Truliant Federal Credit Union faces a significant challenge to winning a trademark-infringement lawsuit against BB&T Corp. and SunTrust Banks Inc. over the Truist brand, according to analysts and industry officials.

Truliant filed its lawsuit Monday in federal court in Greensboro — less than five days after the banks unveiled Truist Financial Corp. as the proposed parent company and Truist Bank as the retail brand.

The credit union claims the banks are attempting to piggyback on Truliant’s brand efforts since its June 1999 debut, particularly in the Triad and Charlotte where there is significant retail and operational overlap.

It says allowing Truist in the retail marketplace has the potential to cause “irreparable injury to Truliant, and to its business, reputation and goodwill.”

The lawsuit is an understandable defensive move for Truliant, said Justin Nifong, a patent attorney with NK Patent Law at its Winston-Salem office.

“Truliant has a duty to police its mark,” Nifong said. “Otherwise, it loses its exclusivity in the marketplace.”

Nifong said Truliant’s challenge will be proving there is, or will be, confusion among consumers between its products and services and those offered by Truist. Truliant claims in its lawsuit that the impact is already being felt.

“There is a certain sophistication with how consumers choose a financial institution compared with going to a grocery store and potentially confusing Dr. Pepper with Dr. Perky,” Nifong said.

“They are likely going to take their time researching from whom they are getting a loan, an account with.”

Nifong said Truliant’s legal position may come down to the strength of its brand in the marketplace compared with the strength that BB&T and SunTrust would bring to Truist. Truliant has more than $2 billion in total assets, while a combined BB&T-SunTrust under the Truist brand would have $442 billion.

“How many “Tru” brands are there in the financial services industry?” Nifong asked. “The more there are, the less exclusive its claim of exclusivity will be.”

An online search came up with several “Tru” financial services brands, including: TruMark Financial Credit Union in Pennsylvania; TRU Financial Services Inc. of San Diego; Tru Financial Group of St. Catharines, Ontario, Canada; TruFund Financial Services in New York; Tru Insight Wealth Advisors in New York; and TruWealth Financial in North Dakota.

BB&T and SunTrust said Truist was chosen from what the banks and global marketing firm Interbrand said were “thousands” of choices. Free Dictionary.com defines Truist as “unselfish concern for the welfare of others; selflessness.”

“Truist is the first signal of our bold future together,” the banks said. “It reflects a shared belief in building a better future for our clients and communities.”

Nifong said consumers “are attracted to the Tru prefix because it is associated with trust and honesty.

“Obviously, there are a number of financial institutions who believe that is the case,” Nifong said.

‘Same first syllable’

The fact that Truliant is pursuing a lawsuit with a jury trial this quickly into the Truist unveiling is not surprising, said Roger Beahm, executive director of the Center for Retail Innovation at Wake Forest University School of Business.

“It is understandable Truliant might have reservations about (Truist) because they both use the same first syllable,” Beahm said.

Beahm said pursuing a jury trial “likely stems from a belief that a protest to the U.S. Patent and Trademark Office alone, who would be granting the mark, would likely not agree with their concerns.”

“Most trademark rejections come from companies trying to use the same word while competing in a similar or related category,” Beahm said.

Beahm said among Truliant’s challenges is that Truliant and Truist are different words.

“Truliant has no dictionary definition,” Beahm said. “It is, in a sense, an invented word.”

“Truist, on the other hand, is actually a real word with a dictionary definition, with connotations that BB&T and SunTrust would love to associate with its services.”

“It seems BB&T and SunTrust feel there is sufficient difference between the two names that it’s worth the risk to proceed with applying for trademark protection on the new name,” Beahm said. “They obviously believe the U.S. Patent and Trademark Office will agree.

Tony Plath, a retired finance professor at UNC Charlotte, said trademark and brand lawsuits “are quite common in the banking industry, and usually they’re settled long before they ever go to court.”

Free publicity?

Truliant did not take long to launch a marketing campaign targeting the proposed BB&T-SunTrust merger after it was announced Feb. 7.

The lawsuit could be a way for Truliant “to get free publicity,” comparing its services and homegrown standing with a bank leaving its Winston-Salem headquarters to form the sixth-largest U.S. bank, said Chris Marinac, research director for Janney Montgomery Scott LLC.

“In my experience, credit unions can play dumb like a fox,” Marinac said. “They really don’t care about Truist; they want to advance their own name.”

Truliant spokesman Heath Combs said the credit union declined to comment on that speculation.

Marinac said the lawsuit could "give\ credibility to the Truist name."

"It might open some eyes on Wall Street who complained that the name should be something different. While BB&T does not desire a legal skirmish, anything to boost the new brand is a side benefit."

Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said the key issue could be whether Truliant and Truist would be considered to be in the same industry.

“It might sound as though they are because they seemingly compete, but Truist will argue that banks and credit unions offer fundamentally different products and that the laws governing each would mean that they cannot actually compete as much as Truliant is going to argue that they do.”

“Even still, I agree that this is something that should be of concern to Truist Bank.

“One more hurdle for Truliant is that the two names appear quite different, so if they have not conducted an actual consumer survey that demonstrates brand confusion, they will face a really tough mountain to climb to prove their case.”

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