Northwest Airlines Sues NWA FCU to Stop Use of "Company-Owned" Trademarks

MINNEAPOLIS – In the latest round of an ongoing, increasingly heated feud, Northwest Airlines recently filed a lawsuit demanding that NWA Federal Credit Union cease and desist the use of what it claims are company-owned trademarks. The suit, filed in federal district court on July 10, says in part that unless the credit union strikes a short-term deal to use the NWA name and trademarks, Northwest wants NWA FCU to stop using them by July 20. The airline also wants all use of the NWA name and trademarks by the credit union to cease in any case by March 21, 2004. NWA FCU President/CEO Paul Parrish said the suit is “groundless” and the credit union has used its present name since 1988 with the airline’s approval. “In 1996, we filed this trademark with the federal government and in 1997, our registration was granted (U.S. Federal Trademark Registration # 2,037,228). Northwest did not contest our trademark application when it was filed or at any time thereafter until the current dispute arose,” Parrish said in a statement on the credit union’s Web site. “First, this action is not unexpected,” Parrish said. “The objections raised in the last four months are a dramatic departure from the airline’s previous 65-year record of support and approval for our marketing efforts.” Parrish also pointed out that “even since this dispute began, Northwest has continued to accept our ads for publication in Passages (an internal company magazine) and has continued to provide us with printing services for our marketing material and other printed matter which carry the “NWA” name and visuals. The credit union has always paid Northwest for these services at market rates.” In its lawsuit, Northwest says that the credit union also recently sought to veto the use of “NWA” by a financial services partner of the airline. Northwest would not identify that partner. Northwest does have a relationship, though, with US Bank, which issues the NWA WorldPerks credit card, according to several published reports. The suit appears to be a fever pitch to a demand made in March by Northwest to the credit union seeking a royalty and licensing fee for the “free use of its logo and other company identifiers in NWA FCU advertising and promotions,” which Parrish said amounts to $6 million annually. Parish said the use of the Northwest images on credit union materials such as checks and debit cards “has been the practice of the credit union since our founding in 1938 and we submit such uses to Northwest for their approval.” The airline threatened to evict NWA FCU from its offices if the royalty and licensing fees were not paid, but it later agreed in May to extend the July 5, 2003 subleases of several properties occupied by the credit union to March 21, 2004 (CU Times, May 7 and 21). Wagner said NWA FCU is moving forward in its search for other locations. Northwest spokesman Kurt Ebenhoch said the airline wanted to resolve the trademark dispute amicably, but the credit union “had recently taken steps” that forced Northwest to sue. “Those steps have forced us into a position to establish that we are the owners of the (NWA) trademark,” Ebenhoch said, but he would not cite specific occurrences on what those steps have been. The suit comes nearly three weeks after NWA FCU agreed to be the depository institution for dues collections from union members belonging to the Professional Flight Attendants Association. More than 90% of Northwest’s employees have accounts with the credit union and 11,000 Northwest employees belong to PFAA. The union group filed a lawsuit against Northwest on July 3 seeking an injunction to force Northwest to permit union dues to be deducted from flight attendants’ paychecks. Ebenhoch said the suit was not prompted by NWA FCU’s agreement with PFAA. Northwest has laid off nearly 17,000 employees in the past two years and has cut annual expenses by $1.3 billion. The airline had also sought an additional $950 million in pay cuts from union and salaried employees. Meanwhile, NWA FCU continues to reassure members that services will remain “uninterrupted and unimpaired.” “I came in the office on Monday morning (four days after the suit was filed) and had received quite a number of emails from members supporting our position,” said John Wagner, NWA FCU’s vice president of marketing. Given the litigious turn the disagreement has taken, Wagner said the credit union has no intentions of changing its name. “We have a federally registered trademark, there are no plans to change our name,” Wagner said. -