Flushing Bank v. Green Dot Corp.
138 F. Supp. 3d 561, 2015 U.S. Dist. LEXIS 135368, 2015 WL 5802385 (2015)
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Rule of Law:
In a reverse confusion trademark infringement claim, a senior user with a conceptually weak mark and low commercial strength is unlikely to prevail against a junior user, even one with massive market saturation, if the marks are dissimilar when viewed as a whole and there is only de minimis evidence of actual consumer confusion.
Facts:
- In November 2006, Flushing Bank began offering nationwide online banking services under the name 'iGObanking.com' and subsequently registered the 'iGObanking' word and logo marks.
- Flushing Bank's advertising for iGObanking was primarily online and in print, with spending declining significantly over the years, resulting in low public brand awareness.
- In 2011, Green Dot Corporation began developing an online banking service for low- and moderate-income families, selecting the name 'GoBank' after consulting with branding experts.
- Prior to launching, Green Dot became aware of Flushing Bank's 'iGObanking' marks but proceeded, believing there was no likelihood of confusion, in part because other third-party banks used similar 'Go Bank' branding.
- Green Dot launched its GoBank service in January 2013 and engaged in a market-saturating advertising campaign, spending over $1 million and securing placements on national television shows like 'Project Runway', exposing the brand to tens of millions of consumers.
- Flushing Bank documented approximately a dozen instances of consumer inquiries suggesting confusion between iGObanking and GoBank, such as calls about GoBank cards purchased at Wal-Mart or online applications mentioning 'Project Runway'.
Procedural Posture:
- Flushing Bank filed a complaint against Green Dot in the U.S. District Court for the Southern District of New York, alleging federal trademark infringement and unfair competition, as well as state law claims.
- Green Dot filed an answer and a counterclaim seeking cancellation of Flushing Bank's 'iGObanking' trademarks on the grounds of fraudulent procurement.
- The U.S. District Court dismissed Flushing Bank's state law claims.
- The parties consented to a summary bench trial on the papers, submitting declarations, deposition testimony, and exhibits to the district court for a final ruling.
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Issue:
Does Green Dot's use of its 'GOBANK' mark create a likelihood of reverse confusion with Flushing Bank's senior 'iGoBanking' mark, thereby constituting trademark infringement under the Lanham Act?
Opinions:
Majority - Forrest, J.
No, Green Dot's use of its 'GOBANK' mark does not create a likelihood of reverse confusion. The court applied the eight-factor Polaroid test and found that the balance of factors overwhelmingly favors Green Dot. The court reasoned that Flushing Bank's 'iGObanking' mark is conceptually weak, falling between generic and descriptive, and has not acquired secondary meaning due to minimal advertising and low brand recognition. The marks, when viewed as a whole, are dissimilar in appearance, sound, and overall impression, with 'iGObanking' suggesting a personal action and 'GoBank' suggesting a location. Furthermore, the evidence of actual consumer confusion was de minimis when compared to the millions of consumers exposed to Green Dot's advertising. The court also found that Green Dot acted in good faith, and that the sophistication of consumers choosing a banking service would prevent lasting confusion. Therefore, Flushing Bank failed to prove a likelihood of confusion necessary to sustain its trademark infringement claim.
Analysis:
This decision illustrates the high bar for senior users with weak marks in reverse confusion cases. It emphasizes that trademark law protects a mark's ability to identify a source, and if a senior user fails to invest in creating that source identification, it cannot easily block a junior user who invests heavily in a different, albeit similar, mark. The court's meticulous application of the Polaroid factors shows that a junior user's market saturation is not dispositive; the weakness of the senior mark and the dissimilarity between the marks can be more critical. The case serves as a cautionary tale for businesses that adopt descriptive marks and fail to build brand equity, as their trademark protection may be limited, particularly against well-funded competitors.
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