Credit Suisse has cut a deal with the owner of the First Boston trademark to enable the Swiss lender to use the historic brand on its spun-out investment bank.
The Swiss institution announced in October that it intended to separate its capital markets and advisory arm as part of a radical restructuring of the group that has so far failed to win over shareholders.
Credit Suisse had sought to name the business First Boston, referencing the storied Wall Street institution it took control of in 1988 and the combined group’s heyday as a global leader in investment banking.
But during the planning process, the bank discovered the trademark was already claimed by an unrelated business and so decided to name the business CS First Boston.
Lawyers for the Swiss bank put in a petition to the US Patent and Trademark Office to reclaim the brand in October, citing “the continuing stellar reputation of the mark and name ‘First Boston’ and of Credit Suisse in association with that mark and name”.
But on Tuesday, Credit Suisse withdrew its petition after paying the owner of the trademark a fee to use the brand, according to people with knowledge of the arrangement.
“The bank has developed the First Boston trademark and related reputation and goodwill over decades, and will vigorously pursue and defend its rights in this regard,” Credit Suisse said in a statement to the Financial Times.
Credit Suisse’s relationship with First Boston goes back to 1978, when the two businesses set up a joint venture called Credit Suisse First Boston.
Throughout the 1980s, the business was a leader in mergers and acquisitions and employed the likes of Larry Fink, who went on to lead BlackRock, and Richard Handler, the future chief executive of Jefferies.
Credit Suisse took control of the business in 1988 and its New York investment banking arm continued to operate under the Credit Suisse First Boston brand until 2005, with many of its Wall Street traders and advisers still referring to the name informally.
In October, Credit Suisse — which has been buffeted by scandals in recent years — revealed its plan to spin out its capital markets and advisory business under a radical restructuring.
The new business will be run by former Credit Suisse board member Michael Klein, who led the board’s committee in deciding on the investment bank strategy.
Last week, Credit Suisse chair Axel Lehmann said at the FT’s Banking Summit that the group had received several “offers on the table” to back the business and was in discussions with the US Federal Reserve over its balance sheet, structure and governance.
The bank has already said that one investor has pledged $500mn, while the Saudi National Bank has previously said it would consider backing the joint venture after committing to invest $4bn in Credit Suisse.
Shares in the Swiss lender have fallen 35 per cent since the new strategy was unveiled six weeks ago.
In its petition to reclaim the name, Credit Suisse pointed out that the company that owned the First Boston intellectual property — Dominant Brands — had also registered the trademarks of several other historic financial institutions, including EF Hutton, Bank of Boston and Shawmut.
The lawyers wrote that the owner of the brands “adopted the identical mark and name ‘First Boston’ in order to blatantly invoke the reputation of Credit Suisse and its ‘First Boston’ investment banking and financial services operation”.
Dominant Brands did not respond to a request for comment.
Source: Financial Times