Northwest Airlines v. NWA Federal Credit Union

Citation: Northwest Airlines v. NWA Fed. Credit Union, 2004 U.S. Dist. LEXIS 17766 (D. Minn. Sept. 2, 2004).

Factual Background
Plaintiff airline and defendant credit union (named after plaintiff) had a mutually beneficial relationship since 1938. Plaintiff gave defendant the exclusive opportunity to market its banking services to plaintiff's employees and to lease office facilities on plaintiff's property in return for an advantageous payroll float benefit. Defendant operated as Northwest Airlines Employee Credit Union until 1988 when it changed its name to NWA Federal Credit Union. Plaintiff had used the mark NWA for many years before this name change. Defendant federally registered the mark NWA FEDERAL CREDIT UNION in 1997.

In 1998, defendant began a marketing strategy to align itself more closely with plaintiff, which included adopting a reverse red tail logo, with plaintiff's approval, which was similar to plaintiff's compass logo and the livery of plaintiff's planes. Over the years, plaintiff provided defendant with samples of its trademarks along with standards and guidelines for their use. Plaintiff and defendant marketed their services on their websites at "nwa.com" and "nwafcu.org," respectively.

In early 2003, due to its poor financial condition, plaintiff requested an 8% royalty from defendant for the continued use of plaintiff's marks. Defendant refused and plaintiff demanded that defendant cease all use of its marks. A few months later, defendant received approval from banking authorities to expand its membership to all airline employees and changed its name to Wings Financial Credit Union, but kept NWA Federal Credit Union as a division.

Trial Court Proceedings
The parties filed cross-motions for summary judgment on plaintiff's claims of unfair competition, dilution, and cybersquatting. The court initially noted that plaintiff had protectable rights in its federally registered marks NWA, the compass logo, and the livery of its planes. The court agreed with plaintiff that defendant used its logo and the livery of its planes under an implied license that was terminable at will. Because defendant's continued use of these marks was unauthorized, the court presumed a likelihood of confusion and enjoined defendant's use of them. However, genuine issues of material fact existed on whether defendant used the NWA mark under an implied license from plaintiff and, if not, whether defendant's use of NWA in the name NWA FEDERAL CREDIT UNION caused a likelihood of confusion.

Regarding plaintiff's dilution claims, the court denied summary judgment as to all marks due to genuine issues of material fact on the issue of "actual dilution." Finally, the court granted defendant's motion for summary judgment on plaintiff's ACPA claim regarding the name "nwafcu.org" because plaintiff failed to establish a bad-faith intent to profit on defendant's part. The court also questioned whether use of NWAFCU in a domain name was confusingly similar to plaintiff's NWA mark.

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