When Christopher A. Paterson started a small real-estate financing company on Wisconsin Avenue NW about a year ago, he pulled the name Sears Financial Services Inc. "out of the air," his attorney says.
The coincidence was a little too close for Sears, Roebuck & Co. Sears, which has done business under that name for more than a century, made a big plunge into the growing financial services business two years ago by buying the securities firm of Dean Witter Reynolds and the real estate firm of Coldwell Banker.
Yesterday, Sears, Roebuck accused Sears Financial Services Inc. of trademark infringement and asked a federal judge to bar the local firm from using the Sears name in any of its business activities.
In a suit filed in U.S. District Court, Sears, Roebuck said Christopher A. Paterson, an officer of the local company, "adopted and commenced use of the name Sears with the intention of competing unfairly with" Sears, Roebuck.
Sears Financial Services, 3419 Wisconsin Ave. NW, has a gross income of $3,000 a week. The company is incorporated in the District and Maryland and has reserved the same name in 28 other states.
The use of the the name Sears by the local company is a trademark infringement, the Chicago retailer charged.
Accusing the local concern of unfair practices, Sears, Roebuck said the local company's attorney sent two letters to the retailer's Chicago headquarters "containing threats of litigation over Sears, Roebuck's name." One of these letters demanded that the retailer "immediately cease and desist from the use of the name, Sears Financial Services, in all advertising and business operations. If unauthorized use continues, we will institute legal proceedings for injunctive and compensatory relief."
In a second letter making the same request, the attorney, J. Michael Slocum, added, "Mr. Paterson is amenable to discussions concerning the use of Sears Financial Services."
The lawsuit also includes a copy of an advertisement run by the local firm in The Washington Post. The Sears name in the ad closely resembles the type style used in Sears, Roebuck advertisements.
"By virtue of its long use, since at least 1886, of the name and mark Sears in its business and by virtue of widespread public recognition of the name," Sears, Roebuck is "the owner" of the name Sears, the suit said. As a result, the local company should be barred from using it, it said.
Paterson's office said he was out of town and declined to give out any information, including Paterson's corporate title. However, Paterson's attorney, Slocum, expressed surprise when he learned about the suit, saying he had just met with Sears, Roebuck's attorneys last week over the use of the name.
Slocum said Paterson chose the name Sears randomly. "Literally, he pulled it out of the air. If you look at the phone book, you see dozens of Sears businesses, not all to do with Sears Roebuck ."
When Paterson realized the retailer was advertising its new financial activities as Sears Financial Services, Slocum said Paterson was "forced to take defensive steps and file incorporation papers with various names relating to Sears Financial Services" in jurisdictions across the country.