When Scituate Federal Savings Bank and Weymouth-based S-Bank merge later this year, one of the key issues the two organizations will have to decide is what to call their new bank.
In an interview with Banker & Tradesman earlier this month, Joseph Hayes, chairman of Scituate Federal, said the banks had engaged in a naming and branding study to better answer that question.
Choosing a new name for a bank is hardly as simple as it sounds on its face. Once the market research has been done and the relevant committees have settled on a shiny new name, management has to enlist the help of a trademark lawyer who will perform a clearance search on that name and help apply for the trademark registration.
Phi Lan Tinsley is a partner at K&L Gates in Boston who specializes in trademark law and intellectual property rights, and she has worked with Massachusetts community banks on a host of trademark issues that arise around a name change. In some cases, a bank might want to drop the “cooperative” from its name, or change a 100-plus-year-old name that has religious overtones.
First, it’s helpful to know exactly what a trademark is. Tinsley (and pretty much everybody else) defines a trademark as “a source indicator.” It’s a word, a symbol, a phrase, or basically any device, that tells the consumer that your goods and services originated with your organization.
Paradoxically, the more descriptive your trademark, the more likely you are to run into problems when you apply for a registration.
“One of the big problems that arises is when local banks have a name like Bank of North Andover, Bank of Lawrence, and you apply for a federal trademark registration, the first thing they will do is reject your application based on geographic descriptiveness. You are located in Lawrence or North Andover and you can’t own that,” Tinsley said.
“Our next step would be to say, ‘Yes, maybe it is descriptive, but nobody else in this area owns that name, we have used it for the last 100 years, and everybody knows it refers to this bank,’” she said. “If you can provide enough evidence and overcome that objection … you can get that registration.”
Nor is a merger the only circumstance in which a bank might change its name, tweak its tagline or revamp its logo.
Consider the case of Radius Bank, headquartered in Boston’s Seaport District. Formerly First Trade Union Bank, it began a rebranding process about a year ago and officially changed its name in fourth quarter, said Chris Tremont, the bank’s executive vice president of virtual banking.
“It was a rebrand to better portray who we think we are as an organization. It in no way meant that we were changing who we were serving. That was important, as we got together with the management team, making sure we got that point across, from the name itself to the new tagline,” he said.
The team ultimately settled on the name Radius Bank, with a tagline of “Built around you,” which Tremont said evoked the idea of putting their customers at the center of their focus, or of always staying within arm’s reach.
Importantly, the name is also not geographically specific. It can work well for the bank on the local level and as it expands its customer base beyond New England and New York, he said.
While Radius Bank is still awaiting approval for its trademark registration, Tremont expects no hurdles in that process.
Besides geographical specificity, bankers should be wary of the likelihood of confusion. Tinsley explained that “likelihood of confusion” is a big test in the world of trademark law.
“If you have a trademark and there’s a likelihood that it could be confused with another trademark, that’s a problem,” she said. “What we do is try to see what is out there before the client continues to apply for the trademark.”
That means you might want to steer clear of some of the most common words found bank names – for instance, People, Citizens, First or Community. (No disrespect intended.)
Sometimes banks with similar marks can peacefully coexist, Tinsley said. For example, if a Massachusetts bank’s name bears some resemblance to a Texas bank’s name, but neither has their sights set on nationwide expansion, then those banks could agree to co-exist with their similar names.
If, on the other hand, one bank moves into another’s territory and they have similar trademarks, that can cause problems. And if Bank A’s customer gets confused about the name and walks into one of Bank B’s branches, that is actual confusion. Often, banks are keenly aware of their peers with similar names for this very reason, Tinsley said.
Finally, she was clear on one last point: Use it or lose it.
“You actually have to protect your mark in order to keep it,” she said. “If I’ve had ‘Bank Titan’ for the last 50 years and I see everybody else around me using it and I never do anything to protect my mark, others have a really good argument for why I shouldn’t have it.”
