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