Peoples Fed. Sav. Bank v. Bank

• Citation: 750 F.Supp.2d 217
• Decision Date: 09 August 2010
• Docket Number: Civil Action No. 10–11002–NMG.
• Parties: PEOPLES FEDERAL SAVINGS BANK, Plaintiff,v.PEOPLE'S UNITED BANK, Defendant.
• Court: U.S. District Court — District of Massachusetts

750 F.Supp.2d 217

PEOPLES FEDERAL SAVINGS BANK, Plaintiff,

v.PEOPLE'S UNITED BANK, Defendant.

Civil Action No. 10–11002–NMG.

United States District Court, D. Massachusetts.

Aug. 9, 2010.

Lee C. Bromberg, Erik Paul Belt, Lori J. Shyavitz, McCarter & English, LLP, Boston, MA, for Plaintiff.

MEMORANDUM & ORDER

GORTON, District Judge.

This case arises from a trademark dispute between plaintiff Peoples Federal Savings Bank (“Peoples Federal”) and defendant Peoples United Bank (“Peoples United”). Peoples Federal objects to the rebranding by Peoples United of several recently-acquired banks in Eastern Massachusetts with the latter's mark. Before the Court is plaintiff's motion for a preliminary injunction.

I. Factual Background

The following facts are as alleged in the complaint, plaintiff's motion in support of preliminary injunction, defendant's opposition that to motion and plaintiff's reply thereto (each with various accompanying exhibits).

Peoples Federal is a community bank that operates exclusively in Eastern Massachusetts. It was chartered in 1888 and became a federally insured savings and loan institution in 1937. Its headquarters are in Brighton but it has grown steadily over the years and now operates branches in Allston, Brookline, Jamaica Plain, Norwood and West Roxbury. It has a loan portfolio of approximately $375 million and assets of over $500 million.

Peoples Federal began using the term “Peoples” in its name and service marks in 1937 and is the only continuous user of the PEOPLES mark for banking services in Eastern Massachusetts since that time. It owns six Massachusetts registrations for its marks, including PEOPLES, PEOPLES FEDERAL and PEOPLES FEDERAL SAVINGS BANK, but those registrations were not granted until June 15, 2010, the day plaintiff filed the instant suit. It promotes those marks through considerable advertising and marketing efforts, involvement in community activities and charitable giving. Through its dedication to personal service, high profile and community involvement, it has attracted the media and been portrayed favorably in the press.

Defendant Peoples United Bank was founded in 1842 in Bridgeport, Connecticut. It has used the word “People” in its name for approximately 80 years. Until 2007, it was called “Peoples Bank” but because it planned to expand beyond Connecticut, it changed its name to “Peoples United Bank” to distinguish itself from other banks that also used the word “People” in their titles. Peoples United asserts that it is the only bank in the country that uses that particular name.

On April 16, 2010, Peoples United acquired from the Federal Deposit Insurance Corporation (“FDIC”) the deposits and banking operations of the failed Butler Bank, which had branches in north central Massachusetts, and Butler Bank's subsidiary, Marlborough Cooperative, which had branches in Marlborough (collectively, “Butler”). On the following day, Peoples United began rebranding all former Butler branches and re-opened them under its own name, Peoples United Bank. Specifically, it covered the exterior signage at the branches of the acquired banks and replaced them with signs bearing the name “Peoples United Bank”. It also replaced the failed banks' interior posters and brochures with the Peoples United name and logo. Butler's failure, the first of a Massachusetts bank in 16 years, was covered prominently in the press, as was Peoples United's acquisition of its operations and rebranding of its branches.

II. Procedural History

On June 15, 2010, Peoples Federal filed suit against Peoples United alleging trademark infringement, trademark dilution and unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125(a), as well as violations of Massachusetts statutory and common law. Then, one month later, Peoples Federal moved for a preliminary injunction and temporary restraining order to stop Peoples' United from rebranding the Butler branches, and any other bank branches it might acquire in Eastern Massachusetts, with People United's name, logo or other Peoples-formative marks.

Because plaintiff asserted that the rebranding was to occur on July 19, 2 010, the Court convened an emergency hearing on Friday, July 16, 2010. Counsel for both parties attended the hearing, although, at that time, defendant had not yet responded to plaintiff's motion. At the hearing, defendant's counsel informed the Court that Peoples United had already rebranded the former Butler branches and that it would not take any further action in the immediate future. He also explained that the July 19, 2010, date was based on a misunderstanding and that Peoples United had no plans to execute any further rebranding on that date. Satisfied that the status quo would be maintained, the Court scheduled a status conference and motion hearing for Thursday, July 29, 2010.

At the July 29, 2010, hearing, the Court announced its preliminary findings and invited argument from the parties. Since that hearing, plaintiff has submitted a notice bringing to the Court's attention a recent case involving a trademark dispute between two banks in Pennsylvania, Alliance Bank v. New Century Bank, 742 F.Supp.2d 532, 2010 WL 2991204, 2010 U.S. Dist. LEXIS 76747 (E.D.Pa. July 27, 2010), which the defendant has persuasively argued is distinguishable from this case. Having thoroughly considered the parties' written submissions and oral arguments, the Court now announces its ruling.

III. Legal AnalysisA. Standard of Review

To obtain preliminary injunctive relief under Fed.R.Civ.P. 65, a movant must demonstrate

(1) a substantial likelihood of success on the merits, (2) a significant risk of irreparable harm if the injunction is withheld, (3) a favorable balance of hardships and (4) a fit (or lack of friction) between the injunction and the public interest.

Nieves–Marquez v. Puerto Rico, 353 F.3d 108, 120 (1st Cir.2003) (citation omitted). Likelihood of success on the merits is the critical factor in the analysis and, accordingly, a strong likelihood of success may overcome a “somewhat less” showing of another element. See Weaver v. Henderson, 984 F.2d 11, 12 (1st Cir.1993) (citations omitted); E.E.O.C. v. Astra USA, Inc., 94 F.3d 738 (1st Cir.1996).

In trademark cases, the first factor plays an even greater role because resolution of the other three factors will depend, in large part, on whether the plaintiff is likely to succeed in establishing infringement. Borinquen Biscuit Corp. v. M.V. Trading Corp., 443 F.3d 112, 115 (1st Cir.2006). This focus on likelihood of success is consistent with the idea that, “as a matter of public policy, trademarks should be protected against infringing uses.” Id.

B. Application

1. Likelihood of Success on the Merits

To succeed on a claim of trademark infringement, Peoples Federal must demonstrate that 1) it owns a protectable mark and 2) Peoples United's use of that mark will likely result in consumer confusion. 15 U.S.C. § 1125(a); Borinquen Biscuit, 443 F.3d at 116.

a. Protectability of the PEOPLES mark

To be eligible for trademark protection, a mark must qualify as distinctive. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). In assessing a mark's distinctiveness, courts employ a taxonomy that classifies marks along a spectrum of categories that includes generic, descriptive, suggestive, arbitrary and fanciful marks. Id. at 768, 112 S.Ct. 2753. Generic marks, which fall at the low end of the spectrum, are terms that identify a product but do not distinguish its source, such as “pizza,” “store” or “car.” Such terms, by definition, are never afforded trademark protection. At the other end of the spectrum are suggestive, arbitrary and fanciful marks which, because they identify the particular source of the product, are considered “inherently distinctive” and enjoy automatic trademark protection. Id. Falling in the middle are descriptive marks which convey an “immediate idea of the ingredients, qualities or characteristics of the good” but “are not inherently capable of serving as source-identifiers.” Boston Duck Tours, LP v. Super Duck Tours. LLC, 531 F.3d 1, 13 (1st Cir.2008) (internal citation omitted). Descriptive marks are entitled to protection only if they have acquired distinctiveness or secondary meaning. Id.

Both registered and unregistered trademarks are eligible for protection against infringing uses. Borinquen Biscuit, 443 F.3d at 117; see 15 U.S.C. §§ 1114, 1125. When a party seeks protection for an unregistered mark, it is incumbent on it to demonstrate that the mark is distinctive, either inherently or through acquired secondary meaning. Boston Beer Co. v. Slesar Bros. Brewing Co., 9 F.3d 175, 180 (1st Cir.1993). When a trademark is registered, however, the party's burden is reduced. Because registration of a mark serves as “prima facie evidence” of its validity, the mark enjoys a presumption of inherent distinctiveness. Equine Techs., Inc. v. Equitechnology, Inc., 68 F.3d 542, 545 (1st Cir.1995). That presumption, however, may be rebutted by proof that the mark is merely generic or that it is descriptive and lacks secondary meaning. Calamari Fisheries, Inc. v. The Village Catch, 698 F.Supp. 994, 1007 (D.Mass.1988).

Plaintiff asserts that its PEOPLES mark deserves a presumption of protectability by virtue of its six Massachusetts registrations and continuous use of the mark since 1937. It reasons that it is a “senior user” of the mark and may enforce it against Peoples United which has only recently moved into Eastern Massachusetts.

Plaintiff's claim is illusory for several reasons. As defendant points out, a closer examination of plaintiff's Massachusetts service mark applications reveals that the majority of them were not filed until June 15, 2010, the same day plaintiff filed the instant suit and two months after Peoples United had begun the re-branding of the former Butler branches. Moreover, four other banks in Eastern...