A tale of two CITIs…

It seems that everyone who has a computer today has written about the lawsuit between Citicorp and All Citi Pawn, a New York pawn shop.  CNN Money may have been the first to write about it, with this story:

In the suit filed last week in Brooklyn federal court, Citigroup alleges that in using the same Citi abbreviation and red arc as its banking subsidiary, Citibank, All Citi Pawn has infringed on their trademark. Citigroup is seeking all of the business’ profits since it adopted the All Citi name.

“What can I tell you? Its crazy. They’re going wild for a little art that I put up. Theirs is a moon shape, mine is a V-shape, but I’ve already taken it down,” pawn shop manager Bob Kay told CNN.

[…]

“It is important for Citigroup to know that no one is trading off their name – they need to protect their intellectual property.” [said Trademark attorney Michael Feign].  Feigin went on to say, however, that removing the offending logo should resolve the case. According to Kay, it has not.

Marty Schwimmer has the full text of the complaint here.

What’s surprising is that most of the commentators–and even reporters—are complaining that this is somehow a frivolous exercise for Citi.  CNN lead off its article with “You would think that Citigroup had enough on its plate these days, but that hasn’t stopped the financial behemoth from filing a copyright [sic] infringement suit against a Brooklyn, New York, pawnshop over a similar logo….”   And even Mr. Schwimmer titled his blog post “Your tax dollars at work.”

In defense of Citi, this is not a bad case. According to the allegations in the complaint, the owner of All Citi Pawn started using the offending name, and registered its allcitipawn.com domain name well after CITIBANK became famous.  Second, Citibank attached some promotional materials showing the logo that All Citi Pawn used.  It included a logo that looked a lot like Citibank’s.  A quick trip to the Wayback Machine at the Internet Archive (http://www.archive.org) retrieved this logo at the http://www.allcitipawn.com website:

The logo of All Citi Pawn

The logo of All Citi Pawn

Compare that to Citi’s logo:

The registered logo from the big CITI.

The registered logo from the big CITI.

According to the Wayback Machine, the first appearance of anything on allcitipawn.com was in 2007.   So we have a small pawn shop in New York independently choosing to modify the word “City” to “Citi” in its business name, and coincidentally use a sans-serif font in blue, with a red roof instead of a red arch?  That screams bad intent to appropriate the goodwill of the senior user (and its mark, previously adjudged to be famous).  The word is the same; the logo is nearly identical; to the extent that a pawn shop and a bank both make loans on collateral, the services are quite similar.  This is not overzealous trademark prosecution; this is what a responsible trademark owner should do to police its mark and keep it distinctive.

The fact that Citi may be in dire financial straits right now doesn’t mean that it shouldn’t continue to protect its brand and logos, especially when the marks and goods are so similar.  It’s certainly worth a couple of thousand dollars to draft a complaint (it shouldn’t take more than that; my guess is that the associate charged with drafting the complaint already had plenty of examples from which to model) and a couple hundred dollars in filing and service fees.  It’s certainly no million dollar office renovation.

Here’s what happened (as alleged in the complaint):    All Citi Pawn, instead of consulting trademark counsel, adopted the name in 2007 (or thereabouts) not in an attempt for people to believe that Citibank was opening a pawn shop, but rather for customers to see the logo and think “cute,” and maybe to get customers to think that All Citi Pawn was as stable and honorable as Citi (*smirk*). Citi attorneys found the website. They sent a cease-and-desist letter. All Citi Pawn, instead of consulting trademark counsel, thought, it’s just the word “Citi,” and our inverted “v” is different from their semicircle, so screw ’em, they won’t do anything else. And–whoops!–they did something else.  Now all of the business community is in an uproar just because Citi wants to protect whatever goodwill remains in their brand.

And now to the infuriating part of the CNN report:

“…but that hasn’t stopped the financial behemoth from filing a copyright infringement suit against a Brooklyn, New York, pawnshop over a similar logo.

[…]

“Citigroup is seeking all of the business’ profits since it adopted the All Citi name.”

First, there is no allegation of copyright infringement in the complaint.  This is a matter of trademarks, CNN! And if a business reporter for CNN doesn’t know the difference between trademarks and copyrights….

Second, Citigroup isn’t seeking all of All Citi Pawn’s profits.  In the WHEREFORE clause of the Complaint, Citi seeks:

D (1) All of defendant’s profits, gains and advantages derived from the unauthorized appropriation of Citigroup’s good will in its service marks as part of defendant’s name, to identify defendant’s services and products…. (emphasis added).

This pleading is appropriate and correct for willful trademark infringement. Citi is not asking for all of the defendant’s profits, but all profits that flow from the use of Citigroup’s names and logos.  That’s a much, much smaller pool (and almost impossible to prove).

I’m not usually one to valiantly defend the big, bad bank from a bit of bad publicity, but I think in this instance, Citi’s gotten an unfair shake.

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4 Comments

Filed under Law, Trademarks

4 responses to “A tale of two CITIs…

  1. Pingback: Arbitrary & Fanciful

  2. Pingback: A (second) tale of CITIS « Arbitrary & Fanciful

  3. Nice analysis. I agree with you totally. When the reporter contacted me, she did keep confusing ‘trademark’ with ‘copyright’ but I didn’t notice the mistake in the article.

    I’d just like to emphasize that I said, “removing the offending logo should resolve the case.” It’s not clear from the article, but my view is that they SHOULD and NEED to protect their mark to maintain it. However, that is accomplished simply by getting others to stop using an infringing mark.

    – Michael J. Feigin, Esq.
    Patent & Trademark Attorney
    http://PatentLawNY.com
    http://PatentLawNJ.com

  4. Kyle Kaiser

    I agree with you Michael. Thanks for reading and posting.

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