Green Dot (GDOT) faces a legal headache as it rolls out its new mobile bank account.
The Pasadena, Calif., company has dubbed the product "GoBank," and it filed a trademark application to register that name. But now CoBank, a cooperatively organized agricultural lender in Greenwood Village, Colo., is objecting to the trademark application, saying that the two brands are too similar to each other.
In a document filed with the U.S. Patent & Trademark Office, CoBank argues that the "GoBank" name is likely to cause confusion in the market.
In an email to American Banker, Green Dot alludes to the fact that the two companies operate in different parts of the banking business. CoBank lends to agribusinesses and other rural industries, while Green Dot is a provider of consumer financial products.
Green Dot also notes that CoBank's filing threatens only its ability to obtain a trademark. "In no way will Green Dot be impeded from using the brand 'GoBank' in the marketplace regardless of the outcome," the company's statement reads.
Green Dot began offering GoBank on a widespread basis in late June. The bank account is designed to appeal to a more upscale, tech-savvy segment of consumers than Green Dot's prepaid cards do.
Larry Berlin, an analyst at First Analysis, wrote in a research note Thursday that Green Dot has two options in the trademark dispute. It can choose to fight CoBank, or it can change the name of its product.
"Green Dot is early in the marketing of GoBank, and we believe could conceivably alter its name without too much loss in marketing expense or brand equity at this time," Berlin wrote. "This would probably have a finite effect on expenses and thus earnings and cash flow."