Bank v. Bank

• Decision Date: 27 July 2010
• Docket Number: Civil Action No. 10–2249.
• Citation: 742 F.Supp.2d 532
• Parties: ALLIANCE BANK, Plaintiff,v.NEW CENTURY BANK, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

742 F.Supp.2d 532

ALLIANCE BANK, Plaintiff,
v.
NEW CENTURY BANK, Defendant.

Civil Action No. 10–2249.

United States District Court, E.D. Pennsylvania.

July 27, 2010.

[742 F.Supp.2d 536]

Manny D. Pokotilow, Salvatore R. Guerriero, Caesar Rivise Bernstein Cohen & Pokotilow Ltd., Philadelphia, PA, for Plaintiff.Darius C. Gambino, DLA Piper Rudnick Gray Cary U.S., LLP, Philadelphia, PA, for Defendant.

OPINION SLOMSKY, District Judge.

+-----------------+
                ¦TABLE OF CONTENTS¦
                +-----------------+
                

I. INTRODUCTION 537
                II. FINDINGS OF FACT 537
                

 A. The Parties 537
                 B. Alliance's Products and Services 538
                 C. Alliance's Mark CUSTOMER FIRST 538
                

 i. Advertising CUSTOMER FIRST 538
                 ii. Registration of Mark CUSTOMER FIRST 540
                

 D. New Century's Products and Services 540
                 E. New Century's Mark CUSTOMERS 1ST BANK 541
                

 i. Advertising CUSTOMERS 1ST BANK 541
                 ii. Attempted Registration of Mark CUSTOMERS 1ST BANK and 542
                 Similar Marks
                

 F. New Century's Name Change 543
                 G. Commonality of “Customer” and “First” in the Banking and 544
                 Financial Industries
                

III. LEGAL STANDARD 544
                

 A. Jurisdiction 544
                 B. Preliminary Injunction 545
                

IV. CONCLUSIONS OF LAW 545
                

 A. Alliance is Likely to Succeed on the Merits of its Trademark 546
                 Claim
                

 i. Alliance Owns a Valid and Legally Protectable Service Mark 546
                

 a. Alliance Did Not Fraudulently Obtain the Mark 550
                 b. Third Party Usage 551
                 c. The Doctrines of Non–Use, Mutilation, and Abandonment 553
                 are Inapplicable
                

 ii. New Century's Use of the Name Customers 1st Bank Creates a 554
                 Likelihood of Confusion
                

 a. Factor 1: Similarity of the Marks 555
                 b. Factor 2: Strength of the Mark 558
                 c. Factor 3: Care and Attention Expected of Consumers 559
                 d. Factor 4: Length of Time Defendant Has Used the Mark 560
                 e. Factor 5: Intent of Defendant 561
                 f. Factor 6: Evidence of Actual Confusion 563
                 Factor 7: Whether Goods Are Marketed Through the Same
                 g. Channels and Factor 8: Extent to Which Targets of the 563
                 Parties' Sales Efforts are the Same
                 Factor 9: Relationship of the Goods in the Minds of
                 h. Consumers 564
                 Factor 10: Other Facts Suggesting the Public Might
                 i. Expect the Prior Owner to Manufacture Both Products 564
                 j. Balancing of Factors 565
                

 B. Irreparable Harm to Alliance 565
                 C. Irreparable Harm to New Century 566
                 D. The Public Interest 567
                

V. ALLIANCE IS REQUIRED TO POST A BOND 567
                VI. CONCLUSION 567
                

[742 F.Supp.2d 537]

I. INTRODUCTION

Before the Court is Plaintiff Alliance Bank's Motion for Preliminary Injunction (Doc. No. 2). On May 14, 2010, Plaintiff Alliance Bank (“Alliance”) commenced this action against Defendant New Century Bank (“New Century”) alleging claims for trademark infringement, false designation of origin, and unfair competition under the Lanham Act, 15 U.S.C. § 1051, et seq., and for violations of state law of the Commonwealth of Pennsylvania. These claims arise from New Century's recent adoption and use of the name CUSTOMERS 1^ST BANK in connection with banking and financial services. On the same day that Alliance filed the Verified Complaint (Doc. No. 1), Alliance also filed a Motion for Preliminary Injunction pursuant to Federal Rule of Civil Procedure 65(a).

On June 2, 2010, Defendant New Century filed a Response in Opposition to the Motion for Preliminary Injunction (Doc. No. 16). On June 9, 2010, Alliance filed a Reply in Support of the Motion (Doc. No. 17). On June 17 and 18, 2010, the Court held a hearing on the Motion for Preliminary Injunction.¹ In addition, on June 29, 2010, the Court held oral argument on the Motion. After considering the testimony and exhibits offered by the parties at the hearings and their filings and arguments in this case, and for the reasons that follow, the Court will grant Alliance's Motion for Preliminary Injunction.

II. FINDINGS OF FACTA. The Parties

Plaintiff Alliance Bank is a Pennsylvania corporation with its principal place of business located at 541 Lawrence Road, Broomall, Pennsylvania. (Verified Complaint at ¶ 3; Testimony of Dennis Cirucci [“Cirucci”], Plaintiff's President and CEO, Transcript of Hearing, June 17, 2010 [“Tr. 06/17/10”], at 5:15–16.) Alliance is a wholly owned subsidiary of Alliance Bank Corp. of Pennsylvania, and renders community banking services to individuals and businesses. ( Id. at 5:6–7, 17–24; 43:7–8.) Alliance has branches in Delaware County and Chester County, Pennsylvania. Branches are located in the towns of Lawrence Park, Concordville, Havertown, Springfield, Lansdowne, Secane, Newtown Square, Upper Darby, and Paoli. (Plaintiff's Declaration of Dennis Cirucci (Doc. No. 11) Exhibit [“Cirucci Ex.”] 45.) Customers of Alliance are located in forty-one (41) states and in Puerto Rico. (Cirucci, Tr. 06/17/10 at 28:12–16.) A large percentage of Alliance's business is conducted over the internet. ( Id. at 32:1–3.)

Defendant New Century, d/b/a Customers 1^st Bank, is a Pennsylvania corporation with its principal place of business located at 99 Bridge Street, Phoenixville, Pennsylvania. (Plaintiff's Hearing Exhibit [“Pl. Ex.”] 46 at ¶ 3.) New Century also offers

[742 F.Supp.2d 538]

community banking services to individuals and businesses. (Testimony of Warren Taylor [“Taylor”], Defendant's Executive Vice President and President of Community Banking, Tr. 06/17/10 at 291:22–24.) Like Alliance, New Century has branches in Delaware County and Chester County, Pennsylvania. Branches are located in the towns of Phoenixville, Kimberton, Newtown Square, Wayne, and Malvern. (Pl. Ex. 46 at ¶ 3.) With the exception of the Newtown Square branch, which is directly across the street from a branch of Alliance, all of New Century's branches are located more than three and one half (3.5) miles away from an Alliance branch. (Taylor, Tr. 06/17/10 at 203:9–17; Cirucci, Tr. 06/17/10 at 31:6–12.) New Century also provides on-line banking services. (Testimony of Richard Ehst [“Ehst”], Defendant's President and COO, Tr. 06/17/10 at 173:20–22.) Approximately seventy-five percent (75%) of New Century's customers reside within one-mile of a branch location, and the other twenty-five percent (25%) “could be just about anywhere.” ( Id. at 203:8.)

B. Alliance's Products and Services

Alliance is a “community bank,” which is a financial institution formed to serve the constituents of the communities in which it exists. (Cirucci, Tr. 06/17/10 at 45:17–46:1.) Alliance provides a full range of banking services, including checking and savings accounts, certificates of deposits, online banking, loan products such as mortgage loans, home equity loans, commercial loans and lines of credit, and other related products and services customary in the banking industry. ( Id. at 5:17–24; 6:3–9.) Alliance's customers consist of individuals and businesses residing in Delaware and Chester Counties, as well as individuals residing in Bucks County, Pennsylvania. ( Id. at 28:14–16.) These customers include small and large businesses, non-profit entities, municipalities, governmental units, families, seniors and retirees. ( Id. at 43:17–44:3.)

Alliance offers three (3) types of checking accounts: (1) “Affordable Checking,” (2) “Customer First Checking,” and (3) “Off To College Checking.” ( Id. at 53:9–18.) The “Customer First Checking” account is Alliance's primary retail product. ( Id. at 8:25–9:1.) Currently, Alliance has approximately four thousand (4,000) “Customer First Checking” accounts in use with deposits of approximately $45,000,000. ( Id. at 9:8–14.) In total, from 2007 until March 2010, Alliance's deposits have grown by $56,000,000 or sixteen percent (16%). (Testimony of Cirucci, Transcript of Hearing, June 18, 2010 [“Tr. 06/18/10”] at 10:8–12.)

C. Alliance's Mark CUSTOMER FIRSTi. Advertising CUSTOMER FIRST

Since March 2006, Alliance has been using the mark CUSTOMER FIRST in two respects: (1) to identify all of its banking services as a whole and (2) to identify one of its products, “Customer First Checking.” (Cirucci, Tr. 06/17/10 at 7:14–8:8.) A Customer First Checking Account gives consumers a preferred rate on other products of Alliance. ( Id. at 17:17–23.) Mr. Cirucci provided extensive and creditable testimony as to how the Customer First Checking Account “serves as the hub for all of [Alliance's] other related products,” and how it “acts as a bridge and brings them together.” ( Id. at 8:24–9:7; 17:3–23; 22:23–23:6; 62:12–21.) As he explained, Alliance uses the Customer First Checking Account as the centerpiece of the bank, and all other banking products act as “spokes” stemming from the center. ( Id. at 153:1–14.) For example, products such as safety deposit boxes, home equity loans,

[742 F.Supp.2d 539]

and mortgage loans are tied to a consumer's Customer First Checking Account. If a customer rents a safety deposit box, the yearly fee would be paid from the Customer First Checking Account. If a customer has an ATM or debit card, it would be tied to the Customer First Checking Account. If a customer has a home equity or mortgage loan, payments would be made from the Customer First Checking Account. ( Id. at 17:7–23.)

Alliance considers the mark to be a valuable symbol of the bank's representation to its customers and goodwill. ( Id. at 11:7–10.) CUSTOMER FIRST is spelled using an ordinary font, and Alliance often uses a blue and yellow color scheme in conjunction with its general advertising and this specific mark. ( Id. at 60:5–9.) Sometimes Alliance advertises in black and white rather than in color. ( Id. at 60:16–17.)

Alliance has publicized CUSTOMER FIRST in a variety of ways. For example, in 2006, Alliance placed advertisements promoting its CUSTOMER FIRST banking services on four-foot (4') by five-foot (5') posters at about two-dozen bus shelters throughout the Delaware Valley. ( Id. 24:16–25:19; 162:5–8; Pl. Ex. 2.) Bus shelter advertisements featured the slogan, “Customer First Banking Just Hit Home.” (Pl. Ex. 2; Cirucci, Tr. 06/17/10 at 24:22–25:14.) These advertisements were displayed for at least one year and cost $5,300...