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Client Alert: Intellectual Property & Banking

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The More Things Change, the Higher the Risk of Infringement

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Expansion – Both Service-Wise & Geographically Can Create Infringement Risks

When banks that have been doing business in one particular geographic area decide to expand geographically or when banks have been offering one set of services for decades decide to start offering new additional services, such changes can create additional infringement risks from a trademark standpoint. Bank A may have been peacefully co-existing with Bank B in another state using a similar name for 100 years, but if Bank A decides to expand into Bank B’s state, that geographic expansion could create consumer confusion and thus, create a trademark infringement risk for Bank A. The same is true if Bank A historically had not offered small business loans, but recently decided to offer them. Adding services could bring Bank A into conflict with another entity that Bank A had previously peacefully co-existed with because its services did not include small business loans. If you want to expand geographically or service-wise, you should search your bank’s name in those new geographic areas and in those new service categories to make sure that you are not going to run into significant legal problems.

Trademarks – Distinctiveness, Search & Registration to Lower the Risks

A trademark is meant to identify source to consumers. The strongest marks are fanciful (a coined term like PEPSI or KODAK), arbitrary (using a word that exists in connection with something completely unrelated to its traditional meaning like APPLE, a red fruit, for computers), or suggestive (using a word that requires imagination as applied to the specific services, such as Wachovia Bank, which is the name of the original settlement in the bank’s home region of North Carolina). Those are the best types of trademarks because they will typically be given the broadest scope of trademark protection against future infringers.

Marks that are afforded less protection are descriptive marks (a mark that describes a quality of the specified services like APPLE PIE for potpourri). In order for a descriptive mark to be protectable, you must use it for a long time and even then, its scope of protection might still be very limited. Thus, when choosing a name for a new service offering, a new slogan, or even a new bank name, make sure your new brand is distinctive.

Next, engaging a law firm to do the proper scope of trademark searching is essential. Make sure your mark is clear to use, clear to register and determine how well or how hard it is going to be to enforce your new mark or your expanded mark against future potential infringers.

Finally, register your marks federally. For example, the Ohio Valley National Bank founded in 1880, had been using this name for over 120 years before being forced to change it by one of its competitors. In 1994 another area bank changed its name to Ohio Valley Bank. The competitor speedily proceeded to obtain a federal trademark registration and the original Ohio Valley bank never contested the new bank's trademark rights. This left the original Ohio Valley with the choice to coexist under the same name or change their name, which they eventually did to Ohio Valley Financial Group. Federal trademark registrations typically make it much easier to enforce your trademark rights than relying solely on your long-term use of a mark.

Domain Names Pose Unique Risks

Along the same lines, banks must be sure to purchase the rights to their domain name prior to usage. Fiserv, a multi-billion-dollar cybersecurity tech provider for financial institutions, recently forgot to buy the domain used as a default in their systems’ email communications potentially exposing its clients’ user information to anyone with enough money to purchase the domain. Using an unregistered domain opens the door for phishing and for a lot of other attack vectors.

We Can Help You

Please contact us if you have any questions about selecting your new name, the adequacy of your searching strategy, and whether you want to register your mark with the USPTO.

COVID-19 Resources

We recommend reviewing the following pandemic-related business and legal considerations we have been discussing with our clients:

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