### The Honorable Charles R. Wolle, Chief Judge, United State s 1 

### District Court for the Southern District of Iowa. For ease of reference, we refer to the pl aintiff-appellant as 2 

### "FB" and defendants-appellees as "FBS" throughout this opinion , while recognizing that the entities have undergone name chan ges and consolidation in the past. ___________ No. 95-2238

___________ First Bank, * * Appellant, * * Appeal from the United States v. * District Court for the * Southern District of Iowa. First Bank System, Inc.; and * First Bank, fsb, formerly known * as Metropolitan Federal Bank, * fsb, * * Appellees. *

___________ Submitted: December 13, 1995 Filed: May 29, 1996

___________ Before McMILLIAN, JOHN R. GIBSON, and BEAM, Circuit Judges.

___________ BEAM, Circuit Judge.

Fi rst Bank (FB) appeals the district court's order dissolving a 1 preliminaryinjunction and denying its motion for a permanent injunction against the use of FIRST BANK, FIRST BANK IOWA, or any colorable imitation s of th ose terms by First Bank System, Inc. (FBS). Because FB failed t o 2 prove the facts essen tial to establish a common-law trademark, we affirm.

### -2-

I. BACKGROUND
This case involves a dispute betweentwo banks over the use of FIRST BANK in connection wi th banking services provided in the Iowa counties of Polk, Dallas, and Warren. One of these banks, FBS, is a federall y chartered bank holding company with its principal place of business i n Minneapolis, Minnesota. FBS owns banks in several states and provide s banking services throughout the United States. Since the early 1970s, FBS has pr ovided various banking services in Iowa--such as home improvemen t loans, correspondent banking, commercial lending, and credit cards--even though FBS did not have an office in Iowa. Rather, FBS promoted an d provided its services through advertising, perso nal contacts and the mail.

As part of its acquisition of Metropolitan Federal Bank, fsb, i n late 1994, FBS obtained several branches in Iowa. On February 18, 1995 , Metropolitan Federal Bank, fsb, changed its lega l name to First Bank, fsb. The former Metropolitan Federal Banks in Iowa were renamed First Bank Iowa

. FBS has owned several trademark registrations, including: (1) an Iow a registra tion on FIRST BANK SYSTEMS from 1968 to 1978; (2) an Iow a registration on FIRST BANK and a design from 1968 to 1978; (3) a federal registration for FIRST BANK SYSTEM and a design from 1971 to 1991; (4) a federa l registration for FIRST BANK SYSTEM issued December 26, 1989 , asser ting first use on August 26, 1968; (5) a federal registration fo r FIR ST BANKS and a design issued June 21, 1994, asserting first use o n October 4, 1991; and (6) an Iowa service mark application for FIRST BANK filed November 14, 1986, claiming use in Iowa on October 1979.

The ot her bank, FB, is an Iowa chartered bank with its principa l pl ace of business in West Des Moines, Iowa. Prior to 1993, FB was a federally chartered bank. From 1938 to 1993, FB was known as Firs t National Bank of West Des Moines. FB has never owned a registere d trademark for FIRST BANK. FB relies instead on

### -3-

the common law of trademarks for its claim of an exclusive right to us e FIRST BANK in connection with banking services p rovided in these counties.
Beginningin 1970, FB used a logo which combined a prominent Arabic
num eral "1" with the phrase "FIRST NATIONAL BANK OF WEST DES MOINES " (1970 l ogo). In order to compete more effectively with a rival bank i n West Des Moines commonly referred to as "West Bank," FB emphasized th e words "FIRST" and "BANK" in this logo by printing those two words in large r letters. The word "NATIONAL" remained on the logo in smaller print, as di d the phras e "OF WEST DES MOINES," until a modernized version of the log o appeared in December of 1985 (1985 logo). FB printed the 1970 logo o n various items--including checks, stationary, envelopes, and busines s cards--and used it in advertisements. In 1970, FB had over 1700 customers in Iowa. Rex Weitzell, FB's advertising agent in the 1970s, testified tha t he referred to the bank as "First Bank" during his tenure with the bank. William Fultz, an advertising agent, also testif ied that he referred to FB
as "Firs t Bank" in the early 1970s while he was doing work for Banker s Trust. Roy Messerschmidt, Chairman of FB, testified that FB has identifie d itself as "First Bank" when it answers the telephone since 1970.

Thomas Porter, FB's advertising agent, testified that he was unde r the impression that in 1985 people were referring to FB as "First Bank." Nevertheless, in 1985, he suggested that the off icers and board of FB make
a c oncerted effort to change the bank's name to "First Bank." Porte r testified that the primary reason the bank should change its name was to preempt FBS from using FIRST BANK in Iowa. Porter was aware of ongoin g efforts by FBS to acquire a chain of banks in Iowa. Before adopting the
name c hange and new logo, FB consulted with G. Brian Pingel, Esq., a trademark attorney. In a letter dated October 4, 1985, Pingel advised FB to begin using FIRST BANK as soon as possible, but he warned FB abou t several potential conflicts, including the existing

### In fa ct, FB was required to print the 1985 logo i n 3 

### combination with "FIRST NATION AL BANK OF WEST DES MOINES" until it became a state chartered bank in 1993. Subsequently, FB printe d th e 1985 logo with other phrases, such as "THE BANK DES MOINE S CALLS FIRST." -4- FBS federal trademark registration for FIRST BANK SYSTEM. In that letter, Pin gel repeatedly referred to FB as "First National" rather than "Firs t Bank."
Throughou t the early 1980s, FB continued to attach its 1970 logo to bank d ocuments and used those logos in various promotional materials

. Advertisements printe d during the 1980s, however, contained quotations in which satisfied customers referred to FB as "Fir st National" not as "First Bank." In an effort to further emphasize the "First Bank" concept an d facilitate its attempted name change, FB used the 1985 logo, which onl y
con tained the Arabic numeral "1" and the two words "FIRST BANK" i n ad vertisements and on bank documents (e.g., checks, and stationery). 3 Finally, on December 22, 1993, FB changed its legal name to "First Bank."

In July 1994, FB heard that FBS was in the process of acquirin g Metro politan Federal Bank branches in Iowa, some of which were in FB' s primary market area o f Polk, Dallas, and Warren counties. Counsel for FB contacted FBS and exp ressed concern over FBS's possible use of FIRST BANK in connection with ba nking services provided in FB's primary market area. FBS did not respond t o FB's concerns until three days before FB filed the complaint in the present case on January 12, 199 5. FB claimed that it had the exclusive right t o use FIRST BANK in connection with banking services it provided in its pr imary market area and alleged that FBS violated both federal and Iowa trademark laws. The district court denied a temporar y restraining order but subsequently granted FB a preliminary injunction on February 1, 1995.
FB requested a permanent injunction to prohibit FBS from using FIRST BANK or any colorable imitation in FB's primary market area.

### -5-

After conducting the first part of a bifurcated trial, the district court dissolved the preliminary injunction and denied the request for a permanen t injunctio n. In an order dated April 19, 1995, the district court held , int er alia , that: (1) FB had failed to prove that it had used the nam e "First B ank," rather than "First National," prior to 1971 when FB S registered its federa l trademark for FIRST BANK SYSTEM; and (2) the words "First Bank" did not have a secondary meaning referring to FB until after 1986 , which was well after those same words had acquired a secondar y meaning in Iowa referring to FBS in connection with banking services i t provided in Iowa by mail from outside the state. The district court also dete rmined that equitable considerations favored denying the permanen t injunction.

FB appeals pursuant to 28 U.S.C. § 1292(a), claiming that th e district court committed several errors in its findings of fact an d
conc lusions of law. Specifically, FB contends that it already had a common-law trademark in FIRST BANK, based primarily on FB's extensive use of its 1970 logo, pri or to FBS's 1971 federal trademark registration. FB also argues that the district court erred in hol ding that actual confusion is insufficient to es tablish trademark infringement. Finally, FB asserts that it was error for the district court to conc lude that FB's adoption of FIRST BANK was in bad faith.

II. DISCUSSION
The narrow question before us is whe ther the district court erred in denying FB 's motion for a permanent injunction. We review a distric t court's denial of a motion for a permanent injunction under the abuse of discr etion standard. International Ass'n of Machinists & Aerospac e Workers, Dist. Lodge No. 19 v. Soo Line R.R. Co. , 850 F.2d 368, 374 (8th Cir. 1988 ), cert. denied , 489 U.S. 1010 (1989). An abuse of discretio n occurs when the distr ict court bases its decision on an error of law or a clearly erroneous

### -6-

finding of fact. Id. Although FB raises several issues on appeal, ou r inquiry focuses on the dispositive issue of whet her the district court was clearl yerroneous in finding that FIRST BANK had not achieve d dist inctiveness, or secondary meaning, in connection with FB's bankin g services prior to FBS's federal trademark regist ration or use of its FIRST BAN K SYSTEM mark. For the reasons discussed below, we agree with th e district court that F B failed to prove that FIRST BANK acquired secondary meaning prior to 1986 and thus FB's injunction action fails.
In asserting the exclusive right to use FIRST BANK in connectio n with banking services in the relevant Iowa counties, FB has not claimed that it posses ses a registered trademark, which would have been prima faci e evidence of a valid trademark. 15 U.S.C. § 1115(a). Therefore, FB must rely on the existence of a common-law trademark in bringing this lawsuit. Moreover, because FB claims exclusive use of FIRST BANK in the three Iowa counties, it must pro ve that it had a common-law trademark prior to FBS's registration or use o f its FIRST BANK SYSTEM mark. See Wrist-Rocket Mfg. Co., I nc. v. Saunders Archery Co. , 578 F.2d 727, 730 (8th Cir. 1978 ) (recognizing that while a registered trademark owner's rights can become incontestible, other common-law trademark owners retain exclusive rights in those areas where their rights antedated registration). In contrast, registration of the FBS mark established prima facie evidence of a valid trademark and provided nationwide constructive n otice of that mark, see 15 U.S.C. §§ 1072 & 1115(a); Old Dutch Foods, Inc. v. Dan Dee Pretzel & Potat o Chip Co. , 477 F.2d 150, 156 (6th Cir. 1973), or any colorable imitations such as FIRST BANK or FIRST BANK IOWA, see 15 U.S.C. §§ 1114(1) & 1127

. Thus, FB can only pro hibit the use of FIRST BANK SYSTEM, or any colorable imitation, in its market area if it meets three requirements. First, FB must prove that it had a common-law trademark in FIRST BANK antedatin g registration of FBS's mark. Second, FB must prove that its common-law mar k is similar enough to FBS's mark to create a substantial likelihood o f confusion among

### The Restate ment (Third) of the Law of Unfair Competition § 9 4 

### (1995) defines a trademark as "a word, name, symbol, device, o r other designation, or a combination of such designations, that is distinctive of a person's goods or services and that is used in a manner that identifies those goods or services and distinguishe s them from the goods or services of others."
-7- con sumers. See 15 U.S.C. §§ 1114(1) & 1125(a)(1)(A). Third, FB mus t demonstrate that the court's exercise of equitable power is appropriate. See 15 U.S.C. § 1116.
Turning to the first requirement, a common-law trademark arises from the ado ption and actual use of a word, phrase, logo, or other device t o identifygoods or services with a particular party. See , e.g. , Co-Rec t Prods., Inc. v. Marvy ! Advertising Photography, Inc. , 780 F.2d 1324, 1329 (8thCir. 1985) (quoting the statutory definition set out in 15 U.S.C. § 112 7); 3 Rudolf Callmann, The Law of Unfair Competition, Trademarks an d Mon opolies § 19.01, at 19-3 (4th ed. 1994). To succeed on its claim o f 4

a common-law trademark, therefore, FB must prove: (1) that it actuall y used FIRST BANK in connection with banking services provided in th e rele vant Iowa counties; and (2) that FIRST BANK identified FB as th e provider of those services in the minds of consumers.
Assuming, arguendo , that FB actually used FIRST BANK in connectio n with banking services provided in the relevant Iowa counties prior to FBS obtaining its federal registration, FB must prove that consumers (i.e., it s
cus tomers and potential customers) identified FIRST BANK with FB as th e provider of those banking services in these counties prior to FBS obtainin g its f ederally registered mark. In order to qualify for trademar k protec tion, therefore, FIRST BANK must distinctlyidentify FB as th e provider of certain b anking services in the minds of consumers. We begin
our inquiry as to whether FIRST BANK is sufficiently distinct to achieve this by classifying it into one of four categories: (1)

### A mark that suggests some quality or ingredient constitutes 5 

### a suggestive trademark, which is entitled to trademark protection wit hout proving secondary meaning. See 1 J. Thomas McCarthy , McCarthy on Trademarks and Unf air Competition § 11.20, at 11-104.4 (3d ed. 1996).
-8- generic; (2) descriptive; (3) suggestive; or (4) arbitrary or fanciful

. 5 See Cellular Sales, Inc. v. Mackay , 942 F.2d 483, 485 (8th Cir. 1991)

. Generic terms are not entitled to protection under trademark law because "such wor ds are in `the public domain and available for all to use[.]' " Id. at 486 (quoting Hallmark Cards, Inc. v. Hallmark Dodge, Inc. , 634 F. Supp
. 990, 997 (W.D. Mo. 1986)). At the other end of the spectrum, w e consider an arbitrary or fanciful mark the strongest possible trademark, thus entitling it to the maximum degree of legal protection withou t requiring any proof of secondary meaning. Id. A descriptive trademark is the weakest protectable mark and requires proof that the mark has acquired secondary meaning. Id.

A trad emark user establishes secondary meaning by showing tha t through "long and exc lusive use in the sale of the user's goods, the mark has become so associa ted in the public mind with such goods that the mark
serves to identify the source of the goods and to distinguish them fro m those of others." Aromatique, Inc. v. Gold Seal, Inc. , 28 F.3d 863, 870 (8t hCir. 1994) (citing Co-Rect Prods., Inc. , 780 F.2d at 1330). Th e primar yinquiry in determining whether the mark has attained secondar y meaning is whether the mark has become associate d with a particular source in the consumer's mind. Id. at 871 (citing Co-R ect Prods., Inc. , 780 F.2d at 1332-33); First Fe d. Sav. & Loan Ass'n of Council Bluffs v. First Fed. Sav. & Loan Ass'n of Lincoln , 929 F.2d 382, 384 (8th Cir. 1991) ( A descri ptive term only becomes protectable under trademark law "when i t conjures up a particu lar service or product in the minds of customers.").

### Some of the testimony took place only at the preliminar y 6 

### injunction hearing (e.g., Bowermaster's testimony). Othe r testimony occurred during the first part of the bifurcated trial, or at both proceedings.
-9- In the present case, FB concedes that FIRST BANK is a descriptiv e termand thus is not inherently distinctive. FB contends, however, that FIRST BANK acquired secondary meaning, thereby identifying the mark with banking services provided by FB in the relevant Iowa counties. To support its conten tion, FB offered testimony by the creator of the 1970 logo , advertising agent Jim Bowermaster, that the advertising campaign in late 1969 and early 1970, along with the 1970 logo, was to establish the concep t of "First Bank." Roy Messerschmidt, Chairman of FB, testified that the 6 1970 logo was used on all of the bank's document s. He also testified that he th ought, for the most part, that FB started answering the telephon e "First Bank" in 1970. As noted earlier, adverti sing agent, Thomas Porter, testified that he was under the impression that people were referring to FB as "First Bank" in 1985. FB also argues that in addition to wide-sprea d diss emination of the 1970 logo, FB had substantial accounts in thes e counties prior to 1971.
This type of evidence simply fails to establish sufficient proo f that
consumers identified FIRST BANK with the service s provided by FB, which is the focus of our secondary meaning analysis. FB's evidence of secondary meaning consisted alm ost exclusively of efforts undertaken by the bank to identify i tself as FIRST BANK prior to 1971. Although relevant, FB' s effo rts are not determinative of whether consumers actually identifie d FIRST BANK with FB. See Co-Rect Prods., Inc. , 780 F.2d at 1332 (stating that while "advertising is a relevant factor in determining whether a mark has acquired a secondary meaning, it is the effect of such advertising tha t is important, not its extent") (emphasis in original); Wrist-Rocket Mfg. Co. , 578 F.2d at 732 (stating that "common-law trademark rights cannot be established by advertising

### Although FB theoretically could obtain two common-la w 7 

### tra demarks (i.e., FIRST BANK and FIRST NATIONAL), the absence o f any customer reference to FB a s "First Bank" in its advertisements sup ports the district court's conclusion that FB failed to prov e tha t FIRST BANK had acquired secondary meaning identifying FB a s the provider of certain banking services in the three Iowa c ounties until after 1986.
-10- alone"); Charles E. McKenney & George F. Long, III, Federal Unfai r Com petition: Lanham Act § 43(a) § 3.05, at 3-53 (1995) ("Evidence o f adver tising and extent of use of the mark in controversy are obviousl y important factors but are not determinative, such proofs demonstrating a party's efforts to establish secondary meaning but not necessaril y demonst rating that such efforts were in fact successful.") (footnote s omitted). FB's failure to identify itself with FIRST BANK in the minds of
consumers was further highlighted by William Fultz, FB's own expert witnes s
on advertising who testified, on cross-examination, that it takes a long time for a business to establish an identity with a particular logo o r slogan

. He admitted that FB probably had not yet been successful i n identifying itself as "First Bank" in the mid-1980s, given that customers had consistently referred to FB as "First Nation al" in its advertisements.

Furthermore, the record reflects that FB never actually used th e words "First" and "Ba nk" consecutively in any document, advertisement, or other printed medium prior to 1985, when it began to develop the 1985 logo

. Moreover, Pingel, FB's own trademark attorney, c onsistently referred to FB
as "First National" in his letter of October 4, 1985, in which h e recommend ed adopting and using FIRST BANK as soon as possible. Ro y Messerschmidt also recommended to FB's board of directors that it should start using FIRST BANK in the mid-1980s. Finally, the record is replete withexamples of FB customers referring to FB as "First National" rather than "First Bank" throughout the 1980s. 7

### Even if FB were able to rebut the statutorily prescribe d 8 

### presum ption that FBS owned a valid trademark dating from it s registration in 1971, see 15 U.S.C. § 1115(a), the district court also found that FBS actually used and acquired secondary mea ning in FIRST BANK SYSTEM in the relevant Iowa counties, thereb y est ablishing a common-law trademark, before FB established a common-law trademark in FIRST BANK.
-11- FB as serts that Pingel's references to FB as "First National" an d
recommen dation that FB start using FIRST BANK, as well as Porter' s recommendation that FB change its name to "First Bank" in order to preempt FBS from using FIRST BANK in Iowa, should not have been given any weight by the district court because neither man knew t hat FB had used FIRST BANK in the past. At a mi nimum, however, the fact that neither of the two men hired b y FB to promote it as FIRST BANK (i.e., its trademark lawyer an d advertising agent) were aware that FB had attempted to identify itself wit h FIR ST BANK in the past provides some indication of the success FB wa s experiencing in its effort to be recognized as "First Bank."

When evidence on the issue of secondary meaning is, at best , conflictin g, as in the present case, we will not disturb the distric t court's factual finding unless upon reviewing the entire record we are lef t with the definite conviction that the lower court made a mistake

. Aromatiq ue , 28 F.3d at 868; see also First Fed. Sav. & Loan of Counci l Bluffs , 929 F.2d at 384 (holding that the district court was not clearly
erroneous in finding that the term "First Federal" was a descriptive mark) ; G.H. Mumm & Cie v. De snoes & Geddes, Ltd. , 917 F.2d 1292, 1294 (Fed. Cir. 1990) (stating that adetermination of secondary meaning is a question of fac t which is reviewed on appeal under the clearly erroneous standard)

. Applying this standard, we conclude that the dis trict court did not commit clear error. We agree with the district court that FB failed to prove tha t FIRST BANK had attained secondary meaning before 1986, which is well after FBS registered its FIRST BANK SYSTEM trademark in 1971. 8

### Because we conclude that FB failed to prove that FIRST BANK 9 

### wa s distinctive (i.e., that it had acquired secondary meaning ) prior to FBS's registration or use of FIRST BANK SYSTEM--which is fat al to FB's claim--we need not discuss any other factua l requirement necessary to establish a common-law trademark

. Likewise, because FB failed to prove that it had a common-la w trademark we need not determine whether FIRST BANK and FIRST BANK SYSTEM or FIRST BANK IOWA are similar enough to create a lik elihood of confusion among customers.
-12- III. CONCLUSION

The di strict court did not commit clear error in finding that F B fai led to prove the facts necessary to establish a common-law trademar k that antedated FBS's registration of its mark an d thus FB was not entitled to the exc lusive use of FIRST BANK in these counties. Moreover, we have 9 examined the equitabl e considerations presented in this case and conclude that the district court did not abuse its discretion in denying th e permanent injunction. Accordingly, we affirm the district court's order. Finally, we have considered the other arguments advanced by FB and fin d them to be without merit.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.