Trademark Infringement Meets Consumer Privacy
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A trademark spat between two financial firms could have far-reaching implications for Web site domain names and consumer privacy.
Canada-based insurance seller First Niagara Insurance Brokers (FNIB) filed suit in the Southern District Court of New York this month against a similarly named bank, First Niagara Financial Group (FNFG). The suit alleged trademark infringement, unfair competition, false advertising and related claims.
But underneath what might seem a typical trademark suit lies a potentially more pressing concern: The plaintiff charges that the companies' customers have been e-mailing sensitive personal information unknowingly to the wrong "First Niagara."
According to the court filing, the problems began when the bank, formerly known as Lockport Savings Bank, changed its name in 2000 and began using "First Niagara" in marketing and business materials -- including its e-mail addresses.
Almost immediately, the insurance brokerage said it began receiving thousands of e-mail messages from FNFG's consumers, prospective employees, vendors and other third parties who believed they were communicating with the bank.
The e-mails often contained the senders' private personal and financial information, including Social Security numbers, bank account numbers and photocopies of driver's licenses.
"My client is a financial services company," said Paul Fakler, an attorney with Moses & Singer LLP who is representing the insurance brokerage. "They have clients who share very sensitive information. They feel a duty to keep that information safe and not have it launched out to third parties ... We don't even know if any of [FNFG's] customers know what's going on."
There's more to the case than the fairly simple issue of trademark law. For instance it's unclear which "First Niagara" might be responsible for users' misdirected e-mails. After all, who's to blame when an Internet user misdirects an e-mail, and who hasn't sent an e-mail to the wrong address?
It's also unclear whether one party might be liable for any potential loss or misuse of customers' financial data.
First Niagara Financial spokeswoman Leslie Garrity said that because the case is in litigation, the bank couldn't comment on specifics.
She did say, however, that none of its customers have reported lost or misused information as a result of the similarities in the names. But if the bank thought there were potential for ID theft, it would take immediate action by notifying customers, she added.
Perhaps most to blame in the debacle is the similar domain shared by both businesses. According to the filing, FNFG twice offered to purchase "firstniagara.com" from the insurance brokerage four months before it eventually changed its name from Lockport Savings Bank.
When the insurance brokerage refused, FNFG bought the domain name "first-niagara.com," which it uses for e-mail rather than a Web address.
The lawsuit states that since adopting its new moniker, FNFG has used it "extensively in connection with insurance services identical to [FNIB's] service and other financial services related to insurance. [FNIB] and FNFG operate in the same and similar channels of trade. The companies share the same classes of customers and even share particular individual customers."
Fakler said FNIB has spoken to the bank's IT administrators about the ongoing user confusion and encouraged them to solve the problem, but that the bank has yet to do anything about it.
"My client started getting these e-mails, tax forms, etc., so they immediately contacted First Niagara Financial," Fakler said. "All they did was use it as another opportunity to tell us to change our business name."
Because neither litigant is accusing the other of trying to make use of the data consumers erroneously sent to the wrong address, the case isn't likely to devolve into a spat over actual ID theft, according to Alan Greenspan, an attorney with Jackson Walker LLP who specializes in intellectual property and the Internet.
Nevertheless, the problem highlights the complexities inherent in easily confused domain names, Greenspan said.
"If you think of it in a pre-Internet situation, where you have organizations that have rights to use similar trademarks, e.g., Speedy Dry Cleaning and Speedy Messenger Service, they might get each other's mail. There may be confusion, but that's not a circumstance where there really is trademark infringement, because the services they offer are so different."
Without clear-cut answers to questions of responsibility in cases like First Niagara Insurance Brokers v. First Niagara Financial Group, Greenspan said consumers have to rely on their own judgment to protect their sensitive information.
"People sending personal information over the Internet either via e-mail or entering that information over Web sites need to be vigilant about who they're sending it to and why they're sending it," he said. "There are scam artists who have been taking advantage of this for years."
Within the next month, the judge for the case will determine a time for the warring Niagaras to exchange data that can be used as evidence. After this process, each side is expected to file summary judgment motions in defense of their positions. If neither side wins the file summary judgment, the case will go to trial.
At least the trademark-infringement portion of the debate may be cleared up quickly. Such cases typically hinge on the "likelihood" of confusion. But in this instance, Fakler said, there is evidence of actual confusion.
"It's very rare that you have evidence of consumers being this confused," he said. "Ultimately, we're trying to protect consumers of this type of confusion. My client doesn't have standing to take up the mantle of these consumers' confusion. Hopefully in the future, their customers will not be confused."