks lies in the industry’s willingness to market
their services from a more diverse pool of potential
names.
*Susan Richey, Of Counsel, is admitted in California.
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