Several Credit Unions Embroiled in Trademark Lawsuits

At least five credit unions across the country are tussling in federal court over allegations that their names and slogans are too similar to competitors’ trademarks — or in some cases, over allegations that the competitors are the ones infringing on credit union trademarks, according to court documents.

Over the past 24 months, San Diego-based San Diego County Credit Union; Meridian, Idaho-based Capital Educators Federal Credit Union; Harrisburg, Penn.-based Pennsylvania State Employees Credit Union; Louisville, Ky.-based Park Community Credit Union and Texarkana, Texas-based Red River Employees Federal Credit Union have all filed court papers.

In May 2018, San Diego County Credit Union asked a federal court to declare that its “It’s not big bank banking. It’s better” slogan doesn’t infringe on a slogan (“CEFCU. Not a bank. Better.”) owned by Citizens Equity First Credit Union, which is based in Peoria, Ill. CEFCU, which allegedly had petitioned the U.S. Patent and Trademark Office to cancel the trademark on San Diego County’s slogan, later filed a counterclaim. The case is still working its way through court. San Diego County Credit Union has $8.4 billion in assets and about 412,000 members; Citizens Equity First has $6.2 billion in assets and about 343,000 members.

In a similar case brought back in February, Ohio-based The Park National Bank asked a judge for protection against Park Community Credit Union, which it claimed had threatened to sue if the bank used its name or any other name starting with the word “Park” in Kentucky and Southern Indiana. The credit union filed a counterclaim, and court records show the case is still working its way through the system. That credit union has $949 million in assets and about 87,100 members.

Last month, Capital Educators Federal Credit Union and Capitol Federal Financial Inc., which does business as Capitol Federal Savings Bank, got into a similar fight. The credit union asked for a federal court’s blessing to continue using the term “CapEd” despite the bank’s alleged claim that the word was too similar to its own “Capfed” moniker. Capital Educators Federal Credit Union has $741 million in assets and about 78,000 members.

And earlier this month, Los Angeles-based company LendingUSA filed a complaint against Pennsylvania State Employees Credit Union over disagreements about the similarity of its two slogans (“Financing life’s important moments” and “Financial important moments in life”) with the credit union’s “FinancingLife” slogan. Pennsylvania State Employees Credit Union has $5.6 billion in assets and about 459,000 members.

The oldest of the five cases involves Red River Employees Federal Credit Union, which has $964 million in assets and about 111,000 members. In that case, Alexandria, La.-based Red River Bancshares claimed it coexisted peacefully with the similarly named credit union until late 2017, when the credit union allegedly began targeting potential members in parts of Louisiana. At that point the names became confusing, the bank said, and it asked the court to keep the credit union from using its name outside of its original market area.

Marc Whitfield, who is a partner at the Taylor Porter law firm, which represents Red River Employees Federal Credit Union, said there are a few things credit unions can do to prevent trademark scuffles.

1. Get a federal trademark. Credit unions often can get some legal protection by using a slogan or mark consistently over time. But those so-called common law trademarks generally only get protection in the region in which a credit union markets its services. If getting a federal trademark is off the table, a state trademark might be an option, though credit unions operating in more than one state might need to get trademarks in more than one state. And again, if someone else gets a federal-level trademark on an item, you might have trouble using your slogans, logos or other marks outside your existing markets. “You’re kind of limited in your ability to expand at that point. You are limited to the areas you’re already marketing your service and already serving,” Whitfield explained.
2. Beware consumer confusion. If people are coming into a branch to open an account and they think they’re somewhere else, that’s a red flag. “That’s a pretty good indicator that there is some confusion about your trademark possibly,” he said.
3. Understand vigilance requirements. “Trademark law’s a little bit unusual,” Whitfield said. “It puts a burden upon the trademark owner that kind of essentially says that if you do not go out and police your trademark — and that means stopping everybody that you see coming along, or at least acting in a reasonable manner to stop everyone who’s coming along who starts to use very similar trademarks — if you don’t police it, then you will lose it and will find that it’s kind of fallen into the public domain.”
4. Don’t ignore threats to sue. Don’t bow down to someone if you have protected legal rights that allow you to do exactly what you’re doing, but be sure to maintain some perspective, Whitfield noted. “When you get that cease-and-desist letter, clearly the most important thing is to be responsive and to try to see what you can do to accommodate any concerns the [complainant] may have and to work out some resolution as quickly as possible if you can,” he said. “The litigation itself is extremely expensive, and it’s a big resource drain. Most people do not want to go through that. It is just very unpleasant.”