Opinion ID: 622599
Heading Depth: 3
Heading Rank: 1

Heading: Denial of Preliminary Injunctive Relief

Text: In assessing Peoples Federal's motion, the district court weighed the four preliminary injunction factors: (1) the plaintiff's likelihood of success on the merits, (2) the likelihood of irreparable harm, (3) the balance of relevant equities, and (4) the effect of the court's action on the public interest. See Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 32 (1st Cir. 2011). Ultimately, it found against Peoples Federal on each of these factors. As to likelihood of success on the merits, the district court first rejected Peoples Federal's argument that its PEOPLES mark was entitled to a presumption of protectability, i.e., inherent distinctiveness,4 based on its six Massachusetts trademark registrations. Peoples Fed. Sav. Bank, 750 F. Supp. 2d at 222. It so held in part because Peoples Federal's registration of the mark was filed on the same day that suit was brought in this case, and 4 In order for a mark to be eligible for trademark protection, it must qualify as distinctive, Borinquen Biscuit Corp. v. M.V. Trading Corp., 443 F.3d 112, 116 (1st Cir. 2006), meaning that [the mark] is capable of functioning as a source-identifier of goods. Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 12 (1st Cir. 2008). -6- only after People's United had begun its rebranding process in Massachusetts. The court also considered as relevant the fact that another Massachusetts bank by the name of PeoplesBank had operated as a local bank in Massachusetts since 1885, and had registered a mark that included the dominant word Peoples prior to Peoples Federal.5 The district court determined that this registration substantially outdates Peoples Federal's recent, litigation-driven registrations. Id. The court nevertheless considered whether, independent of its Massachusetts registrations, the PEOPLES mark was inherently distinctive. It concluded that the PEOPLES mark is properly classified as descriptive rather than suggestive because it did not require a stretch of the imagination to associate the term People with banking services.6 Id. at 223. In reaching this 5 On this point, the district court referenced an ongoing trademark dispute between PeoplesBank and the same defendantappellee in this case, People's United. People's United Bank v. PeoplesBank, No. 08-cv-01858 (Dist. Conn. filed Dec. 8, 2008). PeoplesBank seeks to enjoin People's United from using its name in certain parts of Western Massachusetts. The district court denied preliminary injunctive relief in that case after a six-day evidentiary hearing, finding that PeoplesBank had failed to demonstrate a likelihood of consumer confusion. See 2010 WL 2521069 (D. Conn. June 17, 2010), aff'd, 401 Fed. App'x 607 (2nd Cir. 2010). 6 In assessing a mark's distinctiveness, proposed marks are categorized along a spectrum as (1) generic (least distinctive), (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful (most distinctive). Boston Duck Tours, LP, 531 F.3d at 12. Marks classified as suggestive, arbitrary or fanciful are considered inherently distinctive, whereas descriptive marks are tentatively considered non-distinctive and can only attain distinctive status -7- conclusion, which the district court characterized as a close call, it distinguished another district court opinion, Commerce Bank & Trust Co. v. TD Banknorth, Inc., 554 F. Supp. 2d 77 (D. Mass. 2008), in which the word Commerce was found to be suggestive in the banking context. The Commerce Bank & Trust Co. court had found that, unlike Commerce, words such as Community, National, and Mutual are descriptive of a specific characteristic of a banking institution. Id. at 84. Similarly, the district court in this case concluded that the term 'Peoples' is a straightforward way to describe a bank as 'people-oriented.' Peoples Fed. Sav. Bank, 750 F. Supp. 2d at 223. The district court also concluded that the frequent use of the term People in connection with banking services cuts in favor of defining the mark as descriptive. See id. (noting that people ranks as the twelfth most commonly used word in bank names on the FDIC's website, appearing in the names of 159 banks in the United States). Having found the mark to be descriptive, the district court then determined whether the same had acquired secondary meaning sufficient to entitle it to protection. The court looked at the bank's advertising budget, the nature and extent of its promotion efforts, and evidence of the bank's growth, per this upon an affirmative showing of secondary meaning. Borinquen Biscuit Corp., 443 F.3d at 116; Equine Techs., Inc. v. Equitech., Inc., 68 F.3d 542, 544 (1st Cir. 1995) (merely descriptive terms generally are not entitled to protection because they are a poor means of distinguishing one source of services from another). -8- Court's guidance in Boston Beer Company Limited Partnership v. Slesar Brothers Brewing Company, 9 F.3d 175 (1st Cir. 1993), in which we listed factors to be taken into account when assessing a showing of secondary meaning. See Peoples Fed. Sav. Bank, 750 F. Supp. 2d at 223-24 (citing Boston Beer Co., 9 F.3d at 181-82). The district court found that, although Peoples Federal had demonstrated that its mark had acquired secondary meaning within the neighborhoods where it has branches, it had not done so beyond those areas. Specifically, although it had developed plans to open branches in Suffolk, Middlesex, and Norfolk counties, Peoples Federal had not shown that a substantial portion of the consuming public in those areas recognized the PEOPLES mark. Its advertising efforts and community involvement, though significant, were found to be highly localized within the Boston city limits and nearby urban areas. Therefore, the district court concluded that Peoples Federal's mark was enforceable, but only within Allston/Brighton, Brookline, Jamaica Plain, Norwood and West Roxbury . . . [and] not throughout all of Eastern Massachusetts, or even the rest of Middlesex, Suffolk and Norfolk counties. Id. at 224. The district court then evaluated whether People's United's alleged infringing use was likely to result in consumer confusion. In finding against Peoples Federal on this point, the court carefully weighed the eight likelihood-of-confusion factors established in Pignons S.A. de Mecanique de Precision v. Polaroid -9- Corp. (Pignons), 657 F.2d 482, 487 (1st Cir. 1981) (the Pignons factors or Pignons analysis).7 The court determined that, although the banks' marks contain the same dominant word, important differences between the marks, including additional essential words (such as Federal and United) and visual differences in their logos undoubtedly help customers distinguish between the two banks, thus decreasing the chance of confusion. Peoples Fed. Sav. Bank, 750 F. Supp. 2d at 225. Although the district court considered the similarity of the services and found that this factor weighed in favor of Peoples Federal, it also weighed the parties' differing views on whether the two banks market to the same kinds of retail and commercial consumers. It noted that while Peoples Federal emphasizes its identity as a small neighborhood bank, People's United is a large, regional bank with numerous branches throughout New England. As to the similarity of their advertising, channels of trade and prospective customers, the court also determined that because banking customers ordinarily gather information before choosing a bank and make their decision based on substantive factors (other 7 In Pignons, we stated that when determining whether a putative infringer's use of a mark is likely to cause consumer confusion, a court should examine the following factors: the similarity of the marks; the similarity of the goods; the relationship between the parties' channels of trade; the relationship between the parties' advertising; the classes of prospective purchasers; evidence of actual confusion; the defendant's intent in adopting its mark; and the strength of the plaintiff's mark. 657 F.2d at 487. -10- than a bank's name), the likelihood of confusion on those grounds was minimal, particularly because the banks [in this case] do not operate branches in the same neighborhoods. Id. at 226. Therefore, the balance of these three factors tipped slightly in favor of People's United. The district court then considered two instances of alleged confusion cited by Peoples Federal in support of its motion, both of which stemmed from a Boston Globe article that discussed a merger between People's United and River Bank, an entity that operates branches in Essex County. Evidence was presented that Thomas Leecht (Leecht), President and CEO of Peoples Federal, was asked on two separate occasions whether Peoples Federal (as opposed to People's United) was acquiring River Bank.8 The district court stated that neither of the reported incidents involved confusion among current or prospective customers, which indicated a paucity of evidence of actual consumer confusion. Id.9 Nonetheless, it found that because 8 Leecht stated in an affidavit that several days after the Boston Globe article appeared, a fellow rotary club member asked him whether Peoples Federal was purchasing River Bank. Leecht also reported that, during a sales pitch, a billboard vendor indicated that he had thought Peoples Federal was acquiring River Bank, but that he may have been confusing Peoples Federal with another bank. Peoples Fed. Sav. Bank, 750 F. Supp. 2d at 226. 9 In doing so, the district court distinguished the present case from the facts in Commerce Bank & Trust Co., 554 F. Supp. 2d at 86, where after a merger announcement in the Boston Globe involving the defendant in that case, the plaintiff received numerous calls and emails from current customers asking if they could begin depositing -11- People's United entered Eastern Massachusetts only a few months prior, the lack of proof of actual confusion was less salient, and concluded that the scarcity of such evidence was not in itself dispositive of Peoples Federal's claim. It next determined that Peoples Federal presented no compelling evidence that People's United acted in bad faith by adopting the mark People's United Bank, and that -- to the contrary -- it had used the word People's in its name for decades, asserting that its decision to change its name from 'Peoples Bank' [sic] to 'Peoples United Bank' [sic] aimed to avoid, rather than create, confusion in the market place.10 Id. It further found credible People's United's contention that the rebranding of the acquired Butler branches was consistent with standard practice in FDIC-assisted acquisitions. The court perceived no intent by Peoples [sic] United to get a free ride off the good will of plaintiff's mark or to confuse prospective customers, thus the intent factor weighed in People's United's favor. Id. at 227. Finally, the district court considered the strength of the marks. Per its discussion regarding the lack of inherent their paychecks at the new branches. 10 Throughout its opinion, the district court referred to People's United as Peoples United. Here we have used the phrasing of the bank's name in the possessive form, as reflected in the parties' briefs and the record on appeal. -12- distinctiveness of Peoples Federal's mark, the court noted that the conceptual strength of the PEOPLES mark is belied by the fact that 159 banks elsewhere around the country use that mark and many coexist in the same market areas. Id. Although the PEOPLES mark had developed secondary meaning in the specific neighborhoods in which Peoples Federal operates, the court found the term to be a common one in the banking industry as a whole. Thus, the mark's lack of inherent conceptual strength tilted this factor in favor of People's United. The district court concluded that the balance of the Pignons factors -- particularly the dissimilarity between the parties' logos, consumers' tendency to perform research before selecting a bank, the absence of bad faith, and the scarcity of evidence of actual confusion -- weighed against a finding of likelihood of consumer confusion. The court additionally noted that at least at this stage of the proceedings, [Peoples Federal] has not adequately demonstrated that it is likely to succeed on the merits of its trademark claim. If, however, evidence is elicited that 1) [People's United] is deliberately encroaching into the specific neighborhoods in which [Peoples Federal] operates and/or promotes itself as Peoples (rather than People's United) in an effort to divert [Peoples Federal's] customer base and 2) [People's United's] actions have caused actual confusion among [Peoples Federal's] clientele, the [c]ourt would entertain a renewed motion for injunctive relief. Id. -13- The district court concluded its analysis by considering the other three preliminary injunction factors. It found that, because Peoples Federal had failed to make a showing of likelihood of consumer confusion, it was not at risk of continuing irreparable harm. Its finding that whatever harm incurred thus far was neither imminent nor irreparable was buttressed by the fact that People's United had been using its name to operate former Butler branches for more than three months with scant evidence of consumer confusion or Peoples Federal's awareness until June of 2010. The court concluded that, because Peoples Federal had failed to show both likelihood of confusion and irreparable harm, the balance of the equities and the analysis of the public interest weighed against providing injunctive relief. This interlocutory appeal ensued.