Alleging “free riding” on brand, real estate brokerage @properties seeks injunction and payment of profits gained through alleged “unlawful conduct” against digital mortgage rival.
Chicago-based real estate brokerage @properties is suing rival @mortgage, alleging the digital mortgage company is intentionally “free riding” on the millions of dollars over two decades the brokerage has spent on the @properties brand.
In an April 19 complaint, @properties, the largest brokerage in Illinois, alleges East Peoria, Illinois-based @mortgage is infringing on the @properties trademark and taking advantage of the millions the brokerage and its founders, Thaddeus Wong and Mike Golden, have spent building up the goodwill associated with the brand since its 1999 launch.
According to a legal declaration submitted by Wong, between 2012 and through 2020, @properties spent between $2.5 million and $6.5 million annually to market the @properties brand.
“@mortgage was founded with a vision, apparently, of free riding on the years and years of concerted effort and capital Wong and Golden devoted to building the @properties brand,” the complaint said.
@properties and mortgage company Guaranteed Rate formed a joint venture in 2019 called Proper Rate, through which @properties offers consumers mortgage lending services, including an “industry leading Digital Mortgage,” the complaint said. Proper Rate began originating mortgages in July 2020. @mortgage was founded in 2018, according to LinkedIn.
The complaint alleges that an @mortgage mortgage broker had admitted to instances of consumers believing that @mortgage is affiliated with @properties.
In his declaration, Wong points out similarities between the @properties and @mortgage marks.
“This infringement troubles me as co-CEO of @properties,” Wong said. “The infringing mark is, on its face, similar and likely to lead consumers of mortgage services to confuse the source of those services as rendered by @properties, not @mortgage.”
The complaint’s allegations against @mortgage include federal trademark infringement, federal trademark dilution, federal unfair competition, deceptive practices under Illinois law and common law unfair competition.
@properties seeks a preliminary and permanent injunction against @mortgage prohibiting the company from further infringement, “including making, offering for sale, or selling any products that feature marks confusingly similar to the @properties trademarks, or any other trademarks or trade dress owned by @properties.”
@properties is also asking the court to order @mortgage to pay to @properties “all monetary actual and/or statutory damages sustained and to be sustained by @properties as a consequence of defendant’s unlawful conduct, including lost profits and corrective advertising damages, in an amount to be determined at trial” and “all profits, gains, and advantages obtained by defendant from its unlawful conduct,” plus other damages and costs.
“Real estate service providers can only distinguish themselves and their firms by the quality of service,” Wong said. “The market is so competitive and highly developed that the rates a consumer will find from firm to firm will likely be close to identical.”
“This market is efficient,” he added. “It is true that consumers of real estate services exercise a high degree of care. The purchasing decision, however, comes down to the mortgage broker’s reputation. And that reputation is derived substantially — and in many cases exclusively — from the brokerage firm’s brand identity in the mind of the consumer.”
@properties and @mortgage did not immediately respond to requests for comment. Inman will update this story if and when we hear back.
Read the complaint: