T-Mobile Sues AT&T's AIO for Riding Its Magenta Coattails
T-Mobile is suing AT&T prepaid brand AIO Wireless for trademark infringement, alleging that the shade of pink AIO uses in its advertising is meant to confuse consumers.
Since the 1990's, T-Mobile has aligned its marketing with the color magenta—T-Mobile CEO John Legere has taken to wearing a magenta T-Mobile T-shirt under his blazer during press events—and the carrier says that AIO, by using a similar shade, is trying to take a ride on its coattails.
"In early 2013, T-Mobile publicly disclosed plans to compete against the incumbent telecommunications providers in a new way: by offering telecommunications services without the need for consumers to enter into a two-year or annual service contract," T-Mobile said in a suit filed in Texas, Aug. 23.
"The dominant telecommunications provider, AT&T, responded by setting up a wholly owned subsidiary, AIO, which—out of all of the colors in the universe—chose magenta to begin promoting no-contract wireless communications services in direct competition with T-Mobile," it continued. "[AIO's] use of magenta to attract T-Mobile's customers is likely to dilute T-Mobile famous magenta color trademark, and to create initial interest confusion as to the source or affiliation of AT&T's subsidiary business."
Legere took to Twitter Aug. 28 to poke fun at AT&T, posting images of Crayon boxes—a common one, "with all the colors to choose from," and "the Crayon box that AT&T must have been using," filled with only pink ones.
The suit has spurred countless conversations about the exact shades, somewhere between pink and red, used by the two carriers. Forbes writer Matt Hickey went so far as to open Photoshop and get technical, pointing out that AIO uses #972A51, while T-Mobile uses #F50181. (The AIO logo is more maroon—what might be called cabernet—but its coverage map is depicted in much lighter shades of pink.)
But, of course, the more salient point is that T-Mobile, after years of being a disaster, is suddenly proving to be some real competition to its larger rivals, and no one wants that work undone less than Legere.
Legere, after taking the CEO position in 2012, promised big changes, and this year T-Mobile did away with the industry model of subsidizing devices for users who sign two-year agreements. It began offering monthly payment plans for devices, launched a Long Term Evolution (LTE) network, began selling the iPhone, and introduced Jump, a plan that lets users upgrade their phones twice a year, instead of every two years.
On July 16, AT&T responded with Next, a program that lets customers purchase a new smartphone every year "with no down payment, no activation fee, no upgrade fee and no financing fees."
Two days later, Verizon introduced Edge, a plan that it said offers an "affordable way to upgrade to the newest device."
In August, T-Mobile announced that during its most recent fiscal quarter, it—for the first time in three years—added more customers during the quarter than it lost.
Legere has been up-front and feisty about making clear that T-Mobile isn't chasing after the customers of number-three carrier Sprint, but of the second-place AT&T.
On May 1, celebrating the completion of T-Mobile's merger with MetroPCS, Legere told Bloomberg Television that T-Mobile has AT&T "straight in our headlights."
"I think by focusing on them," he added, "the big winner is consumers."
AT&T launched AIO (which stands for All in One) May 9, calling it a "new nationwide service for consumers interested in a first-class wireless experience at a value price, without an annual contract."