Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


October 30, 2001


The opinion of the court was delivered by: Robert W. Sweet, U.S.D.J.


Plaintiffs Citigroup Inc. and Citicorp (collectively "Citicorp"), have moved for summary judgment under Rule 56, Fed. R. Civ. P. on their affirmative claims of trademark infringement, dilution and unfair competition and to dismiss the counterclaims of defendants City Holding Company ("City Holding") and City National Bank of West Virginia ("City National") (collectively "City Holding") which assert similar claims against Citicorp.
For the reasons set forth below, the Citicorp motion for judgment on its claims is denied, its federal and New York dilution claims are dismissed, and its motion to dismiss the counterclaims of City Holding and City National is granted.

Underlying Issue

This action presents the contest between aurally identical marks employed by one of the primary financial institutions in the nation and by a West Virginia bank that has had regional and national aspirations. Competing causes of action for trademark infringement, dilution and unfair competition have been presented.

The resolution of these issues turns upon the effect of I/Y distinction between CITI and CITY, the significance of the feud between two families of marks, and the significance of the size of the marks. These issues will be resolved in the usual context of the factors established by our circuit in Polaroid Corp. v. Polarad Corp., 287 F.2d 492 (2d Cir. 1961) ("Polaroid").

Able counsel for both sides have carefully illuminated the issues and substantially assisted the court.

Prior Proceedings

Parallel actions were commenced in 1999. Citicorp filed its complaint in this Court in New York on September 29, 1999, and City Holding filed its action in the United States District Court for the Southern District of West Virginia, Charleston Division, on November 5, 1999. This Court in an opinion of June 2, 2000 (the "Opinion"), 97 F. Supp.2d 549, denied City Holding's motion to dismiss for lack of jurisdiction and its motion to transfer the action to the West Virginia District Court and enjoined City Holding from prosecuting its action there. Familiarity with the Opinion is presumed.

Discovery proceeded without difficulty and the instant motion was heard and marked fully submitted on June 27, 2001.


The Establishment of the Marks

The facts are found based upon the Local Rule 56.1 Statements of the parties with inferences drawn in favor of City Holding, the non-moving party.*fn1

On January 19, 1960, Citibank, a predecessor of Citicorp and Citigroup, registered the mark CITIBANK with the United States Patent and Trademark Office ("PTO"). Citicorp federally registered THE CITI NEVER SLEEPS shortly after February 1978.

As of December 31, 1980, Citicorp had federally registered the following marks: CITIBANK, CITICARD, CITICORP, CITIDATE, CITIPHONE, CITIPLAN, CITIQUOTE, CITISHARE and THE CITI NEVER SLEEPS, as well as 19 others. Citicorp federally registered the mark CITI on December 8, 1981.

By the end of 1985, there were approximately 60 federally registered CITI-prefixed marks. These included the following marks not registered as of December 31, 1980: CITI, CITI TREASURY MANAGER, CITI$HOPPER, CITIDOLLARS, CITIFILE, CITIFLEX, CITILEASE, CITISAVINGS, and CITITREND. By December 31, 1990, CITI's family of approximately 60 registered marks also included the following: CITIBANK PREFERRED, CITICORP TRAVELERS CHECKS, CITIEXPRESS, CITISPAN and CITISTAR. As of year-end 2000, there were approximately 140 marks either registered or covered in a pending federal trademark application in the CITI family of marks.

Citicorp has used slogans featuring the CITI mark, including "The CITI Never Sleeps" (1978), "The CITI of Tomorrow" (1981), "The CITI at Your Front Door" (1981), "It's your CITI" (1984), and "The CITI of Your Dreams" (1995). The CITI mark is also used in vanity phone numbers, including 1-800-321-CITI, 1-800-441-CITI, 1-800-336-CITI, 1-800-328-CITI, 1-800-967-CITI, 1-800-835-CITI, and 1-800-CITIGOLD. The number 1-800-CITI-ATM was used in the 1980's.

In November and December of 1998, focus group testing was done for Citicorp in Ohio, Texas and South Carolina in order to assess the public's reaction to proposed names to replace the Commercial Credit Corporation, a consumer finance subsidiary that had been a Travelers company. The survey company concluded that of the six names tested, CITIFINANCE and CITIFINANCIAL held the greatest potential.

A search report was ordered on December 22, 1998, with respect to CITIFINANCE/CITIFINANCIAL which revealed City Holding's CITI FINANCIAL CORP and CITY FINANCIAL CENTER marks, along with 18 pages of listings of "City Finance" companies. Both names were cleared. On January 15, 1999, Citibank filed an application to register the CITIFINANCIAL mark, stating under oath that there were no other parties with the right to use that mark.

On January 15, 1999, Citibank filed an application to register the CITIFINANCIAL mark, attesting that there were no other parties with the right to use that mark.

On April 3, 2000, the name of the Citicorp Mortgage, Inc. subsidiary was changed to CITIMORTGAGE.

City National Bank of Charleston was chartered in West Virginia in 1957 and used the CITY NATIONAL BANK mark throughout the 1960's, '70's and '80's. City Holding Company became the bank's corporate parent in 1983, after which substantial in-state expansion was effected through the acquisition of other banks, and by the building of City National Banks, between 1983 and 1997, with almost 60 branches.

In 1993, City Bank adopted the mark CITY FINANCIAL CORP, followed later that year by CITY MORTGAGE CORP. In 1996 CITY MORTGAGE SERVICES used the CITY HOME LENDING and CITY LENDING SERVICES names in the late 1990's.

In the mid 1990's, City Holding began to develop a nationwide mortgage service and origination business. In July 1996, City National established a "City Mortgage Services" division in California. This was followed by the acquisition of several West Coast banks and mortgage companies, and the establishment of a mortgage office in Dallas.

Beginning in July 1997, City Holding filed federal trademark applications for the following eight CITY marks: CITY CREDIT SERVICES; CITY FINANCIAL CORP; CITY HOLDING COMPANY; CITY MORTGAGE CORP; CITY MORTGAGE SERVICES; CITY NATIONAL BANK; CITY CAPITAL RESOURCES; and CITY FINANCIAL CENTER. In each of these applications, City Holding disclaimed any rights with respect to the non-CITY component of the marks.

Use and Effect of the Marks

In the late 1960's and early 1970's, Citicorp established Citicorp Venture Capital and Citicorp Leasing, two financial service businesses that operated nationally. In 1979, Citicorp founded Citicorp Mortgage, headquartered in St. Louis, Missouri, and by the late 1980's Citicorp Mortgage was one of the country's top issuers of new first mortgages. Other Citicorp businesses with offices or customers across the country included Citicorp Industrial Credit Corp., Citicorp Capital Investors Ltd., and Citicorp Business Credit, Inc. As of 1984, for example, approximately 11.7 million domestic households, or one out of every seven, was a Citicorp/Citibank customer. Citicorp had business relations with more than 17 million domestic households.

During the 1970's, Citicorp became the largest United States banking corporation in terms of loans and the largest non-governmental bank worldwide with 850 offices in close to 90 countries. By 1972 Citicorp's assets exceeded $30 billion.

In 1984, Citibank and Citicorp had customers in every one of the 50 states, and relationships with 11.7 million domestic households, or one out of every seven households in the country. In 1990, Citicorp had business relationships with more than 17 million domestic households, and by 1997, Citicorp had customers in over 22 million U.S. households.

Advertising and marketing expenditures in the U.S. of Citibank products for the years 1994-2000 were as follows:

1994 $381 million 1995 $394 million 1996 $331 million 1997 $353 million 1998 $660 million 1999 $715 million 2000 $603 million

During the years 1974-84, Citicorp spent over $100 million on advertising CITI brand services throughout the United States.

Citicorp's revenue has been as follows:

1980 $3.7 billion 1985 $8.5 billion 1990 $14.6 billion 1995 $18.7 billion 1997 $21.6 billion

In terms of consumers, the approximate number of U.S. households which utilized Citicorp services in selected years was as follows:

Total Credit Card Retail*fn2
1980 4.3 million 3.6 million 645,430 1985 8.9 million 7.7 million 980,497 1990 17.5 million 15.5 million 1.7 million 1995 20.5 million 18.2 million 1.6 million 1997 22.8 million 20.1 million 1.9 million

As shown by a 1996 Corporate Image Study, 89% of U.S. consumers have heard of Citibank. The same study shows that 51% of the public is familiar with the services provided by Citibank.

As part of its nationwide business activities, Citibank has offered financial services in West Virginia since at least 1980.

As of 1980, approximately 6,800 households in West Virginia had a Citibank credit card. In 2000, the number of West Virginia Citicorp credit card holders exceeded 116,000.

Citicorp Travelers Checks, sold nationwide, were also sold in West Virginia.

Citicorp has offered mortgages to West Virginia households since at least 1980.

In 1990, Citicorp Mortgage originated 29 mortgages in West Virginia totaling $2.4 million, and as of December 31, 1990, Citicorp Mortgage was servicing 145 loans in West Virginia totaling $9 million and in 2000 CitiMortgage originated 195 loans in West Virginia totaling $16 million, and as of December 31, 2000, CitiMortgage was servicing 1,800 loans in West Virginia totaling $127 million.

In 1990 or 1991, City Holding retained a public relations firm to recommend a new logo for City Holding. The new logo enlarged the word "CITY" compared to the words "Holding Company."

City National began using the following format for the presentation of its mark which placed the word "City" directly above "National Bank" in a larger, distinct typeface.

During this period there were three bank locations in West Virginia operating under the City National Bank name.

During the period 1990-97, City Holding continued to acquire community banks in West Virginia, operating most of them under their pre-acquisition names.

In October 1993, defendants formed City Financial Corporation to market securities brokerage and investment advisory services.

In 1998, following an acquisition of a West Virginia based community bank which doubled the size of City National, City Holding changed the name of "City National Bank of Charleston" to "City National Bank of West Virginia" and consolidated all of its community banks into the City National subsidiary under the CITY National Bank name and logo.

As of September 2000, City Financial Corp. had 8 employees, approximately 1,400 customers, 90% of which resided in West Virginia and 80-85% of which were also customers of City National Bank, and operated out of office space allocated to that business in 3-4 City National Bank locations in West Virginia.

In 2000, City Financial Corp. had revenues of approximately $525,000 and profits of $29,000. Advertising and marketing expenses for the three years 1998-2000 never exceeded $12,000 per year.

In December 1996, City Holding acquired certain assets and liabilities of Prime Financial Corporation, a mortgage loan servicing company located in Costa Mesa, California. Prime Financial's assets were then integrated into City Mortgage Services.

In October 1997, City Holding acquired First Allegiance Financial Corporation, a mortgage company headquartered in Irvine, California and established an office of City Mortgage Services in Dallas, Texas, conducted under the name City Home Lending.

In 1998, City Holding acquired a federally chartered savings bank, Del Amo Savings Bank, located in Torrance California, and Frontier State Bank, headquartered in Redonda Beach, California.

During the years 1998-2000, City Holding sent out over 20 million of direct mail solicitations to households throughout the United States for a "125" mortgage product (i.e., a second mortgage which had a loan value up to 125% of the value of the mortgaged property) and in these solicitations, defendants utilized marks and logos including the "City National Bank" logo described above, that displayed the word "City" prominently in a larger typeface. Among the others used were "City Home Lending", "City Mortgage Services", and "City Lending Services", in all of which the word "City" was predominant.

Subsequently, City Holding announced losses in connection with a whole loan purchasing program in May 1998, wrote off a $10 million investment in Mego Mortgage Corporation in 1999, and at the end of 1999, City Holding took write-offs of more than $9 million to cover losses on securitization transactions.

By March 2000, City Holding announced that it would exit the "Specialty Finance" (or "high loan to value") business entirely and drastically scale back its mortgage origination business and on January 31, 2001, City Holding announced the complete shut-down of the mortgage origination business, the sale of the West Coast banks, a cancellation of a quarterly dividend, and fourth quarter write-downs of more than $40 million.

Protection of the Marks

During the 1970's and 1980's, initially as FIRST NATIONAL CITY BANK, and then as CITIBANK, Citibank brought thirty-five lawsuits involving usages of either the CITI spelling or phonetical twins such as "City Bank."

Citibank did not take action against entities that used the formulation "City National Bank." In litigation against First City Bancorporation of Texas, the Settlement Agreement required only that the Texas company refrain from using "City Bank," and stated that "City National Bank" and "First City National Bank" were acceptable, non-infringing uses "throughout the world . . . in connection with all business, goods and services." Other settlements included forcing a business publication to change its name from CITIBUSINESS to CityBusiness, and forcing a Citi Mortgage Co. in Georgia to change its name to City Mortgage Co.

In 1990, Citibank requested Citi Mortgage Associates of Pennsylvania to change its name to CITY MORTGAGE ASSOCIATES. The Pennsylvania company complied and adopted a logo, which it sent Citibank to verify its compliance with the settlement.

Enforcement of CITI marks included negotiations in 1994 in which Citimortgage Corp. of Washington State agreed to change its name to City Mortgage Corp., and a Patent Office opposition proceeding in 1997, in which the owner of CITI HABITATS, used on real estate financial services, settled the proceeding by changing its name to CITY HABITATS.

A search report conducted in September 1997 was reviewed by Citicorp for clearance purposes for the mark CITIFUND, to be used on mutual funds and revealed a variety of marks including City Holding's CITY FINANCIAL CENTER and CITY FINANCIAL CORP applications.

In early 1998, Citibank considered opposition proceedings against the owner of an intent-to-use trademark application for CITISAFE covering safes to protect against the CITI usage.

In April or May of 1998, Citibank personnel obtained a copy of City Holdings' solicitation for home equity loans on which CITY NATIONAL BANK logo was prominently used as well as CITY MORTGAGE SERVICES advertising materials. The advertisements ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.