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Co-operative Bank's CEO says legal action against NZACU to try to prevent it using 'Co-op' name is to stop confusion and bank's good name being taken advantage of

Business
Co-operative Bank's CEO says legal action against NZACU to try to prevent it using 'Co-op' name is to stop confusion and bank's good name being taken advantage of

By Gareth Vaughan

The Co-operative Bank is concerned the New Zealand Association of Credit Unions' plans to use the name "Co-op" will undermine - in the eyes of the public - the $8.7 million it has spent rebranding since changing its name from PSIS and obtaining bank registration in late 2011 to distance itself from the non-bank financial sector.

This is key to the bank's case laid out out by the Co-operative Bank's CEO Bruce McLachlan in an affidavit. The case is being heard at the High Court in Auckland today.

The Co-operative Bank is applying for a court injunction against the NZACU to as it strives to stop NZACU using the names "Co-op", "Co-op Services NZ", "Co-op Insurance NZ" and "Co-op Money NZ".

"I was and remain particularly concerned that the Co-operative Bank brand will be significantly compromised by the public associating it with the NZACU's Co-op brands and thus the NZACU's credit union members, leading to confusion and deception," McLachlan says.

"Such an association would undermine the very real benefits that Co-operative Bank has gained in distancing itself from the non-bank financial sector including through its rebranding and marketing programmes and by registering as a bank."

"To the best of my knowledge, neither the NZACU nor any of its members have ever previously branded themselves using the words Co-operative or Co-op. In my view, the NZACU's adoption of the co-op brand, and its apparent intent to market its product and services more widely, are likely to cause confusion in the marketplace and thereby enable it to take advantage of the goodwill that Co-operative Bank has built in its brand, including the security that a banking licence provides to depositors," McLachlan says.

'There is no scope for any material confusion or deception to arise'

In its submission the NZACU says it has consistently used the terms "co-operative", "financial co-operatives", and "co-op" on its website and in public documents, prospectuses and press releases since well before the Co-operative Bank changed its name from PSIS in 2011.

NZACU is an industry body that represents credit unions and mutual building societies.

It's owned by 17 member credit unions and has five associate members which are one additional credit union, plus four building societies.

"NZACU does not trade with the public. It only trades with its member credit unions and mutual building societies," NZACU says.

It says the New Zealand Association of Credit Unions name was no longer apt when membership was extended to mutual building societies in 2011, thus it decided to update its branding.

"It chose 'Co-op Money NZ' as the new brand for its business with its members and for its public advocacy role on behalf of its members. It chose 'Co-op Services NZ' for business-to-business services provider FACTS Ltd, and 'Co-op Insurance NZ'  for Credit Union Insurance Ltd. These new brands were considered apt and factually accurate to describe the operations of those three businesses, all of which are co-operatives," NZACU says.

It goes on to argue that the Co-operative Bank is trying to obtain a monopoly over the words "co-operative" and "co-op" in the financial services sector, and even in public advocacy for such services.

"The courts jealously guard against attempts by a party to obtain monopoly rights in a descriptive terms such as 'co-operative' or 'co-op'."

"As NZACU is an industry body which does not trade with the public, and which clearly describes its nature and role on its website and in its press releases in its advocacy role, there is no scope for any material confusion or deception to arise. NZACU has taken steps to ensure that is the case," NZACU says.

Meanwhile, McLachlan says NZACU's CEO Henry Lynch and chief operating officer Jonathan Lee initiated contact with the Co-operative Bank in April to discuss "business opportunities."

McLachlan said this was shortly after he had become aware of NZACU's planned rebranding, and he told Lynch and Lee he had no interest in discussing business opportunities at least until the issue of NZACU's rebranding had been resolved.

Justice Raynor Asher reserved his decision.

See a previous story on this dispute here.

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3 Comments

What next the BNZ or, for that matter, the ANZ wanting to prevent anyone else using NZ in their title

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Make any new product and put an "i" in front of it and see what apple does.

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If cooperative bank wanted to be known as coop bank wouldn't they have registered that name?

Ever heard or seen them use Coop bank in any of their ads?

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