USABancshares in Philadelphia changed its name three months ago to USABanc.com, hoping to capitalize on the popularity of the Internet and establish itself as a realistic banking choice for tech-savvy consumers across the country.

Then the fireworks started.

The $250 million-asset company suddenly found itself tangled in a messy legal dispute with one that has $77 billion of assets and a similar name.

In early August, U.S. Bancorp asked a federal court in Minnesota to stop USABanc.com from selling certificates of deposit and other products on-line under its new name. U.S. Bancorp contended that the smaller bank's name confused customers and amounted to an intentional infringement of a trade name in use for more than a century.

But USABanc.com's chief executive officer, Kenneth L. Tepper, said he believes U.S. Bancorp's concern has more to do with fear than confusion. He said such goliaths would want to destroy their cyber-competitors because they are wary of anyone that can use the low overhead of the Internet to offer better rates.

"I think that old-line banks, as we call them, are starting to think that if we start paying 5% interest and only require a $1 (deposit) minimum, what do they have to do to keep their customers?" Mr. Tepper said.

U.S. Bancorp won the first round Aug. 17 when U.S. District Judge James M. Rosenbaum issued a restraining order preventing USABanc.com from offering products and services on the Internet under that name.

The smaller company, however, prevailed in a second ruling after the same judge ruled that the new name to be used for the holding company and Web site USABancShares.com was acceptable.

Still, it has been a rough few weeks for USABancShares.com. The week of the first ruling, its stock price tumbled 27%.

On top of that, thousands of Web customers were cut off from their money for nearly 24 hours after USABanc.com was forced to remove its name from the Internet. The blackout could have been much worse, Mr. Tepper said, had it not been for the abilities of his technical people, who revived the site under the USABancShares.com name.

But the technical snafu was just part of the problem. After going live under its new identity, the bank had to find a way to inform its customers of the change.

"We put on a heck of an effort in customer relations," the CEO said. "We had to e-mail these people, we phone-called these people, we FedExed them, we did everything we could so they knew what was going on, and we survived."

The outcome failed to satisfy U.S. Bancorp. It tried in vain to get the USABanc.com name declared in violation of the restraining order.

It was this second confrontation, Mr. Tepper said, that led him to wonder if U.S. Bancorp's motivations ran deeper than mere naming concerns -- and had more to do with annihilation. "It seems like it's quite a stretch for people to confuse the names."

He also questioned why U.S. Bancorp was so adamant about shutting down USABanc.com on the day of the judge's ruling, allowing no time for Mr. Tepper to alert customers.

"The worst part is we asked them if we could at least put up a note at USABanc.com that says please go here for your bank, and they said no," Mr. Tepper said.

U.S. Bancorp, which has done business on the Internet for several years, vehemently denied Mr. Tepper's insinuations. Senior vice president and spokesman Donn Waage stuck by the confusion argument, saying it applied to both USABanc.com and USABancShares.com.

Mr. Tepper's statement is "totally ridiculous," Mr. Waage said.

U.S. Bancorp was the name of the Portland, Ore., holding company that First Bank System of Minneapolis acquired in 1997. First System adopted the acquiree's name. Mr. Waage said that over 100 years "we have built up huge equity in that name, and this is just a very simple case of trademark and service-mark infringement. We are trying to protect our customers so our customers know who they are dealing with, and we also want to protect our shareholders because they have a huge investment" in the name.

Mr. Waage said his company is not afraid of competing with USABanc.com, so long as it sells its goods and services under a distinct identity. "This guy has questioned our motivations and what we are doing, and yet, if he had chosen a different name, any name, whether its 'X bank' or Joe's bank' or whatever, then he would continue to have the same level of business."

As for U.S. Bancorp's rejecting Mr. Tepper's request to post a note on the Web site: "He could find other ways to notify them," Mr. Waage said. "What we wanted to do was get the site out of there as fast as possible ... We don't want to have this guy's scheme persist."

Mr. Tepper's suspicions were aroused for another reason: There is a company in Johnstown, Pa. -- USBancorp Inc. that has not been subject to similar attack.

Mr. Waage said the two companies coexist because federal legislation protects some banks with similar names. "There is USBancorp Inc. in Pennsylvania, and then there is a U.S. National Bank in Red Lodge, Mont.," he said. "All of those banks were grandfathered under federal legislation for their names." Despite the latest ruling in favor of USABancShares.com, Mr. Waage said U.S. Bancorp will continue to fight to force another name change.

Mr. Tepper said he remains optimistic because "U.S." and "Banc" are generic terms that courts would be reluctant to grant exclusively to any one entity. "U.S. Bancorp banks a big portion of America, but they don't own America," he said.

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