The U.S. Court of Appeals for the Second Circuit upheld the District Court’s decision that neither Patsy’s Italian Restaurant nor Patsy’s Pizzeria, located in New York City, has exclusive rights to the name PATSY’S. The Court noted that this was the culmination of a long legal struggle “involving a host of trademark and unfair competition claims” all relating to the name “Patsy’s.”
Patsy’s Italian Restaurant and Patsy’s Pizzeria, both New York establishments, coexisted until they both decided to sell sauce under the name Patsy’s, which caused considerable consumer confusion. One of the parties’ affiliates started in business in 1933, the other in 1944.
Patsy’s Italian Restaurant sued for trademark infringement, unfair competition, and injury to business reputation. Patsy’s Pizzeria counterclaimed seeking cancellation of Patsy’s Italian Restaurant trademark registrations including a registration for PATSY’S for sauces.
Following a jury trial, the District Court permanently enjoined both Patsy’s Italian Restaurant and Patsy’s Pizzeria from using the term PATSY’S alone in connection with their establishments to reduce consumer confusion, as the parties could not come to an agreement on their own. The permanent injunction requires that the Plaintiffs refer to their restaurant services using the mark PATSY'S ITALIAN RESTAURANT, and defendants are required to use the mark PATSY'S PIZZERIA. The unusual aspect of this decision is that neither party wanted this outcome and both parties are enjoined from using the term “Patsy’s” by itself as a trademark for their products. The appellate court considered both sides’ arguments about the scope of the injunction, but concluded that the District Court did not err in granting the injunction, including an injunction of the senior user.
The Second Circuit decision states that Patsy’s Pizzeria “…can no longer protect its rights to the name Patsy's due to the long period of use by Patsy's Italian Restaurant…that fact does not alter the likelihood of confusion by consumers. Having allowed the consumer confusion to develop, no party can now complain about the district court's attempt to minimize the confusion. This is particularly true given our earlier admonition to the parties that ‘both sides . . . would be well advised to minimize the risk of confusion by identifying their restaurants by the complete names.’”
Will this now push the parties to come to some agreement on the use of "Patsy's" alone?