California CU Files Suit Against Another CU Over Its Similar Name

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LOS ANGELES-In the latest punch-up between credit unions over naming rights, Schools FCU last week filed suit in federal court against SchoolsFirst FCU for service mark infringement and unfair competition in the nearby credit union giant's 2008 change from Orange County Teachers FCU.

The $9-billion SchoolsFirst's "intentional use of a name so similar to Plaintiff's service mark has already caused substantial customer confusion," said the $110-million credit union in its suit, filed in the U.S. District Court for the Central District of California.

The legal dispute between credit unions comes as overlapping fields of membership continue to increase competition among credit unions, often confusing members and potential members because of similar names, Internet addresses, logos and advertisements. The new suit comes less than two weeks after California's Partners FCU filed a similar action against newly formed Partners CU in Denver.

In the new California suit, Schools FCU, based in Rancho Dominquez and chartered in 1939 as Los Angeles Schools FCU, says it has exclusively used the Schools FCU trademark in a variety of ways, including TV, radio, school fairs, print and the Internet, since dropping "Los Angeles" from its title in 2005.

The smaller credit union said the much larger competitor changed its name to SchoolsFirst in April 2008 knowing that Schools FCU had the service mark and exclusive use of the name in Los Angeles County. Four months before, in January 2008, the much larger credit union had applied for federal registration of the service mark SchoolsFirst Federal Credit Union with the U.S. Patent and Trademark Office and obtained registration in November 2008. In seeking the registration, Orange County Teachers "failed to disclose to the U.S. Patent and Trademark Office its knowledge of Schools FCU's prior and superior rights" to the service mark in Los Angeles County, according to the suit.

The smaller Schools FCU said it has asked SchoolsFirst FCU to cease and desist infringing on its service mark in Los Angeles County and elsewhere where the smaller credit union does business.

The smaller credit union is asking the court to order the credit union giant to stop using the mark and names SchoolsFirst Federal Credit Union, SchoolsFirst FCU, SchoolsFirst, and the Internet domain name schoolsfirstfcu.org in Los Angeles County and all other of its markets, and to pay it damages and court costs.

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