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Posted February 18, 2020.
The trademark-infringement fight between Truist Financial Corporation and Truliant Federal Credit Union is going to the mat.
Truist is the result of the merger of SunTrust and BB&T. When those merging banks announced the Truist name last year, Truliant sued them for trademark infringement, contending consumers would be confused by the similar names.
Truliant serves numerous counties in central North Carolina and parts of Virginia and South Carolina. The combined Truist has many branches in those places.
Truliant recently moved for a preliminary injunction to prevent Truist from using that name pending the outcome of the litigation. While that sounds temporary, a preliminary-injunction decision usually ends the case. Typically, the loser realizes it’s beaten and gives up. Truist hasn’t yet filed its response to the motion, but both sides have made strong arguments.
Truist argues there are many other financial institutions across the country with names starting with “TRU.” It listed 24 in its answer to the lawsuit. It also argues its new logo looks nothing like the Truliant logo.
Truliant counters that none of those other financial institutions with names starting with “TRU” are in its geographic marketplace, so its customers are not accustomed to distinguishing between similar “TRU” names. Truliant claims to have already suffered some instances of actual confusion between it and the Truist name. Truliant also argues that the logo differences don’t fully distinguish between the two banks because people also hear brands orally, such as over the radio.
Truliant hired an expensive survey expert to back up its position. That expert reported substantial confusion in Truliant’s marketplace among those polled when the names are received orally. Truist certainly will hire a survey expert to paint a different picture.
The case could come down to an issue of law that hasn’t been addressed in depth by federal courts.
In deciding trademark fights, courts often look at how crowded the field is around the two competing trademarks. If there are many similar marks, a court usually will rule that consumers are accustomed to distinguishing between them, so there is no trademark infringement between the two marks at issue.
Federal courts haven’t thoroughly addressed what happens if the other similar names are outside of the geographic marketplace of the party claiming trademark infringement. Truliant will argue those out-of-marketplace names don’t matter because consumers in its marketplace don’t see them. Truist will argue that, in the age of the Internet and national advertising, they matter.
Even if Truist wins that argument and defeats Truliant in court, it will have weakened its Truist brand by arguing publicly that many banks with names beginning with “TRU” can coexist without trademark infringement. That will hurt Truist when it tries to attack other financial-service businesses using similar names.
Truist has even more problems. The federal Trademark Office provisionally rejected Truist’s initial application to federally register its Truist name as a trademark because of existing trademarks containing the word “Truist” for somewhat related services. Truist has not yet responded to that rejection.
Truist subsequently switched law firms and filed new trademark registration applications for its Truist name and logo. It’s likely the Trademark Office will again reject registering the Truist name for the same reason it rejected the first application. Thus, even if Truist can get past Truliant in court, it has a major hurdle to surmount to get federal mark registrations to protect its name.
I don’t know how this fight will come out or if Truist will stick with its new name. Truist announced it will delay the changing of its name at the bulk of its branches until August 2021 in order to complete “digital investments” it is making. Is it buying time to see how its trademark problems turn out?
The only thing I’m sure of is the lawyers for each side are earning a ton of money in this colossal battle.
Written on February 17, 2020
by John B. Farmer
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