FICO Loses Appeal, Credit-Score Range Trademark

An appeals court upheld an earlier ruling from a U.S. District Court, which found that the Minneapolis-based credit-scoring company's competitors did not infringe on its trademarks.

A federal appeals court has reaffirmed a lower court's decision that said that Minneapolis-based Fair Isaac Corporation (FICO)'s competitors did not infringe on its trademarks-and that ordered the U.S. Patent and Trademark Office to cancel a FICO trademark.

Stamford, Connecticut-based VantageScore Solutions, LLC-which produces the VantageScore credit-scoring system-on Wednesday announced that a three-judge panel from the U.S. Court of Appeals for the Eighth Circuit upheld an earlier ruling and described the decision as “a complete court victory.”

The case stems back to 2006, when FICO filed a suit accusing its competitors' joint credit-scoring system as being too similar to its own and claiming that it violated one of the company's trademarks. FICO lost its trademark suit in November 2009, at which time a jury found that VantageScore's 501-990 credit-score range was not confusingly similar to FICO's system, which has a credit-score range of between 300 and 850.

FICO sought a new trial, but a U.S. District Court judge denied the request in May 2010. The judge also ordered the U.S. Patent and Trademark Office to cancel FICO's “300-850” trademark after the company's appeal was concluded.

As a result of the appeals court's decision, the district court's order to cancel FICO's trademark registration remains in place, according to VantageScore.

A report by the Star Tribune indicates that FICO believes that the court's decision will have little impact on its business.

“These lookalike scores can differ significantly from a consumer's actual FICO score, misleading consumers into believing they have higher or lower FICO scores than actually is the case,” FICO told the Minneapolis newspaper. “As recent economic events have demonstrated, consumers need clarity about their creditworthiness now more than ever.”

FICO is Minnesota's 40th-largest public company based on revenue for the fiscal year that ended in September 2009, which totaled $630.7 million. The company reported revenue of $605.6 million for the fiscal year that ended last September.