On your marks: Firms defend branding against incursions

Temporary signage is on display at Metro Bank's headquarters in Swatara Township, Dauphin County, while the facility awaits new branding. Cumberland County-based Members 1st Federal Credit Union had alleged the previous bright red logo resembled the Members 1st branding too closely and confused customers. Photo/Amy Spangler

It’s been an active few weeks in the world of midstate brand wars.

Metro Bank is in the process of changing its signage to a revised logo that downplays the dominant bright red initial “M.” Members 1st Federal Credit Union had sued the Swatara Township-based bank, alleging the logo resembled the Members 1st branding so closely that it confused customers.

Meanwhile, chocolate giant The Hershey Co. has resolved two branding issues. It dropped a lawsuit against Mars Inc. over the packaging of the latter’s Dove Promises candy and reached an agreement barring Lancaster County sheriff candidate Mark Reese from further use of a logo mimicking the Hershey brand whose name he shares.

Some might question the closeness of the two bank logos or wonder why a global company would object to a county-level political candidate making a good-natured visual pun. But extremism in defense of a brand is no vice, local marketing and legal experts said.

“A lot of a business’s value is wrapped up in its brand,” said David Taylor, president of Lancaster-based Taylor Brand Group.

Industry analytics firm CoreBrand rates The Hershey Co.’s brand the second most powerful in the world, behind Coca Cola.

If a company doesn’t aggressively pursue minor infringements of its rights, it will lose credibility when it battles major ones, said Steve O’Donnell, a Lancaster-area attorney who specializes in intellectual property law.

“It’s important for trademark owners to police their art,” he said.

Companies can lose their rights to undefended marks and brands, Taylor said.

Members 1st vs. Metro

There were “numerous, numerous examples” of customer confusion when Metro introduced its logo in June 2009, Members 1st President and CEO Bob Marquette told the Business Journal.

Previously, Metro had been Commerce Bank/Harrisburg, branded with a bright red “C.” Commerce Bank was a franchise of New Jersey-based Commerce Bank, but had to rebrand when that bank was sold to Canada’s TD Bank.

The name and “Metro Bank” brand were part of “a larger overall plan” to merge with Republic First Bank and a co-branding deal with the Metro Bank that recently opened in the United Kingdom, Metro said in court papers. New Jersey Commerce Bank founder Vernon Hill backs both those banks.

The same firm that designed Commerce Bank’s logo designed a big red “M” with a break on the left side, keeping the same shade of red, Metro Bank told the court.

“Metro was trying to carry some equity over from the Commerce brand. That’s not unusual,” Taylor said.

Members 1st, based in Lower Allen Township in Cumberland County, is Pennsylvania’s third-largest credit union, with more than 150,000 customers, mostly in the midstate.
It adopted its logo in 2003 and obtained trademark protection in 2006. The logo has a break on the right side of the “M” so the right leg forms a “1,” and its red is a darker shade than Metro’s.

Both Metro and Members 1st logos now consisted of a prominent red “M” with a break in it, with black lettering for the rest of their names. The result was extensive customer confusion, Members 1st said in the lawsuit it filed June 19, 2009.

Metro Bank itself “identified more than 50 separate instances of actual (customer) confusion” and Members 1st documented more than 60 incidents, according to a pretrial memorandum filed by Members 1st.

In September, Metro revealed plans to introduce a modified logo and abandon the one in dispute. The new logo features the word “Metro” all in red. The M is smaller and has no break.

In March, the two banks reached an undisclosed settlement to end the litigation.
Members 1st has not approved the modified logo and its introduction may not end the fight, Marquette said. The credit union is waiting to see how the marketplace reacts, he said.

“If we feel it continues to generate confusion, you might hear more,” he said.

Metro Bank has more than 30 branches, each with several signs, so it will cost thousands of dollars to replace the signage at each one. Metro also will have to modify its stationery, website and promotional materials. The signage at the Harrisburg Senators‘ Metro Bank Park will be changed after the season ends, the bank said.

Still, replacing a logo early is cheaper than doing so later, after a company has built up years of equity through marketing, O’Donnell said.

Good due diligence before introducing a logo helps avoid conflicts, he said.

Companies are supposed to review existing trademarks for potential conflicts before trying to register a new one. Proposed trademarks are published for public review and possible objection before they can receive protection.

Top Metro executives were aware of Members 1st’s logo, and bank chairman, president and CEO Gary Nalbandian asked an assistant in 2008 to investigate whether the Members 1st logo was registered, Members 1st said in court documents.

Interestingly, Metro was able to trademark the disputed “M” while the Members 1st litigation was ongoing, filing its application in May 2009 and receiving protection in April 2010.

“We were not made aware of the application for registration until it was too late to oppose it,” Marquette said.

Nalbandian declined to comment on the bank’s decision-making process in rebranding from Commerce Bank to Metro Bank or from the old Metro Bank logo to the new one.

“We’re not going to hash out the past,” he said through a spokesman.

He called the move to the new logo “a subtle transition.”

“Customers have expressed that they like it better, that it is cleaner. They like that the logo features more of our signature red color,” he said.

Hershey takes on Mars and Sheriff Reese

In November, Hershey filed suit alleging Mars’ Dove-brand Promises used orange-and-brown packaging that resembled Reese’s-brand products. Both product lines feature mixes of chocolate and peanut

Mars countersued, demanding dismissal of the initial suit. Both companies dropped the suits late last month, without offering comment or details.

Hershey and Mars are fighting all the time, Taylor said.

“They’re pretty much archenemies looking to annoy each other,” he said.

Nevertheless, it is possible to own a color, and many companies do. John Deere owns its iconic colors within its market niche and would be entitled to fight another company that tried to sell green-and-yellow tractors, he said.

Brand concerns can extend into politics, as acting Lancaster County Sheriff Mark Reese learned. His campaign committee, Friends for Mark Reese, had adopted the distinctive cursive font used by Reese’s, a Hershey brand, for his campaign signs and literature.

After objections from Hershey, the campaign agreed to use different lettering after the May 17 primary, which Reese won handily.

Hershey did not respond to a request for comment. But the company acted appropriately, O’Donnell said.

“That’s what I would’ve told them to do,” he said.

Taylor said he was immediately struck by Sheriff Reese’s signs, so much so that he took a photo when he first saw them and posted it to Duets, a trademark industry blog.

Hershey had no choice but to take action, he said.

“They have to show they’re defending their trademarks,” he said.

Wells Fargo managed Wachovia transition carefully

Financial services giant Wells Fargo faced a common yet tricky branding challenge when it converted Pennsylvania’s 289 Wachovia branches to its own name this spring.

As with any changeover, the San Francisco-based bank had to steer a fine line between promoting the new brand and reassuring customers comfortable with the old one.

Customers had to understand “the same service is still going to be there,” said Tom Bell, Well Fargo’s regional marketing manager for Pennsylvania and Delaware.

It helped that the same familiar faces were still greeting customers in most cases, Bell said. A brand isn’t just an organization’s slogan or color scheme, but also its people and the level of service they provide, he said.

Wells Fargo bought Charlotte, N.C.-based Wachovia in late 2008 in a $15 billion stock deal. At the time, Wachovia had more than 3,300 branches in 21 states and $764 billion in assets, but was on the verge of becoming a casualty of the financial crisis.

The changeover was done in stages, one state or region at a time. The Wachovia Center in Philadelphia was renamed the Wells Fargo Center six months before the Pennsylvania changeover, which helped to raise awareness that it was coming, Bell said.

Extensive behind-the-scenes planning helped ensure disruptions were minimal. Beginning 90 days before conversion, Wells Fargo began sending a series of letters to customers of the former Wachovia informing them of the changes.

The changeover was marked with a number of promotional events, including one in Harrisburg with Mayor Linda Thompson. At the same time, Wells Fargo launched a major marketing push that is still in progress. It encompasses social media as well as traditional channels, Bell said.

Even after all that, the conversion took some customers by surprise, he said.

Brand Finance this year named Wells Fargo the ninth most valuable brand in the world, spokesman James A. Baum said. The bank recognizes the brand’s importance to its business and diligently monitors potential infringements, he said.

Tim Stuhldreher

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