People’s United Bank Wins Trademark Litigation Victory

Cleary Gottlieb won a decisive victory for People’s United Bank in a trademark infringement litigation, defeating an attempt by Peoples Federal Savings Bank to prevent People’s United from using its name in eastern Massachusetts. In mid-April, People’s United acquired branches in the greater Boston area townships of Lowell, Andover and Marlborough, when the Federal Deposit Insurance Corporation selected People’s United to assume the deposits and banking operations of the failed Butler Bank. As is customary in such failed bank rescues, People’s United immediately rebranded these branches with its own distinctive name and logo, reassuring customers that they can rely on People’s United’s strength and stability. Peoples Federal Savings Bank, which also operates branches in Greater Boston, then filed a lawsuit in federal district court and moved for a preliminary injunction to block People’s United from using its name on the newly acquired branches and on any future branches in eastern Massachusetts, claiming that such use would infringe Peoples Federal’s trademark rights in its name and cause consumer confusion.

On August 9, 2010, U.S. District Judge Nathaniel Gorton of the U.S. District Court in Boston denied Peoples Federal’s motion, ruling that it had not met any of the requirements for injunctive relief. Most importantly, Judge Gorton concluded that Peoples Federal had failed to demonstrate a likelihood of success on its claim that People’s United’s use of its name would cause consumer confusion. Judge Gorton noted that while both banks have “People” in their names, the use of “United” in People’s United’s name and the parties’ different logos and color schemes differentiate the overall effect created by the parties’ respective marks and reduce any likelihood of confusion. Judge Gorton further found that the Peoples Federal’s mark is not strong, based on evidence People’s United presented demonstrating that four other banks had used “People” in their names in eastern Massachusetts and that 159 banks across the country currently have “People” as part of their names. People’s United’s expert witnesses also provided crucial support to Judge Gorton’s analysis, leading him to conclude first that consumers in the market for banking services employ care and typically perform research when choosing where to bank, and therefore are less likely to be confused by similar bank names, and second that People’s United’s actions in rebranding the newly acquired branches of the failed Butler Bank is consistent with common practice in an FDIC-assisted transaction and serves the goals of the FDIC.

This is the second important victory Cleary Gottlieb has helped People’s United achieve in trademark litigation in recent months, having defeated in May an attempt by a bank named “PeoplesBank” to block People’s United from using its name in operating branches it had previously acquired in western Massachusetts.