C3 Patent and Intellectual Property Law

Jul082009 | Steve O'Donnell

Metro Bank sued after failing to clear a mark

My thanks to Metro Bank for making my last post on the importance of researching a brand before investing in it seem especially relevant.

As reported in the Central Penn Business Journal, Metro Bank has found itself on the receiving end of a trademark infringement lawsuit that could have easily been avoided.

Recently, Commerce Bank in central Pennsylvania changed its name to Metro Bank because their rights to use "Commerce" were expiring. During their time as Commerce Bank they used a bright red “C” as their logo. When the name changed to Metro, the bank decided to use a bright red “M” as their logo. At first blush, that sounds like a great idea because not only does the similarity ease consumers into the new brand, it is also different enough to distinguish the new Metro Bank from the old Commerce Bank. Unfortunately for Metro, Members First Federal Credit Union uses a very similar bright red “M” as their mark, and Members First had the foresight to trademark it.

Rebranding is never easy or cheap. I'm not sure how much Metro Bank spent to change their logo from the “C” to their “M,” but between all of the signs on their branches, their ATMs, their online presence, their stationary and business cards, as well as whatever they spent a designer to create the logo, they are probably out a substantial amount if they now have to redo all of it.

If they had simply called a trademark attorney first they would have discovered that Members First filed their application in 2006 and would have been struck by the similarity between what Members First was using and what Metro wanted to use. This is not a situation where reasonable minds could disagree on whether the mark was confusingly similar or not: both marks are bright red “M”s with similar breaks in the legs and both businesses are banks that serve the same areas. The article I linked to above additionally notes that the banks' advertising overlaps and, most damning, that customers have actually walked into the wrong bank.

Metro could have hired a trademark attorney to research the mark and apply for their own trademark for a fraction of what it is going to cost them to put this infringement lawsuit to rest and redo their logo. I would bet that they'll look a little more into clearing the next mark they decide to use.