"2 Audis Collide Over the Right To Use a Name" - now I know where "Audi" came from....
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"2 Audis Collide Over the Right To Use a Name" - now I know where "Audi" came from....
Copyright 2001 American Banker, Inc.
The American Banker
August 15, 2001, Wednesday
SECTION: COMMUNITY BANKING; Pg. 1
LENGTH: 1083 words
HEADLINE: 2 Audis Collide Over the Right To Use a Name
BYLINE: BY VERONICA AGOSTA
BODY:
Volkswagen AG, the parent of the automaker Audi AG, has registered the Audi name for a bank it plans to open in Utah, even though Audi's long-running feud
with a bank with a similar name is far from settled.
Barring any last-minute snags, the Federal Deposit Insurance Corp. is expected to approve the German carmaker's application to charter an online bank any day
now. The bank, which would offer financial services to Volkswagen and Audi customers, would operate as Volkswagen Bank USA, but the charter would also
allow it to do business as Audi Bank.
Volkswagen registered the Audi name even though Audi AG is locked in a legal battle with Bank Audi USA in New York over the use of the name in banking.
The carmaker contends that it should have sole use of its Audi brand.
Bank Audi USA, which has $711 million of assets, was founded in 1983 as a state-chartered commercial bank in New York. Audi AG sued it in U.S. District
Court for the Southern District of Florida in Miami in 1997. Arguments in the trademark infringement trial ended more than 18 months ago, but a final ruling has not
been handed down, so the companies are in legal limbo.
The Audi names have very different histories.
Joseph G. Audi, the president and chief executive officer of Bank Audi USA, says his family began banking in Lebanon in the 19th century. By the 1970s the
family's banking interests had expanded overseas with the founding of independent banks in Switzerland, France, Luxembourg, and the United States that carry the
Audi name, and in which the family retains an ownership stake.
Ironically, the carmaker's name stems from a naming dispute. August Horch founded a car company in 1899 but left in a quarrel with backers. Barred from putting
his own last name -- which means "listen " -- on his new company too, he used the Latin translation, "audi."
Volkswagen is the largest manufacturer of passenger cars in Europe and the fourth-largest in the world. The automaker, which developed its financial services
activities in the credit industry, registered the name of Audi Bank in Germany in 1990 and has since claimed exclusive rights to the Audi name, one of its major
upscale brands -- much to the dismay of the Lebanese family.
"It's pure aggression from a major company who decides to come and attack an existing business," Mr. Audi said. (Richard Burns, the president and CEO of
Thomson Financial Media, the parent company of American Banker, is a Bank Audi board director).
Bank Audi USA has one branch, in New York, and clients throughout North and South America, Europe, and the Middle East. It has been defending the use of
the family name since the early 1990s in several courts throughout Europe. The company said it has obtained some favorable rulings in those cases.
In an interview in his New York office, Mr. Audi said his company has spent "in the millions" defending itself, and has even tried to settle with the automaker. But it
was "very difficult to negotiate" with Audi AG, he said.
"Basically their idea of negotiations is, 'You die and you leave me alone.' "
Volkswagen executives refused to discuss the case, and attorneys for Audi AG said the company does not discuss pending litigation. However, Konrad Klimek,
an attorney for Audi AG in Ingolstadt, Germany, responded very generally in writing to questions about the case.
"Audi AG is requesting (Bank Audi) to use its name in a manner that ensures that consumers are not confused any longer by (Bank Audi's) use of the word
'Audi,' " Mr. Klimek stated.
John E. Tardera of Winston & Strawn in New York is one of the lawyers defending Bank Audi USA. He said the Miami case hinges on the Federal Trademark
Dilution Act of 1997, which was meant to prevent other companies from using the country's most famous trademarks, like Coca Cola's Coke.
Audi AG argues that the Audi name is a "most famous" trademark, and that the company is entitled to have a monopoly on the name, Mr. Tardera said. The
automaker is arguing that the bank's use of the trademark dilutes the Audi name as an identifier of Audi AG's products, he said.
Though Mr. Klimek did not discuss the antidilution act, he said that "the main issue is that people are confused by (Bank Audi) using the word 'Audi,' which has a
famous meaning for Audi AG."
Attorneys for Bank Audi USA said they do not consider Audi a brand worthy of protection under the antidilution law. "We certainly don't agree it's a sufficiently
famous trademark that is entitled to this protection," Mr. Tadera said. "And second, even if it is sufficiently famous, that our use has not in essence diluted their
ability to have their customers identify Audi with their products."
Because the antidilution act is relatively new, there have been few court decisions about it, and none have reached the Supreme Court.
Defense attorneys say that it is very unusual for a judge to take so long to issue a decision, and that they do not know when they can expect a judgment. What's
more, when a decision is reached, it may not strictly favor either side, the attorneys say.
"The judge can decide that we have the right to continue to use the name, but perhaps not in a particular narrow area of financing, for example car loans or
something like that," Mr. Tardera said. "At this point the options available to the judge are varied. It's not all or nothing. It may be something in between."
Meanwhile, Utah state officials have approved the application by VW Credit Inc., a Volkswagen subsidiary, for a bank charter to operate as Audi Bank. Like
BMW, which last year created BMW Bank of North America, a branchless bank in Salt Lake City, Volkswagen hopes to set up an industrial loan corporation in
Utah, which has less restrictive laws on these types of charters than other states.
The fact that Volkswagen Bank USA, which would be headquartered in Salt Lake City, is so close to operating as Audi Bank further rankles Mr. Audi, who says
he is upset that Volkswagen intends to use a slight variation of Bank Audi USA's name.
"I don't care if they do business as Volkswagen Bank," he said. "It's their right. I have no reason to object to that. But Audi Bank USA is something I strongly
object to, and I don't think it should be permitted, because it is exactly our name by changing the order of the words."
Mr. Audi also said he is investigating his legal options in Utah.
Copyright c 2001 Thomson Financial. All Rights Reserved. http://www.americanbanker.com
GRAPHIC: photo, Joseph Audi
LOAD-DATE: August 14, 2001
The American Banker
August 15, 2001, Wednesday
SECTION: COMMUNITY BANKING; Pg. 1
LENGTH: 1083 words
HEADLINE: 2 Audis Collide Over the Right To Use a Name
BYLINE: BY VERONICA AGOSTA
BODY:
Volkswagen AG, the parent of the automaker Audi AG, has registered the Audi name for a bank it plans to open in Utah, even though Audi's long-running feud
with a bank with a similar name is far from settled.
Barring any last-minute snags, the Federal Deposit Insurance Corp. is expected to approve the German carmaker's application to charter an online bank any day
now. The bank, which would offer financial services to Volkswagen and Audi customers, would operate as Volkswagen Bank USA, but the charter would also
allow it to do business as Audi Bank.
Volkswagen registered the Audi name even though Audi AG is locked in a legal battle with Bank Audi USA in New York over the use of the name in banking.
The carmaker contends that it should have sole use of its Audi brand.
Bank Audi USA, which has $711 million of assets, was founded in 1983 as a state-chartered commercial bank in New York. Audi AG sued it in U.S. District
Court for the Southern District of Florida in Miami in 1997. Arguments in the trademark infringement trial ended more than 18 months ago, but a final ruling has not
been handed down, so the companies are in legal limbo.
The Audi names have very different histories.
Joseph G. Audi, the president and chief executive officer of Bank Audi USA, says his family began banking in Lebanon in the 19th century. By the 1970s the
family's banking interests had expanded overseas with the founding of independent banks in Switzerland, France, Luxembourg, and the United States that carry the
Audi name, and in which the family retains an ownership stake.
Ironically, the carmaker's name stems from a naming dispute. August Horch founded a car company in 1899 but left in a quarrel with backers. Barred from putting
his own last name -- which means "listen " -- on his new company too, he used the Latin translation, "audi."
Volkswagen is the largest manufacturer of passenger cars in Europe and the fourth-largest in the world. The automaker, which developed its financial services
activities in the credit industry, registered the name of Audi Bank in Germany in 1990 and has since claimed exclusive rights to the Audi name, one of its major
upscale brands -- much to the dismay of the Lebanese family.
"It's pure aggression from a major company who decides to come and attack an existing business," Mr. Audi said. (Richard Burns, the president and CEO of
Thomson Financial Media, the parent company of American Banker, is a Bank Audi board director).
Bank Audi USA has one branch, in New York, and clients throughout North and South America, Europe, and the Middle East. It has been defending the use of
the family name since the early 1990s in several courts throughout Europe. The company said it has obtained some favorable rulings in those cases.
In an interview in his New York office, Mr. Audi said his company has spent "in the millions" defending itself, and has even tried to settle with the automaker. But it
was "very difficult to negotiate" with Audi AG, he said.
"Basically their idea of negotiations is, 'You die and you leave me alone.' "
Volkswagen executives refused to discuss the case, and attorneys for Audi AG said the company does not discuss pending litigation. However, Konrad Klimek,
an attorney for Audi AG in Ingolstadt, Germany, responded very generally in writing to questions about the case.
"Audi AG is requesting (Bank Audi) to use its name in a manner that ensures that consumers are not confused any longer by (Bank Audi's) use of the word
'Audi,' " Mr. Klimek stated.
John E. Tardera of Winston & Strawn in New York is one of the lawyers defending Bank Audi USA. He said the Miami case hinges on the Federal Trademark
Dilution Act of 1997, which was meant to prevent other companies from using the country's most famous trademarks, like Coca Cola's Coke.
Audi AG argues that the Audi name is a "most famous" trademark, and that the company is entitled to have a monopoly on the name, Mr. Tardera said. The
automaker is arguing that the bank's use of the trademark dilutes the Audi name as an identifier of Audi AG's products, he said.
Though Mr. Klimek did not discuss the antidilution act, he said that "the main issue is that people are confused by (Bank Audi) using the word 'Audi,' which has a
famous meaning for Audi AG."
Attorneys for Bank Audi USA said they do not consider Audi a brand worthy of protection under the antidilution law. "We certainly don't agree it's a sufficiently
famous trademark that is entitled to this protection," Mr. Tadera said. "And second, even if it is sufficiently famous, that our use has not in essence diluted their
ability to have their customers identify Audi with their products."
Because the antidilution act is relatively new, there have been few court decisions about it, and none have reached the Supreme Court.
Defense attorneys say that it is very unusual for a judge to take so long to issue a decision, and that they do not know when they can expect a judgment. What's
more, when a decision is reached, it may not strictly favor either side, the attorneys say.
"The judge can decide that we have the right to continue to use the name, but perhaps not in a particular narrow area of financing, for example car loans or
something like that," Mr. Tardera said. "At this point the options available to the judge are varied. It's not all or nothing. It may be something in between."
Meanwhile, Utah state officials have approved the application by VW Credit Inc., a Volkswagen subsidiary, for a bank charter to operate as Audi Bank. Like
BMW, which last year created BMW Bank of North America, a branchless bank in Salt Lake City, Volkswagen hopes to set up an industrial loan corporation in
Utah, which has less restrictive laws on these types of charters than other states.
The fact that Volkswagen Bank USA, which would be headquartered in Salt Lake City, is so close to operating as Audi Bank further rankles Mr. Audi, who says
he is upset that Volkswagen intends to use a slight variation of Bank Audi USA's name.
"I don't care if they do business as Volkswagen Bank," he said. "It's their right. I have no reason to object to that. But Audi Bank USA is something I strongly
object to, and I don't think it should be permitted, because it is exactly our name by changing the order of the words."
Mr. Audi also said he is investigating his legal options in Utah.
Copyright c 2001 Thomson Financial. All Rights Reserved. http://www.americanbanker.com
GRAPHIC: photo, Joseph Audi
LOAD-DATE: August 14, 2001
Elder Member
Joined: May 2001
Posts: 13,206
Likes: 0
Thanks Den!!! Interesting etymology, didn't know the latin stem, meant "listen," as in audible...
Ironic, really, considering how poorly AoA listens to its customers and their subsequent dismal rankings in satisfaction... >:-(
Member
Joined: Mar 2000
Posts: 2,696
Likes: 0
I would avoid an Audi-run bank at all costs!
I just imagine that they would operate like many Audi dealer service departments:
"You want to cash a check? I can give you an appointment in 6-8 weeks."
"You say there's a discrepancy in your account balance? I'm sorry, we cannot reproduce the problem."
"You want to cash a check? I can give you an appointment in 6-8 weeks."
"You say there's a discrepancy in your account balance? I'm sorry, we cannot reproduce the problem."
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