HomeTrust Bank of Asheville, North Carolina, and HomeTown Bank, of Roanoke, Virginia, have settled their summer-long service mark feud by an amicable agreement and a cessation of litigation in the Virginia federal courts.

In May and June, the parties exchanged correspondence regarding HomeTown’s claim that HomeTrust could not use its name and mark in Virginia because the two banks’ names would likely be confused by the public.  HomeTrust disagreed with HomeTown’s assertions of likely confusion.  HomeTrust also noted that it had received a federal registration for its HOMETRUST BANK mark, and had begun using its mark in Virginia, well before HomeTown had begun operations in Virginia under its name.  To this day, HomeTown has never received a federal or state service mark registration for its name.

When the two banks could not resolve their differences, HomeTrust brought an action for declaratory judgment of service mark priority and non-infringement in the U.S. District Court for the Eastern District of Virginia in Alexandria.  In response, HomeTown Bank brought an action for false designation of origin and common law trademark infringement, among other claims, in the U.S. District Court for the Western District of Virginia in Roanoke.  HomeTown also requested a preliminary injunction, temporarily prohibiting HomeTrust (until trial) from expanding its operations under its federally registered name and mark in Virginia.

On the eve of the hearing on HomeTown’s preliminary injunction motion, the parties settled their differences.  Under the parties’ agreement, HomeTrust must use the phrase “Roanoke Division” in connection with its HOMETRUST BANK mark on office signage and in advertising within eight counties and two cities in the Roanoke Valley area of Southwestern Virginia, and on web site landing pages and micro sites specifically targeting the Roanoke Valley.  The parties also agreed to refrain from using the logos and color schemes associated with one another’s marks.  HomeTrust is otherwise free to use its HOMETRUST BANK service mark in Virginia and elsewhere in any way it chooses.  No money changed hands under the agreement.

Dana Stonestreet, Chairman, President and CEO stated, “HomeTrust is most appreciative of the quality of the legal representation it received in this matter.  We amicably resolved this dispute to put the distraction of litigation behind us, and will proceed as planned with our expansion into the greater Roanoke Valley as HOMETRUST BANK.”

Jonathan Hudis, lead counsel for HomeTrust remarked that “HomeTrust was able to achieve this successful result, without extended litigation, because the bank protected its service mark assets with federal registrations early on and carefully documented its initial and continuing entrance into the Virginia market under its mark.”