Tuesday, May 06, 2008

TD Bank's Use of Commerce Name Challenged by Rival US Bank

Financial Post, Duncan Mavin, 6 May 2008

When the Boston Celtics loaded up the roster with superstar talent last summer, it seemed inevitable the team would reach the National Basketball Association finals.

But even as Kevin Garnett, Paul Pierce, Ray Allen et al march on to their destiny, one thing far from certain is the future name of the Celtics' hallowed home court, TD Banknorth Garden.

Toronto-Dominion Bank scored a coup in 2005 by landing the naming rights to the Celtics' famous stadium -- formerly Boston Garden. The hook-up with the green-shirted Celtics was a branding winner for TD Banknorth, the Canadian bank's business in the U.S. northeast.

Now the stadium is slated for another name change after TD announced the rebranding of its entire U.S. operations following the acquisition of New Jersey-based Commerce Bancorp in March.

But TD's plans have hit a snag after a U.S. court temporarily blocked the bank from using its proposed new brand in Massachusetts, the Celtics' home state.

In March, TD made a big fanfare of the retirement of the Banknorth brand and the launch of the new TD Commerce Bank name that will be applied to all 1,100 U.S. branches from Maine to Florida.

But, last Friday, U.S. district court Judge F. Dennis Saylor IV granted an injunction barring TD from using the new brand after a rival bank claimed TD's new name is causing confusion among customers.

"We saw the [TD Commerce brand] announcement and we were kind of shocked because it was really our name," said Brian Thompson, chief executive of 53-year-old Commerce Bank & Trust Co., which operates a dozen branches out of Worcester, Mass.

"We are literally next door to each other -- I'm sitting in an office one side-street away from TD's headquarters in Worcester -- so there's tremendous confusion among customers. People have been coming into our branches and asking if the manager was going to be out of a job because they thought we had been bought out."

Mr. Thompson said TD has not been in touch with Commerce Bank & Trust to discuss the dispute.

Despite the obvious size difference between the two banks -- Commerce Bank & Trust has assets of about US$1-billion, which is less than TD anticipates in income from its U.S. operations in 2009 alone -- he is confident of success as the Worcester bank has a 2002 trademark on the Commerce Bank name.

Judge Saylor is due to give more clarity on the brand dispute tomorow, with a further ruling likely to include whether the injunction will stand permanently, and to which parts of the TD Commerce Bank territory any injunction will apply.

TD's executives will be hoping for a dismissal of the challenge to their branding strategy, but executives at Commerce Bank & Trust are pressing for the injunction to stand throughout the state. A TD spokesperson declined to comment.

The bank is also yet to announce its decision regarding the future name of the Celtics' stadium, which is reported to cost TD about US$6-million a year. It is thought TD Boston Garden or TD Garden, as well as TD Commerce Bank Garden, are all possibilities.