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After a three-week jury trial, the U.S. District Court in Minnesota ruled in favor of TransUnion and VantageScore and denied claims by Fair Isaac (FICO) that the companies violated registered trademark rights.
The jury found that FICO knowingly made a false representation to the U.S. Patent and Trademark office in connection with its registration of a related trademark. The jury's verdict invalidates that trademark.
"The court's decision is a victory for the kind of choice, clarity and consistency that both consumers and lenders deserve when it comes to credit scoring," said Jeff Hellinga, president of TransUnion's U.S. Information Services division. "We hope this outcome finally puts this matter to rest and that Fair Isaac will embrace the choice, competition and innovation ..."
The verdict will enable TransUnion's business customers and consumers to choose the scoring solution that best meets their needs. Fair Isaac officials did not respond to calls seeking comment on the ruling.
At issue in the case was the use by credit score developers of numbers that encompass or overlap the 300-850 score range currently used by FICO, and whether consumer or lender confusion resulted from that use. FICO claimed a common law trademark in the range which it registered with the U.S. government in 2006, TransUnion has used the 300-850 range for a proprietary credit scoring model it made av ailable to the consumer market in 2003, a date that precedes FICO's original 2004 trademark application.
"We believe lenders need new and innovative tools to assess and manage risk, and only effective and fair competition can provide the appropriate incentive for that to occur," added Hellinga.
Following the launch of VantageScore in 2006, Fair Isaac Corp. filed suit, claiming the three national credit reporting companies, along with VantageScore Solutions LLC, were engaging in unfair and anti-competitive practices that would harm FICO's brand. Last summer Fair Isaac Corp. agreed to drop Equifax as a defendant in the suit based on an individual settlement with that company.
In July, U.S. District Judge Ann D. Montgomery rejected Fair Isaac's claims of anti-competitive behavior, false advertising, unreasonable and illegal restraint of trade, illegal merger or acquisition, conspiracy to monopolize the credit-scoring market and charges of anti-trust violations. That decision paved the way for today's verdict.
