Peoples Federal Savings Bank v Peoples United Bank, Civil Action No. 10-11002-NMG, 2010 U.S. Dist. LEXIS 81135 (D. Mass. Aug. 9, 2010) (Gorton, D.J.) [Preliminary Injunction].
Peoples Federal Savings Bank (“Peoples Federal”) brought suit for trademark infringement and moved for a preliminary injunction against Peoples United Bank (“Peoples United”), claiming that Peoples United had infringed on its Massachusetts-registered marks. The District Court (Gorton, D.J.) denied the motion for preliminary injunction.
Plaintiff Peoples Federal is a community bank that operates exclusively in Eastern Massachusetts. It has used the term “Peoples” in its name since 1937 and it owns six Massachusetts registrations for its marks. Defendant Peoples United is based in Connecticut and has used the term “Peoples” in its name for about 80 years. Until 2007, it was known as “Peoples Bank.” But as it expanded outside of Connecticut, the defendant changed its name to Peoples United Bank. In April 2010, Peoples United acquired the failed Butler Bank, which had branches in North-Central Massachusetts and Marlborough. Peoples United immediately began rebranding the Butler branches and re-opened them under the name Peoples United Bank. Two months later, Peoples Federal filed suit and moved for a preliminary injunction.
The Court analyzed the motion under the well-established, four-prong standard for a preliminary injunction. Likelihood of success is the key prong in analyzing a motion for preliminary injunction and, as the court explained, the importance of this inquiry is further magnified in trademark cases. To succeed on its trademark-infringement claim, Peoples Federal had to establish that (1) its mark is entitled to trademark protection and (2) that Peoples United’s mark is likely to cause consumer confusion.
Despite having a registered mark, the District Court held that Peoples Federal had to prove that its mark was distinctive. Parties with a registered mark typically enjoy a presumption of distinctiveness. The Plaintiff, however, faced this higher burden because it did not attempt to register its marks until the day it filed suit. Further, another bank has operated in Western Massachusetts since 1885 under a similar name—PeoplesBank.
To determine whether Peoples Federal’s mark was distinctive and entitled to trademark protection, the Court analyzed the mark along the generic-to-fanciful spectrum. Because the term “Peoples” is common in bank names (the 12th most commonly used term in bank names), the Court determined that the mark was only descriptive. A descriptive mark is entitled to protection only if it has acquired a secondary meaning. The Court explained that although the Plaintiff’s mark had acquired secondary meaning through the company’s advertising and charity work, the mark only has secondary meaning in the neighborhoods where Peoples Federal has branches. Thus, the mark is unenforceable outside Allston/Brighton, Jamaica Plain, Norwood, and West Roxbury.
After ruling on where the Plaintiff’s mark could receive protection, the Court then analyzed the likelihood of confusion between the parties’ marks. The Court determined that there is not a likelihood of confusion, particularly given the dissimilarity of the parties’ logos (which use different color schemes, fonts, and graphics), consumers’ tendency to research before selecting a bank, the absence of bad faith by the Defendant, and the lack of evidence showing actual confusion.