This article is from SRN News
By Jonathan Stempel
(Reuters) – The North Carolina lender that bought much of Silicon Valley Bank following its March 2023 seizure was sued for trademark infringement on Wednesday by the collapsed bank’s former parent.
SVB Financial Trust said First Citizens BancShares never acquired or got permission to use the Silicon Valley Bank name, chevron logo, svb.com domain name and “Make Next Happen Now” slogan when it bought many of the bank’s assets at a discount, in a transaction arranged by the Federal Deposit Insurance Corp.
The lawsuit in San Francisco federal court seeks to reclaim SVB’s marks, and obtain damages and royalties to distribute to creditors. SVB emerged from Chapter 11 bankruptcy in November.
In a statement, Raleigh, North Carolina-based First Citizens said it acquired the SVB brand assets, including the trademarks and domain name, from the FDIC in March 2023, and will defend its ownership in court.
SVB is also suing the FDIC to recover $1.93 billion of deposits it claims the agency seized illegally.
Silicon Valley Bank failed in the wake of a bank run spurred by worries about capital levels, after rising interest rates caused big losses in its bond and mortgage portfolio.
Its $209 billion of assets made the collapse one of the largest in U.S. banking history, and disrupted many technology startups.
In its complaint, SVB noted that acquirers of failed banks often stop using failed banks’ names because consumers view those names negatively.
It cited JPMorgan Chase’s retiring the First Republic Bank name after that bank, which also catered to Silicon Valley, was seized less than two months after Silicon Valley Bank.
JPMorgan also jettisoned the Washington Mutual name after buying much of that savings and loan, which had $307 billion of assets when it failed in 2008.
SVB said First Citizens may have felt differently because it had little presence in California and no experience running a business like Silicon Valley Bank.
To avoid having to expand organically or market its unfamiliar name, First Citizens “chose to tap into Silicon Valley Bank’s historic position as the industry leader for banking services in the innovation economy,” the complaint said.
First Citizens’ share price has more than tripled since the Silicon Valley Bank takeover.
The case is SVB Financial Trust v First Citizens Bank & Trust Co, U.S. District Court, Northern District of California, No. 25-02267.
(Reporting by Jonathan Stempel in New York; Editing by Daniel Wallis)
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