Truliant Federal Credit Union served BB&T Corp. and SunTrust Banks Inc. with a series of documents this week aimed at compelling the banks to respond to a trademark-infringement lawsuit filed by Truliant.

The credit union filed the lawsuit June 17 in the federal Middle District of N.C. over the proposed brand name of Truist.

The legal action came less than five days after the banks announced — to mixed reviews — Truist Financial Corp. as the name for their new combined holding company and Truist Bank as name for the retail brand.

Neither bank has filed a legal response to the Truliant lawsuit.

Richard Coughlin, an attorney for Truliant, said in the legal filings that the banks were served copies of the summons, complaint, corporate disclosures and notice of right to consent.

Truliant has asked a federal judge to request that the banks respond by Sept. 25.

Truliant president Todd Hall said in a statement Thursday that “service of the complaint is the next step in the litigation process.”

“We continue to work toward a successful resolution of this matter. Our commitment to defend our brand and preserve the equity we’ve built in the Truliant name over two decades is just as strong now as it was when the Truist name was announced.”

The timing of the Truliant request comes as the super-regional banks project a late September to early October closing of their megadeal, although some analysts say it could take until late December to early 2020.

“I suspect that BB&T and SunTrust are trying to drag it out and force another communication, seeing if Truliant will back down,” said Bowman Gray IV, a local independent stockbroker.

BB&T spokesman David White said Thursday that the serving of the legal documents “is a routine part of the process and it’s not unexpected. Beyond that, we can’t comment.”

SunTrust declined comment.

$26.7 billion megadeal

The banks announced Feb. 7 that BB&T would acquire SunTrust in a $26.7 billion megadeal and that the combined bank’s headquarters would be in Charlotte.

The combined current value of the deal is $63.3 billion.

Even though the lawsuit involves two Winston-Salem-based financial institutions, Truliant is not pulling any legal punches. It is requesting compensatory and punitive damages.

“Defendants have taken advantage of and sought to trade upon the reputation and goodwill developed by Truliant and ‘Tru” trademarks ... and to capitalize on the market created by Truliant for its Truliant services. Defendants’ acts were committed with the reckless disregard of Truliant’s rights.”

Truliant is requesting a jury trial. It wants the banks to be prevented from moving forward with marketing Truist at retail or online, including applying for Truist trademarks.

BB&T applied June 11 for five sets of trademarks with the U.S. Patent & Trademark Office.

The banks have only disclosed Truist as a brand, waiting to unveil a logo, signs, colors and stock ticker symbol closer to the closing.

“The companies conducted a rigorous process to research, select and secure the new name. Beyond that, BB&T does not comment on pending litigation,” White said when the lawsuit was filed.

Truist piggybacking?

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

The credit union said allowing Truist in the retail marketplace has the potential to cause “irreparable injury to Truliant and to its business, reputation and goodwill.”

“This is a clear infringement on our name, and their proximity to our main business region will confuse consumers and undermine the trust we have built in our institution,” Todd Hall, Truliant’s president, said in a statement.

“As a member-owned cooperative and community leader, it is very important for consumers to be able to make this distinction,” Hall said

BB&T and SunTrust said Truist was chosen from what the banks and global marketing firm Interbrand said were “thousands” of choices. Free 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.”

Significant legal challenge

Truliant faces a significant challenge to winning a trademark-infringement lawsuit against the banks, according to analysts and industry officials.

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

“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 in 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.

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