Newcomer's Trademark Rights Take Back Seat in Limited Area to Local Prior User

When Citizens Financial Group, Inc. (CFG), a subsidiary holding company of the Royal Bank of Scotland, bought the retail banking operations of Mellon Bank in July 2001, it converted all of the Mellon branches in Pennsylvania to “Citizens Bank” branches. However, a number of those branches were located near (some on the same streets as) branches of Citizens National Bank of Evans City (CNBEC), founded in 1878 and doing business through 16 branches in northwestern Pennsylvania. Federally chartered in 1907, CNBEC has branches in Butler, north Allegheny and Armstrong counties. It refers to itself as “Citizens” in advertising and promotional materials and in customer communications. In addition to the former Mellon branches in Pennsylvania, CFG has hundreds of branches throughout the east coast of the United States. It advertises itself as “one of the largest banks in the world.” It also has a federal registration for the service mark CITIZENS BANK, issued Aug. 28, 2001. CNBEC has not registered the service marks CITIZENS or CITIZENS NATIONAL BANK.

CNBEC promptly sent CFG a cease and desist letter requesting that CFG not use “Citizens” as the name for its western Pennsylvania branches. CFG responded by filing suit for a declaratory judgment that it could not be prevented from using “Citizens.” CNBEC counterclaimed for trademark infringement and unfair competition. The U.S. District Court for the Western District of Pennsylvania denied CNBEC's motion for a preliminary injunction and a jury trial was held. CNBEC claimed that CFG's “Citizens Bank” mark infringed both “Citizens” and “Citizens National Bank” and that CFG committed unfair competition and was unjustly enriched. The evidence included testimony about actual confusion by customers, including mistaken attempts at check cashing, loan payments, money deposits, ATM use and others.