UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ECF CASE DEFENDANTS ANSWER AND COUNTERCLAIMS

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK CITIGROUP INC., v. Plaintiff, AT&T SERVICES, INC.; AT&T INTELLECTUAL PROPERTY LLC; and AT&T INTELLECTUAL PROPERTY II, L.P., CASE NO. 1:16-CV-04333-KBF-RLE ECF CASE DEFENDANTS ANSWER & COUNTERCLAIMS Defendants. DEFENDANTS ANSWER AND COUNTERCLAIMS Defendants AT&T Services, Inc., AT&T Intellectual Property LLC, and AT&T Intellectual Property II L.P. (collectively AT&T ), by and through their undersigned counsel, hereby respond to the Complaint of Citigroup Inc. ( Citi ) and assert Counterclaims against Citi as follows: ANSWER Except to the extent expressly admitted herein, AT&T denies each and every allegation in Citi s Complaint. INTRODUCTION 1. Citigroup Inc. ( Citigroup ) is the leading financial services company, with approximately 200 million customer accounts in more than 160 countries and jurisdictions. Citigroup provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. AT&T admits that Citi provides financial products and services. AT&T lacks knowledge or information sufficient to admit or deny the remaining allegations set forth in Paragraph 1 of

the Complaint, and, therefore, denies the same. 2. Since 2004, Citigroup has offered customer loyalty, reward and redemption programs in connection with many of its credit cards, including its credit cards that are cobranded with AT&T, under trademarks consisting of and/or containing the term THANKYOU. Citigroup s THANKYOU customer loyalty, reward, and redemption programs have been extensively advertised and promoted by Citigroup since 2004 and currently have approximately 15 million members in the United States. AT&T admits that Citi has offered credit cards co-branded with AT&T in the past. AT&T lacks knowledge or information sufficient to admit or deny the remaining allegations set forth in Paragraph 2 of the Complaint, and, therefore, denies the same. 3. Despite actual knowledge of Citigroup s substantial use of and exclusive rights in the THANKYOU Marks, Citigroup s use of the marks in connection with AT&T co-branded credit cards, and Citigroup s concerns regarding AT&T s proposed trademarks, AT&T launched a customer loyalty program under the trademarks thanks and AT&T thanks on or about June 2, 2016. AT&T admits that it launched its customer appreciation program called AT&T THANKS on June 2, 2016. AT&T admits that Citi has offered credit cards co-branded with the names AT&T and Citi in the past, some of which offer customers the ability to earn THANKYOU FROM CITI points. AT&T denies the remaining allegations set forth in Paragraph 3 of the Complaint. 4. AT&T s use of the thanks and AT&T thanks trademarks is likely to cause consumer confusion and constitutes trademark infringement, false designation of origin, and unfair competition in violation of Citigroup s rights. 2

5. Citigroup therefore seeks to enjoin AT&T s infringing conduct and to recover damages based on the injury AT&T s conduct has caused to Citigroup as well as AT&T s unjust enrichment. AT&T specifically denies that its conduct is infringing, caused any injury to Citigroup Inc., or that AT&T was unjustly enriched. AT&T lacks knowledge or information sufficient to admit or deny the remaining allegations set forth in Paragraph 5 of the Complaint, and, therefore, denies the same. PARTIES 6. Citigroup Inc. is a corporation organized and existing under the laws of Delaware, having a principal place of business at 388 Greenwich Street, New York, NY 10013. Admitted. 7. AT&T Inc. is a corporation organized and existing under the laws of Delaware, having a principal place of business at 208 South Akard Street, Dallas, TX 75202. Admitted. On July 14, 2016, AT&T Inc. was dismissed from this action. Dkt. 32. 8. AT&T Services, Inc. is a corporation organized and existing under the laws of Delaware, having a principal place of business at 175 East Houston Street, San Antonio, TX 78205. AT&T admits that AT&T Services, Inc. is a corporation organized and existing under the laws of Delaware, but denies that its principal place of business is at 175 East Houston Street, San Antonio, TX 78205. 3

9. Upon information and belief, AT&T Intellectual Property, LLC is a limited liability company organized and existing under the laws of Delaware, having a principal place of business at 645 E. Plum Lane, Reno, NV 89502. Admitted. 10. AT&T Intellectual Property II, L.P. is a limited partnership organized and existing under the laws of Nevada, having a principal place of business at 645 E. Plum Lane, Reno, NV 89502. Admitted. JURISDICTION AND VENUE 11. This is an action for infringement of federally registered trademarks in violation of Section 32 of the Lanham Act, 15 U.S.C. 1114; for federal unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a); for injury to business reputation under N.Y. General Business Law 360-l; for deceptive trade practices under N.Y. General Business Law 349; for trademark infringement in violation of the common law of New York; and for unfair competition in violation of the common law of New York. AT&T admits that Citi has brought claims pursuant to 15 U.S.C. 1114, 1125(a); N.Y. Gen. Bus. L. 360-l, 349; and New York common law of trademark and unfair competition. AT&T denies that Citi has any valid claim. 12. This court has subject matter jurisdiction over the federal claims relating to trademark infringement, false designation of origin and unfair competition under 15 U.S.C. 1121(a) and 28 U.S.C. 1331, 1338(a) and 1338(b). Admitted. 13. This court also has subject matter jurisdiction under 28 U.S.C. 1332(a)(1) as the parties are from different States and the matter in controversy exceeds $75,000. Admitted. 4

14. This court has supplemental jurisdiction over the New York state claims pursuant to 28 U.S.C. 1367(a), because such claims are so related to the federal claims that they form part of the same case or controversy and derive from a common nucleus of operative facts. Admitted. 15. Venue is proper in this court pursuant to 28 U.S.C. 1391(b) because Defendants have transacted business in and/or have committed tortious conduct within this judicial district, because the events or omissions giving rise to the claims occurred, in part, in the Southern District of New York. AT&T admits that venue is proper in this Court pursuant to 28 U.S.C. 1391(b) because AT&T has transacted business in this judicial district, and because the alleged events or omissions giving rise to the claims are alleged to have occurred, in part, in the Southern District of New York. AT&T denies the remaining allegations set forth in Paragraph 15 of the Complaint. CITIGROUP S THANKYOU CUSTOMER LOYALTY PROGRAMS AND MARKS 16. For many years, Citigroup has used trademarks consisting of and/or containing the term THANKYOU, including THANKYOU, CITI THANKYOU, CITIBUSINESS THANKYOU. THANKYOU FROM CITI, and THANKYOU YOUR WAY, in connection with a variety of customer loyalty, reward, incentive and redemption programs (collectively, the THANKYOU Marks ). AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 16 of the Complaint and, therefore, denies the same. 17. For example, Citigroup has offered THANKYOU-branded credit cards and stored value pre-paid cards. Approximately 7 million customers have THANKYOU-branded credit cards. In addition, Citigroup customers also earn THANKYOU reward points by making financial transactions through qualifying checking accounts, credit card accounts, or other financial accounts. THANKYOU customers can redeem their reward points for a diverse range of goods, services, and experiences, including, among other things, redeeming points to pay for goods and services from participating merchants, purchasing tickets for concerts, movies and sporting events, and obtaining gift cards for participating third-party businesses. Citigroup s 5

customers can also share points with other customers and transfer THANKYOU points to thirdparty customer loyalty programs. AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 17 of the Complaint and, therefore, denies the same. 18. Citigroup is the owner of, among other United States trademark applications and registrations, the following registrations for trademarks comprised of and/or containing the term THANKYOU with the United States Patent and Trademark Office ( USPTO ). Copies of the registration certificates for these marks are attached as Exhibit A. Mark Registration Number Services THANKYOU Reg. 3,249,982 Promoting the goods and services of others through credit card customer loyalty, reward and redemption programs. Filing Date Status 12/2/2004 Incontestable CITI THANKYOU Reg. 3,948,111 Credit card services. 11/20/2007 Incontestable THANKYOU Reg. 4,432,766 Providing gift cards and stored value pre-paid card services. 2/22/2010 Registered THANKYOU Reg. 3,946,014 Providing credit card services. 02/22/2010 Incontestable CITI THANKYOU Reg. 3,956,034 Promoting the goods and services of others through administration of incentive reward and redemption programs by distributing rewards for credit and debit card use, and for banking and wealth management customer loyalty. CITIBUSINESS THANKYOU Reg. 4,215,563 Promoting the goods and services of others through administration of incentive reward and redemption programs by distributing rewards for credit card use. Proving credit card services. 06/22/2010 Registered 03/18/2011 Registered 6

Mark THANKYOU YOUR WAY Registration Number Reg. 4,782,490 Services Promoting the goods and services of others through administration of incentive reward and redemption programs by distributing rewards for credit and debit card use, and for banking and wealth management customer loyalty; advertising and marketing services provided by means of indirect methods of marketing communications, namely, social media applications. Credit card services. 4,745,268 Promoting the goods and services of others through administration of incentive reward and redemption programs by distributing rewards for credit cards and debit card use, and for banking and wealth management customer loyalty; promoting the goods and services of others through credit card customer loyalty, reward and redemption programs. Filing Date Status 06/14/2013 Registered 07.31.2013 Registered AT&T states that the documents attached as Exhibit A to the Complaint appear to be registration certificates, which speak for themselves. AT&T lacks knowledge or information sufficient to admit or deny the remaining allegations set forth in Paragraph 18 of the Complaint and, therefore, denies the same. 7

19. Citigroup s registrations referenced above are valid and subsisting, in full force and effect, and constitute prima facie and/or conclusive evidence of Citigroup s exclusive right to use the marks in commerce in the United States in connection with the services specified in the registrations. The allegations in Paragraph 19 of the Complaint consist of legal conclusions to which no response is required, but to the extent that any response is required, AT&T denies the same. 20. Additionally, Citigroup s registrations referenced above that are incontestable pursuant to the provisions of Section 15 of the Lanham Act, 15 U.S.C. 1065, constitute conclusive evidence of the validity of those registrations. The allegations in Paragraph 20 of the Complaint consist of legal conclusions to which no response is required, but to the extent that any response is required, AT&T denies the same. 21. Citigroup has offered services under one or more of the THANKYOU Marks since at least as early as 2004. AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 21 of the Complaint, and, therefore, denies the same. 22. Citigroup has spent considerable time, effort and resources in advertising and promoting its services using its THANKYOU Marks. Among other advertising and promotional activities, Citigroup has advertised its THANKYOU Marks on a continuous basis for many years in national media outlets and has partnered with well-known brands and retailers throughout the United States to advertise and publicize the services it offers under the THANKYOU Marks. AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 22 of the Complaint, and, therefore, denies the same. 8

23. Citigroup spends tens of millions of dollars annually on advertising and marketing related to the services it offers under the THANKYOU Marks. AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 23 of the Complaint, and, therefore, denies the same. 24. As a result of its longstanding and widespread use of the THANKYOU Marks, in addition to the federal registrations identified above, Citigroup has acquired significant common law rights in its THANKYOU Marks. The allegations in Paragraph 24 of the Complaint consist of legal conclusions to which no response is required, but to the extent that any response is required, AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 24 of the Complaint and, therefore, denies the same. 25. As a result of Citigroup s longstanding, extensive, and widespread use, marketing and promotion of its THANKYOU Marks and services, Citigroup s THANKYOU Marks are widely recognized by the general consuming public as a designation of source for Citigroup s high quality financial services and customer loyalty, reward, incentive, and redemption programs. The allegations in Paragraph 25 of the Complaint consist of legal conclusions to which no response is required, but to the extent that any response is required, AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 25 of the Complaint and, therefore, denies the same. AT&T S HISTORY OF COLLABORATION WITH CITIGROUP 26. Citigroup has partnered and continues to partner with AT&T in connection with the promotion of Citigroup s THANKYOU customer loyalty, reward, and redemption programs. For example, customers of the AT&T Universal Card can earn THANKYOU points through Citigroup s THANKYOU program based on money spent on purchases made with their card. AT&T uses its trademarks alongside Citigroup s trademarks, including Citigroup s THANKYOU trademark, in connection with its advertising and promotion of the AT&T 9

Universal Card. Attached as Exhibit B is a page from the AT&T website regarding the AT&T Universal Card that discusses the partnership between AT&T and Citigroup and shows Citigroup s THANKYOU trademark alongside AT&T s trademarks. AT&T admits that Citi has offered credit cards co-branded with AT&T in the past, some of which offer customers the ability to earn THANKYOU FROM CITI points. AT&T admits that Exhibit B appears to be a copy of the webpage http://www.universalcard.com/us/cards/ucs/personal/cb_thankyou.jsp. AT&T denies the remaining allegations set forth in Paragraph 26 of the Complaint. 27. Since at least as early as 1998, Citigroup and AT&T have issued co-branded credit cards. In or around 1998, Citigroup and AT&T launched the AT&T Universal Card. In 2014, Citigroup and AT&T launched the AT&T Access Card and in 2015 they launched the AT&T Access More Card. On all of these types of credit cards, Citigroup s trademarks appear alongside AT&T s trademarks. Attached as Exhibit C is a page from the AT&T website regarding the AT&T Universal Card that shows examples of two credit cards that are co-branded by Citigroup and AT&T. Both of these credit cards show both Citigroup s logo and AT&T s logo. Attached as Exhibit D is an example of marketing material for the AT&T Access More Card that discusses the co-branded card and shows an example of an AT&T Access More credit card on which both Citigroup s and AT&T s logos appear. AT&T admits that Citigroup and AT&T have offered co-branded credit cards, including the AT&T Universal Card, AT&T Access Card, and AT&T Access More Card. AT&T states that Exhibit C to the Complaint appears to be a screenshot, which speaks for itself. AT&T states that Exhibit D to the Complaint appears to be a document, which speaks for itself. AT&T denies the remaining the allegations set forth in Paragraph 27 of the Complaint. 28. There are approximately 1.7 million customers in the United States who have credit cards that are co-branded by Citigroup and AT&T. AT&T lacks knowledge or information sufficient to admit or deny the allegations set forth in Paragraph 28 of the Complaint and, therefore, denies the same. 10

29. Citigroup and AT&T engage in extensive marketing and publicity efforts related to their co-branded credit cards, including through national advertising campaigns. 30. As a result of Citigroup and AT&T s partnership and co-branding efforts and the marketing efforts associated therewith, consumers are accustomed to seeing the Citigroup and AT&T names and trademarks together and are familiar with the association between these two companies. AT&T s ADOPTION OF THE thanks and AT&T thanks TRADEMARKS 31. In late March 2016, Citigroup became aware of AT&T s purported intent to use the AT&T THANKS trademark. Shortly thereafter, Citigroup contacted AT&T to express its concern that the proposed AT&T THANKS trademark was confusingly similar to Citigroup s THANKYOU Marks. 32. On April 7, 2016, after it was aware of Citigroup s concern about its use of the AT&T THANKS trademark, AT&T Intellectual Property II, L.P. filed an application with the USPTO to register the trademark AT&T THANKS in connection with providing incentive award programs for customers for the purpose of promoting and rewarding loyalty on an intentto-use basis (the AT&T THANKS Application ). A printout of the information regarding the AT&T THANKS Application from the USPTO s Trademark Electronic Search System is attached as Exhibit E. AT&T admits that AT&T Intellectual Property II, L.P. filed an application to register AT&T THANKS on April 7, 2016. AT&T states that Exhibit E to the Complaint appears to be a printout of information regarding the AT&T THANKS Application from the USPTO s Trademark Electronic Search System, which speaks for itself. AT&T denies the remaining allegations set forth in Paragraph 32 of the Complaint. 11

33. After AT&T filed the AT&T THANKS Application, Citigroup and AT&T exchanged letters and engaged in additional telephone discussions regarding AT&T s planned use of the AT&T THANKS mark. Citigroup again expressed its concern that the proposed AT&T THANKS mark was confusingly similar to Citigroup s THANKYOU Marks, particularly in light of the similarity between the services identified in the AT&T THANKS Application and Citigroup s THANKYOU loyalty, reward, and redemption programs. While the parties were trying to resolve this matter, AT&T launched a customer appreciation program using the thanks and AT&T thanks trademarks. AT&T admits that Citi and AT&T discussed AT&T s use of AT&T THANKS, and that AT&T launched its AT&T THANKS customer appreciation program. AT&T denies the remaining allegations set forth in Paragraph 33 of the Complaint. 34. Specifically, on June 2, 2016, AT&T Inc. issued a press release announcing the launch of AT&T thanks, which it describes as an appreciation program for its customers. The press release describes several entertainment benefits that will be available to AT&T customers in the summer of 2016 and states that surprise offers and offers tailored to customers based on their services and packages with AT&T would be provided at a later date. A copy of the press release is attached as Exhibit F. AT&T states that Exhibit F to the Complaint appears to contain a copy of a June 2, 2016 press release announcing the launch of AT&T THANKS, which speaks for itself. AT&T admits that AT&T THANKS launched on June 2, 2016. AT&T denies the remaining allegations set forth in Paragraph 34 of the Complaint. 35. On June 2, 2016, AT&T Inc. also posted a page on its website describing the launch of the AT&T thanks program. This page uses the following logo in connection with the description of the customer appreciation program. Notably, in the logo used by AT&T, the term thanks appears on a different line and in a different color than the AT&T housemark. The use of all lowercase letters and the font in which the term thanks is written are similar to the manner in which Citigroup often presents its THANKYOU Marks. A copy of the page from AT&T s website is attached as Exhibit G. 12

AT&T admits that it launched a webpage for its AT&T THANKS customer appreciation program on June 2, 2016. AT&T states that Exhibit G to the Complaint purports to contain a copy of the webpage, which speaks for itself. AT&T denies the remaining allegations set forth in Paragraph 35 of the Complaint. 36. AT&T launched its customer loyalty program under the thanks and AT&T thanks marks despite actual knowledge of Citigroup s substantial use of and exclusive rights in the THANKYOU Marks as well as knowledge of Citigroup s concerns regarding AT&T s proposed trademarks. AT&T admits that it launched a customer appreciation program called AT&T THANKS. The remaining allegations in Paragraph 36 of the Complaint consist of legal conclusions to which no response is required, but to the extent that any response is required, AT&T denies the same. 37. Citigroup has not consented to or authorized Defendants to use the thanks and/or AT&T thanks marks. The allegations in Paragraph 37 of the Complaint consist of legal conclusions to which no response is required, but to the extent that any response is required, AT&T denies the same. 38. AT&T s use of the thanks and AT&T thanks marks in connection with a customer loyalty program is likely to cause confusion or mistake or deceive consumers into thinking that AT&T and its products and/or services marketed using the thanks and AT&T thanks marks are authorized by, or affiliated, connected or otherwise associated with Citigroup and/or its services. 13

39. The likelihood of consumer confusion or mistake or deception is exacerbated by Citigroup and AT&T s history of co-branding credit cards and services and the use of Citigroup s THANKYOU marks in connection with those co-branded credit cards and services. 40. AT&T s conduct described above has left Citigroup with no option other than to file this action to protect its valuable rights in its THANKYOU Marks and to prevent consumer confusion. 41. As a result of AT&T s unlawful conduct complained of herein, Citigroup has suffered and will continue to suffer irreparable injury to its THANKYOU Marks and to the goodwill and business reputation associated with its THANKYOU Marks. 42. As a result of AT&T s unlawful conduct complained of herein, Citigroup has been financially damaged and will continue to be damaged financially. 43. As a consequence of AT&T s unlawful conduct, Defendants have also been unjustly enriched. 44. AT&T s unlawful conduct is and continues to be knowing, deliberate and willful. 14

COUNT I FEDERAL TRADEMARK INFRINGEMENT 45. Citigroup incorporates by reference the allegations contained in paragraphs 1 through 44 of this Complaint. AT&T answers and incorporates by reference Paragraphs 1 through 44 of its Answer, as though fully set forth here. 46. Defendants have, without the consent of Citigroup, used in commerce trademarks that are confusingly similar to Citigroup s THANKYOU Marks in connection with the sale, offering for sale, distribution and/or advertising of goods and/or services. 47. Defendants use of the thanks and AT&T thanks trademarks is likely to cause confusion or to cause mistake or to deceive consumers into thinking that Defendants and their products and/or services are authorized by, or affiliated, connected or otherwise associated with Citigroup and/or its services. 48. The aforesaid acts of Defendants constitute trademark infringement in violation of Section 32 of the Lanham Act, 15 U.S.C. 1114. 49. The aforesaid acts of Defendants have been intentional, willful and in bad faith. 15

50. unlawful acts. Citigroup has been and is likely to be damaged by Defendants infringing and 51. The acts of Defendants complained of herein have caused and, unless enjoined by this Court, are likely to continue to cause Citigroup to suffer irreparable harm. 52. Citigroup has no adequate remedy at law and is entitled to and seeks injunctive relief as a result thereof pursuant to 15 U.S.C. 1116. COUNT II FEDERAL UNFAIR COMPETITION AND FALSE DESIGNATION OF ORIGIN 53. Citigroup incorporates by reference the allegations contained in paragraphs 1 through 52 of this Complaint. AT&T answers and incorporates by reference Paragraphs 1 through 52 of its Answers as though fully set forth here. 54. The aforesaid acts of Defendants are likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of Defendants or Defendants goods or commercial activities with Citigroup or its goods or services, or as to the origin, sponsorship, or approval of Defendants goods or services by Citigroup. 16

55. The aforesaid acts of Defendants constitute false designation of origin and false and misleading descriptions and representations in violation of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a). 56. The aforesaid acts of Defendants have been intentional, willful, and in bad faith. 57. unlawful acts. Citigroup has been and is likely to be damaged by Defendants infringing and 58. The acts of Defendants complained of herein have caused and, unless enjoined by this Court, are likely to continue to cause Citigroup to suffer irreparable harm. 59. Citigroup has no adequate remedy at law and is entitled to and seeks injunctive relief as a result thereof pursuant to 15 U.S.C. 1116. COUNT III INJURY TO BUSINESS REPUTATION UNDER N.Y. GEN. BUS. L. 360-l 60. Citigroup incorporates by reference the allegations contained in paragraphs 1 through 59 of this Complaint. AT&T answers and incorporates by reference Paragraphs 1 through 59 of its Answers, as though fully set forth here. 17

61. Defendants unauthorized use of the thanks and AT&T thanks marks in connection with the goods and/or services they provide has injured and continues to injure Citigroup s business reputation, in violation of N.Y. General Business Law 360- l. 62. The aforesaid acts of Defendants have been intentional, willful, and in bad faith. 63. unlawful acts. Citigroup has been and is likely to be damaged by Defendants infringing and 64. The acts of Defendants complained of herein have caused and, unless enjoined by this Court, are likely to continue to cause Citigroup to suffer irreparable harm. relief. 65. Citigroup has no adequate remedy at law and is entitled to and seeks injunctive COUNT IV DECEPTIVE TRADE PRACTICES UNDER N.Y. GEN. BUS. L. 349 66. Citigroup incorporates by reference the allegations contained in paragraphs 1 through 65 of this Complaint. AT&T answers and incorporates by reference Paragraphs 1 through 65 of its Answers, as though fully set forth here. 18

67. Defendants unauthorized use of the thanks and AT&T thanks marks in connection with the goods and/or services it provides is deceptive and misleading and is likely to damage the public. 68. The aforesaid acts of Defendants have been intentional, willful, and in bad faith. 69. unlawful acts. Citigroup has been and is likely to be damaged by Defendants infringing and 70. The acts of Defendants complained of herein have caused and, unless enjoined by this Court, are likely to continue to cause Citigroup to suffer irreparable harm. relief. 71. Citigroup has no adequate remedy at law and is entitled to and seeks injunctive COUNT V COMMON LAW TRADEMARK INFRINGEMENT 72. Citigroup incorporates by reference the allegations contained in paragraphs 1 through 71 of this Complaint. AT&T answers and incorporates by reference Paragraphs 1 through 71 of its Answers, as though fully set forth here. 19

73. The aforesaid acts of Defendants constitute trademark infringement in violation of New York common law. 74. The aforesaid acts of Defendants have been intentional, willful, and in bad faith. 75. unlawful acts. Citigroup has been and is likely to be damaged by Defendants infringing and 76. The acts of Defendants complained of herein have caused and, unless enjoined by this Court, are likely to continue to cause Citigroup to suffer irreparable harm. 77. Citigroup has no adequate remedy at law and is entitled to and seeks injunctive relief as a result thereof. COUNT VI COMMON LAW UNFAIR COMPETITION 78. Citigroup incorporates by reference the allegations contained in paragraphs 1 through 77 of this Complaint. AT&T answers and incorporates by reference Paragraphs 1 through 77 of its Answers, as though fully set forth here. 20

79. The aforesaid acts of Defendants constitute unfair competition in violation of New York common law. 80. The aforesaid acts of Defendants have been intentional, willful, and in bad faith. 81. unlawful acts. Citigroup has been and is likely to be damaged by Defendants infringing and 82. The acts of Defendants complained of herein have caused and, unless enjoined by this Court, are likely to continue to cause Citigroup to suffer irreparable harm. 83. Citigroup has no adequate remedy at law and is entitled to and seeks injunctive relief as a result thereof. WHEREFORE, AT&T denies that Citi is entitled to any of the relief requested in the Complaint, and respectfully requests that Citi s request for judgment and damages be denied, AT&T be awarded costs and fees incurred in defending against Citi s Complaint, and AT&T be granted such other relief as the Court deems appropriate. 21

granted. AFFIRMATIVE DEFENSES First Affirmative Defense (Failure to State a Claim) The Complaint fails, in whole or in part, to state a claim upon which relief can be Second Affirmative Defense (Lack of Injury) Citi s claims and the relief sought are barred, in whole or in part, because Citi has not sustained any damages and has suffered no harm caused by AT&T. Third Affirmative Defense (Trademark Misuse) Citi s claims are barred, in whole or in part, by the doctrine of trademark misuse. Fourth Affirmative Defense (Unclean Hands) Citi s claims are barred, in whole or in part, by the doctrine of unclean hands. Fifth Affirmative Defense (Laches and Undue Delay) Citi s claims are barred, in whole or in part, by laches and/or Citi s undue delay. Sixth Affirmative Defense (Waiver) Citi s claims are barred, in whole or in part, by waiver. Seventh Affirmative Defense (Acquiescence) Citi s claims are barred, in whole or in part, by acquiescence. 22

COUNTERCLAIMS Pursuant to Federal Rule of Civil Procedure 13, AT&T alleges the following against Citi: NATURE OF THE ACTION AND RELIEF SOUGHT 1. Counterclaimant AT&T seeks declaratory relief from this Court to prevent Citi from attempting to monopolize for its own exclusive use the common English phrase thank you. Citi claims to own a number of THANKYOU-formative marks, and asserts that its ownership of these alleged marks entitles it to prevent AT&T from using the word thanks for products and services in an industry wholly unrelated to Citi s credit card business. In particular, Citi alleges that AT&T s use of AT&T THANKS for its customer appreciation program infringes Citi s rights in its alleged marks. 2. In view of the foregoing, AT&T requires a declaration from this Court that AT&T s use of AT&T THANKS does not infringe, under federal or state law, any of Citi s rights in its THANKYOU-formative marks. PARTIES 3. AT&T Services, Inc. is a corporation organized and existing under the laws of Delaware, having a principal place of business is at 208 South Akard Street, Dallas, TX 75202. 4. AT&T Intellectual Property, LLC is a limited liability company organized and existing under the laws of Delaware, having a principal place of business at 645 E. Plum Lane, Reno, NV 89502. 5. AT&T Intellectual Property II, L.P. is a limited partnership organized and existing under the laws of Nevada, having a principal place of business at 645 E. Plum Lane, Reno, NV 89502. 6. Citigroup Inc. is a corporation organized and existing under the laws of Delaware, having a principal place of business at 388 Greenwich Street, New York, NY 10013. 23

JURISDICTION AND VENUE 7. This counterclaim arises under Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), and New York common law trademark infringement and unfair competition, and the Declaratory Judgment Act, 28 U.S.C. 2201 02. 8. 9. This Court has jurisdiction under 28 U.S.C. 1331 and 1338. This court has supplemental jurisdiction over the New York state claims pursuant to 28 U.S.C. 1367(a), because such claims are so related to the federal claims that they form part of the same case or controversy and derive from a common nucleus of operative facts. 10. Venue is proper in this District under 28 U.S.C. 1391. FACTUAL BACKGROUND The AT&T THANKS Customer Appreciation Program 11. On June 2, 2016, AT&T launched AT&T THANKS, a customer appreciation program developed at great expense by AT&T for over a year. AT&T THANKS is designed to thank AT&T s telecommunications and video customers, and provides a host of experiential entertainment-related perks to them, which reinforce the value of AT&T s core product offerings, thereby promoting customers loyalty and satisfaction. Unlike customers in pointsbased programs, all AT&T customers receive the benefits of AT&T THANKS without any signup process. 12. AT&T selected the name AT&T THANKS after extensive consumer research, and because it was a clear, descriptive phrase that communicated AT&T s desire to thank its customers, as well as being short and easy to spell and pronounce. AT&T also conducted a trademark search. 24

13. On June 2, 2016, AT&T THANKS launched to great fanfare, generating significant press and social media coverage. AT&T THANKS has been subject of a national advertising campaign since its launch. Citi s Card- and Point-Based THANKYOU FROM CITI Marks 14. Citi alleges that AT&T THANKS will cause confusion with the marks identified in Paragraph 18 of the Complaint (the THANKYOU FROM CITI Marks ). 15. Citi has also filed an opposition to AT&T s application to register AT&T THANKS with the United States Patent & Trademark Office. 16. Citi is a bank and uses its THANKYOU FROM CITI program in conjunction with credit cards. 17. Since 2004, Citi has been operating a points-based credit card reward program under these marks in which customers earn points based on how much they spend that they can redeem for merchandise or cash. 18. Upon information and belief, both before and after Citi launched its THANKYOU FROM CITI program, numerous third parties have used trademarks and trade names consisting of or incorporating variations on thank you, thanks, and thank (collectively, THANK- Formative Marks ) in connection with a variety of products and services, including loyalty or incentive programs. 19. In fact, AT&T and DIRECTV (which was acquired by AT&T in 2015) both used THANK-Formative Marks in the past, as early as 1990. 20. Citi has no evidence of actual confusion regarding the use of any THANK- Formative Marks by AT&T or DIRECTV. 25

21. Citi never contacted anyone at AT&T or DIRECTV regarding their use of any THANK-Formative Marks other than AT&T THANKS. 22. Because of the multitude of third-party uses of THANK-Formative Marks for loyalty and incentive programs, any particular THANK-Formative Mark for such services is necessarily entitled only to narrow protection, encompassing only that particular use for the particular services. 23. Given the crowded marketplace of THANK-Formative Marks for loyalty and incentive programs, and related goods and services, consumers are readily able to differentiate between marks whose only common element is a variation on the common English word thank, based on other differences between the marks, such as additional words, house marks, and unique fonts, the associated goods or services, or the market context. 24. AT&T THANKS and THANKYOU FROM CITI are depicted differently. Each is depicted alongside world-famous house marks, and the colors, bolding, and fonts differ. 25. Citi and AT&T are in different industries: Citi is a bank, whereas AT&T is a telecommunications and entertainment company. 26. Citi previously has admitted that there is no likelihood of confusion between its THANKYOU FROM CITI Marks and other THANK-Formative Marks used within the banking industry. 27. In its prosecution of its applied-for THANKYOU mark (Serial No. 78-756331), Citi explained that credit card services and services related to credit card processing... are highly specialized and targeted to a specific and discreet purchasing public. 26

28. The AT&T THANKS program also differs substantially from THANKYOU FROM CITI. AT&T THANKS is not points-based and requires no sign-up, whereas THANKYOU FROM CITI requires customers to sign up for an eligible credit card. Further, Citi s customers receive points, and therefore benefits, only insofar as they spend money on their credit card. 29. In its prosecution of its applied-for THANKYOU mark (Serial No. 78-756331), Citi explained that its consumers are highly sophisticated, and that they take particular care in the research and selection of credit cards especially due to the level of competition with regard to interest rates as well as the myriad of benefits offered through loyalty reward programs. 30. Upon information and belief, there has been no evidence suggesting that a single consumer has been confused about the relationship between THANKYOU FROM CITI and AT&T THANKS. FIRST COUNTERCLAIM Declaratory Judgment of Non-infringement (28 U.S.C. 2201 et seq.) 31. AT&T incorporates by reference 1 31 of these Counterclaims as if fully set forth herein. 32. By reason of Citi s efforts to prevent AT&T from using thanks, filing suit against AT&T, and opposing AT&T s application to register AT&T THANKS with the United States Patent & Trademark Office, there now exists between the parties an actual and justiciable controversy concerning whether AT&T has infringed any alleged rights of Citi in its alleged THANKYOU FROM CITI Marks, requiring declaratory relief. 33. A declaration is necessary and appropriate at this time to affirm AT&T s right to use AT&T THANKS as the name for its customer appreciation program, and bar Citi from 27

asserting that it has the right to prevent AT&T and third parties from using thank you or thanks to identify goods and services related to thanking customers. 34. While Citi owns valid trademarks for THANKYOU FROM CITI and certain variations thereof, to the extent Citi has any trademark rights in the phrase thank you, such rights are extremely narrow and do not bar third parties from using thank you or thanks in conjunction with thanking customers 35. Further, there is no likelihood of confusion between AT&T s use of AT&T THANKS and Citi s use of THANKYOU FROM CITI Marks. 36. 37. AT&T has no adequate remedy at law. Accordingly, AT&T seeks, pursuant to 28 U.S.C. 2201 and 2202, a judgment from this Court that AT&T s use of AT&T THANKS has not infringed, and does not infringe, under federal or state law, any of Citi s alleged rights in or to its THANKYOU FROM CITI Marks. PRAYER FOR RELIEF WHEREFORE, AT&T prays that this Court: 38. 39. Grant judgment in AT&T s favor on all claims asserted by Citi; Declare that AT&T s use of AT&T THANKS has not infringed, and does not infringe, any of Citi s alleged common law or federally registered THANKYOU FROM CITI Marks, whether under federal or state law; 40. Award AT&T its costs and attorneys fees incurred in this action in accordance with 15 U.S.C. 1117; and 41. Grant such other relief as the Court deems just and proper. * * * 28

AT&T reserves the right to raise additional defenses, counterclaims, cross-claims, and third-party claims not asserted herein of which it may become aware through discovery or otherwise. DEMAND FOR JURY TRIAL Pursuant to Rule 38 of the Federal Rules of Civil Procedure, AT&T hereby demands trial by jury in this action of all issues so triable. Dated: July 15, 2016 /s/ Dale M. Cendali, P.C. Dale M. Cendali, P.C. dale.cendali@kirkland.com Johanna Schmitt johanna.schmitt@kirkland.com Phil Hill phil.hill@kirkland.com KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, NY 10022 Tel.: (212) 446-4800 Fax: (212) 446-4900 Daniel Bond (pro hac vice) daniel.bond@kirkland.com KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 6054 Tel.: (312) 862-2000 Fax: (312) 862-2200 Attorneys For Defendants AT&T Services, Inc.; AT&T Intellectual Property LLC; and AT&T Intellectual Property II, L.P. 29