First Nat. Bank in Sioux Falls v. First Nat. Bank, South Dakota

• Decision Date: 01 October 1998
• Docket Number: No. 97-2278,97-2278
• Citation: 153 F.3d 885
• Parties: FIRST NATIONAL BANK, IN SIOUX FALLS, a national banking corporation, Plaintiff-Appellant, v. FIRST NATIONAL BANK, SOUTH DAKOTA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 885

153 F.3d 885

47 U.S.P.Q.2d 1847

FIRST NATIONAL BANK, IN SIOUX FALLS, a national banking

corporation, Plaintiff-Appellant, v. FIRST NATIONAL BANK, SOUTH DAKOTA, Defendant-Appellee.

No. 97-2278.

United States Court of Appeals,

Eighth Circuit.

Submitted Feb. 11, 1998.

Decided Aug. 21, 1998.

Rehearing and Suggestion for Rehearing En Banc Denied Oct. 1, 1998.

James E. McMahon, Sioux Falls, SD, argued (Douglas J. Hajek and Tamara A. Wilka, on the brief), for appellant.

Gene L. Lebrun, Rapid City, SD, argued (Richard P. Jeffries and Kutak Rock, on the brief), for appellee.

Before FAGG, JOHN R. GIBSON and MURPHY, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

The First National Bank in Sioux Falls appeals from one portion of the district court's order which granted relief against First National Bank, South Dakota under the Lanham Act and common law of service mark enjoining FNB South Dakota from using only the marks "First National" or "First National Bank" within a ten-mile radius of FNB Sioux Falls Bank, but denying plaintiff's request for an injunction against FNB South Dakota using its full legal name within the ten-mile radius. FNB Sioux Falls argues that the district court ¹ abused its discretion in denying the permanent injunction, and contends that in using its full name, First National Bank South Dakota would infringe on FNB Sioux Falls' right to use its common law service marks "First National" and "First National Bank" within the ten-mile radius. We affirm the judgment of the district court.

FNB Sioux Falls had operated in Sioux Falls, South Dakota since 1885. It received its first charter as the Minnehaha National Bank of Sioux Falls but changed its name to The FNB South Dakota is located in Yankton, South Dakota, approximately 90 miles southwest of Sioux Falls. It was chartered in 1963 and operated until 1994 under the name "Valley State Bank." It is currently owned by First National of Nebraska, Inc. In 1990 or 1991, Valley State Bank officials began discussing the possibility of establishing a branch office in Sioux Falls, and a feasibility study was completed in November 1993. Valley State Bank acquired an option to purchase 1.25 acres of land in Sioux Falls approximately one mile from FNB Sioux Falls' branch bank.

"The First National Bank and Trust Co." in 1929 and then to "The First National Bank in Sioux Falls" in 1952. It has used the names "First National Bank in Sioux Falls," "First National Bank" and "First National" continuously since 1952, except for a period between 1976 to 1985 when it used the name "First Sioux Falls." Since 1929, no other Sioux Falls banks have used the names "First National" or "First National Bank." For many years, FNB Sioux Falls has used the name "First National Bank" on the outside of its building, on checks and calendars, and in its advertising. It has adopted a service mark that includes a logo with stylized flying F's followed by the words "First National Bank, First in Service For over 100 Years," with the phrase "For over 100 years" in script. A copy of FNB Sioux Falls' logo is attached as Appendix A.

Valley State Bank applied to the Office of the Comptroller of Currency in April of 1994, for conversion to a national bank with the title "First National Bank South Dakota." It then exercised its land option and purchased the Sioux Falls property on June 16, 1994. The South Dakota Department of Commerce and Regulation Division of Banking approved the real estate purchase, and the Office of the Comptroller authorized FNB South Dakota to commence business as a national bank under its new name on July 19, 1994. On October 19, 1995, FNB South Dakota applied to the Office of the Comptroller to open a branch bank in Sioux Falls to be known as the "First National Bank South Dakota, Sioux Falls branch." FNB South Dakota's logo consists of a numeral "1" inside a nearly-closed circle above the words "first national bank south dakota", which are written in lower case letters. A copy of FNB South Dakota's logo is attached as Appendix B.

FNB Sioux Falls' officers made telephone calls to officers of the FNB South Dakota, followed by correspondence, with the request that FNB South Dakota refrain from using "First National Bank" or "First National" outside of Yankton. The parties were unable to reach an agreement, and this litigation followed.

After a bench trial, the district court held that FNB Sioux Falls, which had applied for federal service mark registration in January, 1995, did not possess a federal registration for the names "First National," "First National Bank," or "The First National Bank in Sioux Falls." The court, however, found that FNB Sioux Falls had used the names for a number of years, and that the names were descriptive rather than generic terms. The court further found that the marks had attained secondary meaning to consumers in the Sioux Falls market area and were associated in consumers' minds with FNB Sioux Falls. Accordingly, the district court concluded that FNB Sioux Falls holds common law service marks in "First National," "First National Bank," and "First National Bank Sioux Falls" within a ten-mile radius of FNB Sioux Falls. The court also found that FNB South Dakota's use of the marks "First National", "First National Bank", and "First National Bank in Sioux Falls", within a ten-mile radius of FNB Sioux Falls would create a likelihood of confusion, deception or mistake among an appreciable number of ordinary buyers as to the source or association between the two banks. The court therefore concluded that FNB Sioux Falls had established an infringement of its common law service mark and Lanham Act rights, and entered a permanent injunction enjoining FNB South Dakota from using the marks "First National," "First National Bank," and "First National Bank in Sioux Falls," within a ten-mile radius of FNB Sioux Falls' main office.

However, the district court went on to conclude that FNB Sioux Falls had not shown by a preponderance of the evidence that FNB South Dakota's use of its full legal This latter ruling is the only issue before us. FNB Sioux Falls argues that the district court abused its discretion in declining to permanently enjoin FNB South Dakota's use of its full name. FNB Sioux Falls contends that the court's holding that use of FNB South Dakota's full name would not infringe FNB's Sioux Falls common law marks is not supported by the record and is contrary to the court's findings. FNB South Dakota responds that the district court did not clearly err in its decision.

name, "First National Bank South Dakota" within the ten-mile radius would create a likelihood of confusion, deception or mistake among an appreciable number of ordinary consumers as to the source of or association between the two banks, particularly if the full name were used in conjunction with its "circle-1" logo. It concluded that, as to the FNB South Dakota's full name, FNB Sioux Falls had not established an infringement of its common law service mark and Lanham Act rights, or that FNB South Dakota is poised to engage in unfair competition.

FNB Sioux Falls agrees with "substantially all of the district court's findings of fact," and challenges only the district court's ultimate determination that FNB South Dakota's full name would not create a likelihood of confusion. Although the district court stated this determination under the heading "Conclusions of Law," we have previously held that likelihood of confusion is a factual question which we review only for clear error. See ConAgra, Inc. v. George A. Hormel & Co., 990 F.2d 368, 371 (8th Cir.1993). In ConAgra, we rejected an argument that the district court's evaluation of each factor is subject to the clearly erroneous standard of review but that the ultimate determination of the likelihood of confusion is a question of law to be reviewed de novo. Id. at 370 ( reviewing the development of authority in this circuit and contrasting it with other circuits applying the de novo standard). ² We likewise reject FNB Sioux Falls' argument that the district court's ultimate finding is inextricably bound up in its view of the law, and as such is a mixed question of fact and law subject to de novo review.

To successfully establish service mark infringement, FNB Sioux Falls bears the burden of proving that FNB South Dakota's use of its full legal name would create a likelihood of confusion, deception, or mistake among an appreciable number of ordinary consumers as to the source of or association between the banks' services. See Duluth News-Tribune v. Mesabi Pub. Co., 84 F.3d 1093, 1096 (8th Cir.1996). In determining whether a likelihood of confusion exists, the...