Commercial Sav. Bank v. Hawkeye Fed. Sav. Bank
| Decision Date | 24 March 1999 |
| Docket Number | No. 97-771,97-771 |
| Citation | 592 N.W.2d 321 |
| Parties | COMMERCIAL SAVINGS BANK, Appellant, v. HAWKEYE FEDERAL SAVINGS BANK, Defendant, and Commercial Federal Bank, Appellee. |
| Court | Iowa Supreme Court |
Michael G. Voorhees and Jeffrey D. Harty of Zarley, McKee, Thomte, Voorhees & Sease, Des Moines, for appellant.
Bruce D. Vosburg, William Jay Riley and Michael J. Leahy of Fitzgerald, Schorr, Barmettler & Brennan, P.C., Omaha, Nebraska, and James R. Van Dyke and James C. Werden, Jr., of Van Dyke & Werden, P.C., Carroll, for appellee.
Considered by McGIVERIN, C.J., and HARRIS, CARTER, NEUMAN and CADY, JJ.
Plaintiff, Commercial Savings Bank, appeals from a district court ruling denying its request for injunctive and declaratory relief concerning its common-law trademark infringement claim. In the district court The district court denied Commercial Savings' request for injunctive relief. We affirm.
Commercial Savings Bank asserted that it had a trademark in the name COMMERCIAL and its variants, and thus had the right to enjoin defendant Commercial Federal Bank from using the name COMMERCIAL in its business name in plaintiff's eight-county trade area.
This is a suit by plaintiff, Commercial Savings Bank (Commercial Savings), an Iowa bank with its main office in Carroll, Iowa, against another Carroll, Iowa, bank, Commercial Federal Bank. The obvious similarity in the names of the banks is the basis for the litigation.
Commercial Savings, with its main office in Carroll, Iowa, also has branch offices in Lanesboro and Dedham, all located in Carroll County. Since its beginning in 1917, Commercial Savings has operated as a bank under its chartered name "Commercial Savings Bank."
Commercial Savings is engaged in the banking business and sells banking products and services to its customers in the Iowa counties of Carroll, Crawford, Greene, Sac, Calhoun, Audubon, Shelby, and Guthrie. These products and services are marketed under the trade name and service mark COMMERCIAL SAVINGS BANK and also under service marks COMMERCIAL SAVINGS, COMMERCIAL BANK and COMMERCIAL (hereinafter collectively referred to as COMMERCIAL). Commercial Savings has never owned a trademark registered with a government body for any of those business names. 1
Commercial Savings' use of the foregoing COMMERCIAL marks in the eight-county area served by Commercial Savings was exclusive until 1991. At that time, Commercial Federal Mortgage Corporation, a subsidiary of defendant Commercial Federal Bank, began providing home mortgage loans throughout the state of Iowa, including in the eight-county region where Commercial Savings does business.
Defendant Commercial Federal Bank began business in 1887 in Omaha, Nebraska. Since that time, Commercial Federal has been providing banking services in Omaha and surrounding communities, including cities in western Iowa.
In 1972, Commercial Federal changed its name from Commercial Savings & Loan Association to Commercial Federal Savings & Loan and received a federal charter to that effect. In 1990, the name was changed again to its current form, Commercial Federal Bank.
In 1987, Commercial Federal obtained a registration from the United States Trademark Office for the mark COMMERCIAL FEDERAL which it began using in 1972. Subsequently, in 1994, Commercial Federal obtained federal registration of the "CF" logo, which has been used at all times since then by Commercial Federal in its advertising, brochures, and signs in conjunction with the name "Commercial Federal Bank" or the mark "Commercial Federal."
In August 1995, Commercial Federal merged with Conservative Savings Bank, including its branch office in Harlan, Iowa, in Shelby County. As a result, Conservative Savings Bank ceased to exist and the Harlan branch name was changed to Commercial Federal Bank. Commercial Federal then began competing with plaintiff Commercial Savings for customers in Carroll County, as On October 1, 1996, Commercial Federal merged with defendant Hawkeye Federal Savings Bank, which had its main office in Boone, Iowa, with branch offices in Carroll, Manning, Lake City, Madrid, and Ogden, Iowa. As a result of the merger, Hawkeye Federal Savings Bank ceased to exist and the names of all its branch banks were changed to Commercial Federal Bank. Commercial Federal Bank currently operates banks in Harlan, Carroll, Boone, Lake City, Manning, Madrid, and Ogden, Iowa, in plaintiff's eight-county trade area.
well as in Shelby, Audubon, and Crawford counties.
Plaintiff Commercial Savings filed a petition against defendant Hawkeye Federal Savings/Commercial Federal Bank on August 26, 1996, asserting claims for common-law trademark infringement, unfair competition, and injury to business reputation-dilution under Iowa Code section 548.113 (1995), and seeking declaratory relief concerning those claims. At the same time, Commercial Savings sought temporary and permanent injunctions to enjoin Hawkeye Savings Bank/Commercial Federal from using the mark COMMERCIAL, whether alone or in combination with other words or symbols, in connection with its banking products or services.
An evidentiary hearing concerning Commercial Savings' petition for temporary injunction was held on October 31, 1996. Patrick Moehn, president of Commercial Savings, testified concerning the bank's history. Moehn stated that a member of his family had served as bank president since 1923. Moehn also explained that the bank survived the bank crisis during the Great Depression and as a result had developed a solid reputation in the community. Moehn further testified that Commercial Savings is generally referred to by people in Carroll County and surrounding counties as "Commercial Savings," "Commercial Bank," and "Commercial."
Thomas Gronstal, president of the Carroll County State Bank in Carroll, Iowa, former mayor and lifetime resident of Carroll, also testified that residents of Carroll county frequently refer to Commercial Savings as "Commercial Savings" and "Commercial" and have done so as long as he can remember.
Copies of Commercial Savings' past newspaper ads and radio "spots" over the past eleven years were introduced into evidence. Most of these ads refer to plaintiff bank as "Commercial Savings Bank" or "Commercial Bank," rather than just the name "Commercial" alone.
Commercial Savings also presented evidence concerning alleged confusion generated by Commercial Federal's use of the word "Commercial" in its name. On July 11, 1996, Commercial Savings received a letter addressed to "Commercial Federal Savings Bank" from American Family Insurance. On August 6, 1996, Commercial Savings received a letter addressed to "Commercial Federal Savings" from an apartment complex in Carroll. Both letters were intended for plaintiff Commercial Savings and bore Commercial Savings' correct address, but the senders in each case added the name Federal to the address.
Employees of Commercial Savings also reported receiving telephone calls on September 23 and October 9 from unidentified individuals who stated in substance that they had called the wrong bank.
On October 11, Commercial Savings discovered that it had received an automobile title from the Carroll County Treasurer's Office that should have been sent to Commercial Federal.
In another example, on or about October 15, a Commercial Savings customer came into plaintiff's bank and asked an employee to explain the rates that were advertised in a local newspaper. The employee explained that the advertisement was for defendant Commercial Federal, not plaintiff. The customer stated that he only remembered seeing the word COMMERCIAL in the ad.
Commercial Savings reported receiving a telephone call on October 17 from a woman complaining about charges to her account. The caller eventually realized that her account On October 18, Commercial Savings received two letters addressed to Commercial Federal and bearing Commercial Federal's address. This was apparently an error on the part of the post office concerning misdelivered mail. On October 18 and October 29, Commercial Savings received insurance policies that incorrectly listed Commercial Savings as the loss payee. The proper loss payee was Commercial Federal and thus the policies should have been sent to Commercial Federal.
was at Commercial Federal, not Commercial Savings, and thus had called the wrong bank.
On or about October 21, the Carroll County State Bank incorrectly routed a check written on a Commercial Federal account to Commercial Savings for payment. Also in October, an automatic payroll deposit from the Pella Corporation in Carroll was incorrectly directed to Commercial Savings instead of to Commercial Federal.
Based upon this evidence, the district court denied plaintiff Commercial Savings' request for a temporary injunction on December 19, 1996. The court determined that although Commercial Savings used the term COMMERCIAL in connection with banking services prior to Commercial Federal's registration of its trademark in 1987, the name COMMERCIAL was rarely used alone. The court thus concluded that Commercial Savings failed to show the existence of a common law trademark.
Additionally, the court found that the name COMMERCIAL was a generic and descriptive term and that plaintiff failed to prove that it had established a secondary meaning with respect to the name COMMERCIAL such that a customer would identify that name with plaintiff as the provider of certain banking services. Finally, the court concluded that any evidence of actual confusion involving the two banks was "minimal at best" and that such confusion appeared to be reasonably manageable.
Following entry of this ruling denying a temporary injunction to plaintiff, the parties agreed that the court's December 19,...
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