Oriental Financial Group Inc. v. Oriental

• Decision Date: 20 October 2010
• Docket Number: Civil No. 10–1444 (JAF).
• Citation: 750 F.Supp.2d 396
• Parties: ORIENTAL FINANCIAL GROUP INC., Oriental Bank and Trust, and Oriental Financial Services Corp., Plaintiffs,v.COOPERATIVA DE AHORRO Y CRÉDITO ORIENTAL, Defendant.
• Court: U.S. District Court — District of Puerto Rico

750 F.Supp.2d 396

ORIENTAL FINANCIAL GROUP INC., Oriental Bank and Trust, and Oriental Financial Services Corp., Plaintiffs,

v.COOPERATIVA DE AHORRO Y CRÉDITO ORIENTAL, Defendant.

Civil No. 10–1444 (JAF).

United States District Court, D. Puerto Rico.

Oct. 20, 2010.

Roberto C. Quinones–Rivera, Frank La Fontaine, McConnell Valdes, San Juan, PR, for Plaintiffs.James W. McCartney, Jean Gabriel Vidal–Font, Cancio, Nadal, Rivera & Diaz, San Juan, PR, for Defendant.

OPINION AND ORDER

JOSE ANTONIO FUSTE, Chief Judge.

Plaintiffs bring this action for federal service mark infringement under 15 U.S.C. § 1125(a); service mark dilution under § 1125(c); and cyberpiracy under § 1125(d). (Docket No. 1.) Plaintiffs also allege violations of the Puerto Rico Trademark Act of 2009, Law 169 of December 16, 2009,¹ and unfair competition and deceptive trade practices under 31 L.P.R.A. § 5141 (1990). ( Id.) Defendant answered and counterclaimed for relief (Docket No. 37), and Plaintiffs moved to dismiss that counterclaim (Docket No. 43).

Plaintiffs also moved for preliminary injunction (Docket No. 3), and Defendant opposed (Docket No. 12). Plaintiffs responded to the opposition (Docket No. 25), and Defendant replied (Docket No. 38). We held a hearing on that motion on September 15 through 17, 2010. ( See Docket Nos. 47–49.) At the end of the hearing, we asked all parties whether any objected to our conversion of the hearing into a bench trial on the merits of Plaintiffs' claims, as to liability only. (Hr'g Tr. 51–53, Sept. 17, 2010.) Plaintiffs affirmed that they did not object ( id. at 52–53), as did Defendant (Docket No. 52). This Opinion and Order, therefore, constitutes our Federal Rule of Civil Procedure 52(a) findings of fact and conclusions of law.

I.Factual and Procedural History

We derive the following facts from the parties' pleadings, motions, and exhibits (Docket Nos. 1; 3; 12; 25; 37; 38; 43), and from testimony and evidence proffered at the hearing.

A. Parties and Their Service Marks and Dress1. Plaintiffs

Oriental Financial Group Inc. (“OFG”) is a publicly-owned financial holding company organized and existing under the laws of Puerto Rico, with its principal place of business at 997 San Roberto Street, Professional Offices Park, San Juan, Puerto Rico 00926. (Docket Nos. 1 at 2; 37 at 2.) Oriental Bank and Trust (“Oriental Bank”) is OFG's main subsidiary and is a full-service commercial bank, with its main office located in San Juan, Puerto Rico, and with forty-three branches throughout Puerto Rico. (Docket Nos. 1 at 3–4; 37 at 2.) Oriental Financial Services Corp. is an OFG subsidiary and a Puerto Rico corporation engaged in securities brokerage and investment banking services. (Docket Nos. 1 at 2–4; 37 at 2.) Plaintiffs and their various subsidiaries originated in Humacao, Puerto Rico; to this day, Plaintiffs are generally perceived as Humacao-based financial institutions.

Plaintiffs offer financial services that are “customary for commercial banking institutions,” including checking and savings accounts, certificates of deposit, IRA accounts, personal loans, and credit cards. (Hr'g Tr. 17, Sept. 15, 2010.) Plaintiffs have approximately 105,000 clients, approximately 1,700 of whom reside outside Puerto Rico, and they advertise to Puerto Rico's general public. ( Id. at 19–20.) Their branches are located throughout Puerto Rico in areas of high population density, including San Juan, Ponce, and Mayagüez. ( Id. at 17.) Some of those branches were recently acquired from Eurobank, and Plaintiffs are currently converting them to bear Plaintiffs' service marks. ( Id. at 15–16.)

Plaintiffs first used “Oriental” in their corporate names via Oriental Bank's predecessor-in-interest, which operated under the name “Oriental Federal Savings,” beginning in 1964. (Docket No. 1 at 3.) Since then, Plaintiffs have used the term “Oriental” in connection with a variety of their businesses, services, and products. ( See id. at 4.) Plaintiffs registered various iterations of the term with the Puerto Rico Department of State Trademark Registry. (Hr'g Pls.' Ex. 6.) Most recently, in 2010, Plaintiffs applied to both that office and the U.S. Patent and Trademark Office to register “Oriental” for exclusive use in financial and banking services. (Docket No. 1 at 5.) In recent advertising, Plaintiffs have used only the word “Oriental” in marking their services, as opposed to the earlier mark of “Oriental Group.” (Hr'g Tr. 23–24, Sept. 15, 2010.)

Plaintiffs also use a particular trade dress in advertising their services. Principal among the trade dress features is the color orange, which Plaintiffs use to distinguish their brand from competing banks. ( See, e.g., Hr'g Tr. 47–48, Sept. 15, 2010.) Plaintiffs also adhere to a particular “look and feel and tone and manner” in their advertisements, which they describe as “clean” and which contain images of “people in different life stages.” ( Id. at 30, 32, 52; see also, e.g., Hr'g Pls.' Ex. 10.)

2. Defendant

Cooperativa de Ahorro y Crédito Oriental is a non-profit organization organized under the laws of Puerto Rico and duly authorized by the Public Corporation for the Supervision and Insurance of Cooperatives in Puerto Rico to engage in “banking business” under the principles of “cooperativism”—“a movement which is the driving force in the socioeconomic development of communities, small business and people/members who have been marginalized or ignored by commercial banking institutions.” (Docket No. 37 at 15.) Its headquarters are located at Calle Font Martelo, Humacao Centro Mall, Humacao, Puerto Rico 00742. ( Id.)

Defendant offers various banking services, including checking and savings accounts, certificates of deposit, IRA accounts, and limited loans and credit products. ( See, e.g., Hr'g Tr. 64–65, Sept. 16, 2010; Hr'g Def.'s Ex. 3.) It focuses on “low income customers” but does not serve that clientele exclusively. (See, e.g., Hr'g Tr. 60, 62–63, Sept. 16, 2010.) It has seven branches in Puerto Rico—two in Humacao, one in Loíza, one in Ponce, and three in Hato Rey. (Hr'g Tr. 51–52, Sept. 16, 2010; Hr'g Def.'s Ex. 3.)

Defendant first used “Oriental” in its corporate name in 1966, and it assumed its current name in 1973. (Docket No. 37 at 16.) It began using a shortened version of its name, “Coop Oriental,” in 1995. ( Id. at 18.) On March 6, 2009, Defendant applied to the Puerto Rico Department of State Trademark Registry to register “Coop Oriental” as a service mark. (Docket No. 37 at 18.) Defendant registered the current domain name for its website, “cooporiental.com,” in 2004. (Hr'g Tr. 49, Sept. 16, 2010.) It has since used that site to offer and provide online services to its members. ( See, e.g., id. at 63–64.) There is no evidence that Defendant has registered any other domain name.

Defendant also uses a particular trade dress in advertising its services. Until 2009, Defendant advertised itself using its full or shortened name, or both, in combination with pine trees, a symbol of the cooperative movement. ( E.g., Hr'g Tr. 37–38, Sept. 16, 2010; Hr'g Pls.' Exs. 23–24; Docket No. 38–3 at 11, 14.) The colors used in the logo were yellow, blue, and green, and Defendant used the color green in the signs at its branch locations. (Hr'g Pls.' Exs. 23, 33.) In 2009, however, Defendant “hired Concept Uno to design a modern logo,” which features an image of two interlocking hands, one brown and one orange. (Docket No. 37 at 18.) Defendant also began using predominantly orange in its advertisements, on its website, and on its storefront signs. ( E.g., Hr'g Pls.' Exs. 22, 25, 27, 28, 31; Docket No. 25–1 at 33, 37.) The term “Oriental” is now a more prominent feature in its logo—“Oriental” is larger than “Coop” and is in black font, while “Coop” is in orange. (Hr'g Tr. 38, Sept. 16, 2010; Hr'g Pls.' Ex. 21.) In addition, Defendant now advertises with a tone and feel similar to that of Plaintiffs. ( See, e.g., Hr'g Tr. 64, Sept. 15, 2010; Hr'g Pls.' Ex. 13. Compare Hr'g Pls.' Ex. 9, with Hr'g Def.'s Ex. 3 (featuring photograph of same family).)

B. Alleged Infringement and Legal Dispute

Beginning in 2009, Defendant launched an overhaul of its corporate image and a geographical expansion of its services ( e.g., Hr'g Tr. 35, Sept. 16, 2010), the combination of which, Plaintiffs claim, results in infringement on Plaintiffs' service mark and dress ( see Docket Nos. 3 at 2, 6–10; 25 at 3–4). The overhaul includes the implementation of the new logo, color scheme, and advertising campaign described above. ( See, e.g., Hr'g Tr. 52–64, Sept. 15, 2010; Hr'g Tr. 39–42, 68–69, Sept. 16, 2010.) As for the geographical expansion, since 2009, Defendant has opened two new branches in Hato Rey and its first branch in the southern part of Puerto Rico. (Hr'g Tr. 33–34, 51–52, Sept. 16, 2010.) Defendant is also preparing to build a new headquarters in Humacao. ( Id. at 31.)

In 2010, Plaintiffs began noticing and documenting incidents of consumer confusion between Plaintiffs' and Defendant's marks and services. In several instances, customers phoned or visited Plaintiffs' branches expecting to receive service on accounts they held with Defendant. ( See generally Hr'g Tr. 124–37, Sept. 15, 2010; Hr'g Tr. 3–21, Sept. 16, 2010.)

On December 9, 2009, Plaintiffs' attorney sent a letter to Defendant, demanding that Defendant cease and desist conduct allegedly violative of federal and Commonwealth trademark laws, including the use of “Oriental” in its service mark and website. (Hr'g Pls.' Ex. 37.) Following a failed attempt to settle the matter ( see Hr'g Tr. 4–5, Sept. 15, 2010), on March 25, 2010, Defendant sought declaratory judgment against Plaintiffs in a Commonwealth court (Docket No. 12 at 3). Plaintiffs successfully removed that case to this court, where it is currently pending. See Order Denying Motion to Remand to State Court, Cooperativa de Ahorro y Crédito Oriental v. Oriental Fin. Grp., Inc., No....