(Bloomberg) -- Activist investor Engine Capital Management is asking a judge to block another corporate agitator from calling itself Engine No. 1, saying the name could cause confusion in the investment community.
San Francisco-based Engine No. 1, formed in December by tech investor Chris James, has threatened a proxy fight at Exxon Mobil Corp.
Engine Capital alleges in a lawsuit filed this month in Manhattan federal court that, because both firms are shareholder activists, Engine No. 1 is engaging in willful trademark infringement. Engine Capital is seeking to bar the defendant from using Engine No. 1 or similar names, plus triple damages, according to the complaint.
Engine No. 1 hasn’t filed a response to the lawsuit yet, according to court records. “We believe these claims are without merit and have no further comment,” Engine No. 1 said in an emailed statement.
A representative for Engine Capital declined to comment.
Engine Capital has used its name for its management and investment services, including as a shareholder activist, dating back to 2013, according to the lawsuit. It said it has gained “notoriety and influence” since then for its Engine-branded family of funds and activist campaigns.
Name Confusion
As a result of the reputation it has built for itself, Engine Capital said it has “successfully negotiated board representation with many publicly traded companies.” It has pushed for changes at several companies, including last year at Matrix Service Co. and CIM Commercial Trust Corp., according to data compiled by Bloomberg.
Engine No. 1’s name is bound to cause confusion if, for example, the two activist funds were to launch proxy contests at the same company, Engine Capital alleges. Engine No. 1’s website has already caused confusion, or will in the future, according to the complaint.
James started Engine No. 1 with the goal of investing in companies that can have a positive impact on society and the environment, the firm said in December. James previously co-founded one of the biggest technology hedge funds, Partner Fund Management, in 2004.
In December, Engine No. 1, with the support of the California State Teachers’ Retirement System, said it planned to nominate four directors at Exxon, arguing the oil giant was underperforming, needed to diversify its business, and align executive pay with shareholders’ interests, among other measures.
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