MEMORANDUM & ORDER
GORTON, District Judge.
This case arises from a trademark dispute between plaintiff Peoples Federal Savings Bank (“Peoples Federal”) and defendant Peoples United Bank (“Peoples United”). Peoples Federal objects to the rebranding by Peoples United of several recently-acquired banks in Eastern Massachusetts with the latter’s mark. Before the Court is plaintiffs motion for a preliminary injunction.
I.
Factual Background
The following facts are as alleged in the complaint, plaintiffs motion in support of preliminary injunction, defendant’s opposition that to motion and plaintiffs reply thereto (each with various accompanying exhibits).
Peoples Federal is a community bank that operates exclusively in Eastern Massachusetts. It was chartered in 1888 and became a federally insured savings and loan institution in 1937. Its headquarters
are in Brighton but it has grown steadily over the years and now operates branches in Allston, Brookline, Jamaica Plain, Nor-wood and West Roxbury. It has a loan portfolio of approximately $375 million and assets of over $500 million.
Peoples Federal began using the term “Peoples” in its name and service marks in 1937 and is the only continuous user of the PEOPLES mark for banking services in Eastern Massachusetts since that time. It owns six Massachusetts registrations for its marks, including PEOPLES, PEOPLES FEDERAL and PEOPLES FEDERAL SAVINGS BANK, but those registrations were not granted until June 15, 2010, the day plaintiff filed the instant suit. It promotes those marks through considerable advertising and marketing efforts, involvement in community activities and charitable giving. Through its dedication to personal service, high profile and community involvement, it has attracted the media and been portrayed favorably in the press.
Defendant Peoples United Bank was founded in 1842 in Bridgeport, Connecticut. It has used the word “People” in its name for approximately 80 years. Until 2007, it was called “Peoples Bank” but because it planned to expand beyond Connecticut, it changed its name to “Peoples United Bank” to distinguish itself from other banks that also used the word “People” in their titles. Peoples United asserts that it is the only bank in the country that uses that particular name.
On April 16, 2010, Peoples United acquired from the Federal Deposit Insurance Corporation (“FDIC”) the deposits and banking operations of the failed Butler Bank, which had branches in north central Massachusetts, and Butler Bank’s subsidiary, Marlborough Cooperative, which had branches in Marlborough (collectively, “Butler”). On the following day, Peoples United began rebranding all former Butler branches and re-opened them under its own name, Peoples United Bank. Specifically, it covered the exterior signage at the branches of the acquired banks and replaced them with signs bearing the name “Peoples United Bank”. It also replaced the failed banks’ interior posters and brochures with the Peoples United name and logo. Butler’s failure, the first of a Massachusetts bank in 16 years, was covered prominently in the press, as was Peoples United’s acquisition of its operations and rebranding of its branches.
II.
Procedural History
On June 15, 2010, Peoples Federal filed suit against Peoples United alleging trademark infringement, trademark dilution and unfair competition in violation of the Lanham Act, 15 U.S.C. § 1125(a), as well as violations of Massachusetts statutory and common law. Then, one month later, Peoples Federal moved for a preliminary injunction and temporary restraining order to stop Peoples’ United from rebranding the Butler branches, and any other bank branches it might acquire in Eastern Massachusetts, with People United’s name, logo or other Peoples-formative marks.
Because plaintiff asserted that the rebranding was to occur on July 19, 2 010, the Court convened an emergency hearing on Friday, July 16, 2010. Counsel for both parties attended the hearing, although, at that time, defendant had not yet responded to plaintiffs motion. At the hearing, defendant’s counsel informed the Court that Peoples United had already rebranded the former Butler branches and that it would not take any further action in the immediate future. He also explained that the July 19, 2010, date was based on a misunderstanding and that Peoples United had no plans to execute any further rebranding on that date. Satisfied that the
status quo would be maintained, the Court scheduled a status conference and motion hearing for Thursday, July 29, 2010.
At the July 29, 2010, hearing, the Court announced its preliminary findings and invited argument from the parties. Since that hearing, plaintiff has submitted a notice bringing to the Court’s attention a recent case involving a trademark dispute between two banks in Pennsylvania,
Alliance Bank v. New Century Bank,
742 F.Supp.2d 532, 2010 WL 2991204, 2010 U.S. Dist. LEXIS 76747 (E.D.Pa. July 27, 2010), which the defendant has persuasively argued is distinguishable from this case. Having thoroughly considered the parties’ written submissions and oral arguments, the Court now announces its ruling.
III.
Legal Analysis
A. Standard of Review
To obtain preliminary injunctive relief under Fed.R.Civ.P. 65, a movant must demonstrate
(1) a substantial likelihood of success on the merits, (2) a significant risk of irreparable harm if the injunction is withheld, (3) a favorable balance of hardships and (4) a fit (or lack of friction) between the injunction and the public interest.
Nieves-Marquez v. Puerto Rico,
353 F.3d 108, 120 (1st Cir.2003) (citation omitted). Likelihood of success on the merits is the critical factor in the analysis and, accordingly, a strong likelihood of success may overcome a “somewhat less” showing of another element.
See Weaver v. Henderson,
984 F.2d 11, 12 (1st Cir.1993) (citations omitted);
E.E.O.C. v. Astra USA, Inc.,
94 F.3d 738 (1st Cir.1996).
In trademark cases, the first factor plays an even greater role because resolution of the other three factors will depend, in large part, on whether the plaintiff is likely to succeed in establishing infringement.
Borinquen Biscuit Corp. v. M.V. Trading Corp.,
443 F.3d 112, 115 (1st Cir.2006). This focus on likelihood of success is consistent with the idea that, “as a matter of public policy, trademarks should be protected against infringing uses.”
Id.
B. Application
1. Likelihood of Success on the Merits
To succeed on a claim of trademark infringement, Peoples Federal must demonstrate that 1) it owns a protectable mark and 2) Peoples United’s use of that mark will likely result in consumer confusion. 15 U.S.C. § 1125(a);
Borinquen Biscuit,
443 F.3d at 116.
a. Protectability of the PEOPLES mark
To be eligible for trademark protection, a mark must qualify as distinctive.
Two Pesos, Inc. v. Taco Cabana, Inc.,
505 U.S. 763, 769, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992). In assessing a mark’s distinctiveness, courts employ a taxonomy that classifies marks along a spectrum of categories that includes generic, descriptive, suggestive, arbitrary and fanciful marks.
Id.
at 768, 112 S.Ct. 2753. Generic marks, which fall at the low end of the spectrum, are terms that identify a product but do not distinguish its source, such as “pizza,” “store” or “car.” Such terms, by definition, are never afforded trademark protection. At the other end of the spectrum are suggestive, arbitrary and fanciful marks which, because they identify the particular source of the product, are considered “inherently distinctive” and enjoy automatic trademark protection.
Id.
Falling in the middle are descriptive marks which convey an “immediate idea of the ingredients, qualities or characteristics of the good” but “are not inherently capable of serving as source-identifiers.”
Boston Duck Tours, LP v. Super Duck Tours. LLC,
531 F.3d 1,
13 (1st Cir.2008) (internal citation omitted). Descriptive marks are entitled to protection only if they have acquired distinctiveness or secondary meaning.
Id.
Both registered and unregistered trademarks are eligible for protection against infringing uses.
Borinquen Biscuit,
443 F.3d at 117;
see
15 U.S.C. §§ 1114, 1125. When a party seeks protection for an unregistered mark, it is incumbent on it to demonstrate that the mark is distinctive, either inherently or through acquired secondary meaning.
Boston Beer Co. v. Slesar Bros. Brewing Co.,
9 F.3d 175, 180 (1st Cir.1993). When a trademark is registered, however, the party’s burden is reduced. Because registration of a mark serves as “prima facie evidence” of its validity, the mark enjoys a presumption of inherent distinctiveness.
Equine Techs., Inc. v. Equitechnology, Inc.,
68 F.3d 542, 545 (1st Cir.1995). That presumption, however, may be rebutted by proof that the mark is merely generic or that it is descriptive and lacks secondary meaning.
Calamari Fisheries, Inc. v. The Village Catch,
698 F.Supp. 994, 1007 (D.Mass.1988).
Plaintiff asserts that its PEOPLES mark deserves a presumption of protectabilityby virtue of its six Massachusetts registrations and continuous use of the mark since 1937. It reasons that it is a “senior user” of the mark and may enforce it against Peoples United which has only recently moved into Eastern Massachusetts.
Plaintiffs claim is illusory for several reasons. As defendant points out, a closer examination of plaintiffs Massachusetts service mark applications reveals that the majority of them were not filed until June 15, 2010, the same day plaintiff filed the instant suit and two months after Peoples United had begun the re-branding of the former Butler branches. Moreover, four other banks in Eastern Massachusetts have used marks which include the word “People”. Although those banks were not located in the same neighborhoods as the Peoples Federal branches (which are primarily in Suffolk County), and have since dissolved or changed names, their use of the mark casts doubt on its inherent distinctiveness. Furthermore, another bank of similar name, PeoplesBank, which has operated as a local bank in Western Massachusetts since 1885, also has a Massachusetts registration for a mark which includes the word “Peoples” and substantially outdates Peoples Federal’s recent, litigation-driven registrations.
Although evidence of a state registration generally presumes a registrant’s “exclusive right to use the registered mark” in the Commonwealth, M.G.L. c. 110H § 5(b), the force of that presumption is blunted in this case where 1) the registration was not filed until the same day the plaintiff filed suit against Peoples United and
after
Peoples United had begun its rebranding process in Massachusetts and 2) another Massachusetts bank had already registered a mark that includes the dominant word “Peoples”. Such facts belie plaintiffs claim that it may presumptively enforce the PEOPLES mark against Peoples United throughout Eastern Massachusetts.
Thus, because the PEOPLES mark is not entitled to a presumption of inherent distinctiveness, the Court must place it on the continuum of categories described earlier. Plaintiff contends that, even independent of its Massachusetts registrations, the PEOPLES mark is inherently distinctive because the word “Peoples” is unrelated to banking services and requires “imagination, thought and perception to reach a conclusion as to the nature of the [services].”
Equine Techs.,
68 F.3d at 544. In support of that argument, plaintiff relies heavily on
Commerce Bank & Trust Co. v. TD Banknorth, Inc.,
in which Judge Dennis Saylor of this Court found that the mark “COMMERCE BANK” was suggestive because it “is intended to create an image of a bank that promotes commerce.” 554 F.Supp.2d 77, 84 (D.Mass.2008).
Although perhaps a close call, the PEOPLES mark is properly-classified as descriptive rather than suggestive because it does not require a stretch of imagination to associate it with banking services. In
Commerce Bank,
Judge Saylor opined that, unlike “Commerce,” words such as “Community”, “National” and “Mutual” are “descriptive of a specific characteristic” of a banking institution.
Id.
Similarly, the term “Peoples” is a straightforward way to describe a bank as “people-oriented”. In fact, the FDIC’s website indicates that “people” ranks as the 12th most commonly used word in bank names, appearing in the names of 159 banks across the country.
See
http://www2.fdic.gov/idasp/. Such frequent use of the term “People” in connection with banking services supports a finding that the mark is descriptive.
See Labrador Software, Inc. v. Lycos, Inc.,
32 F.Supp.2d 31, 33 (D.Mass.1999) (in categorizing a mark, “it is proper to take notice of the extent to which it has been used .. by others in the same field”). Not surprisingly, in the lawsuit in Connecticut involving Peoples United and PeoplesBank (discussed
supra,
note 1), Judge Dorsey reached the same conclusion.
People’s United Bank v. Peoplesbank,
2010 WL 2521069, at *4 (D.Conn. June 17, 2010) (“Defendant’s mark [PEOPLES BANK] falls in the descriptive category”). Thus, on this point, the Court has company with respect to its holding.
Having determined that the PEOPLES mark is descriptive, it is entitled to protection only if it has acquired a secondary meaning. Secondary meaning refers to a term’s “ability to tell the public that ... it denotes a product or service that comes from a particular source.”
DeCosta v. Viacom International, Inc.,
981 F.2d 602, 606 (1st Cir.1992). Generally, a name has acquired secondary meaning when a “significant quantity of the consuming public understand the name as referring to the appropriate party.”
Boston Beer,
9 F.3d at 181 (citing
President & Trustees of Colby College v. Colby College-New Hampshire,
508 F.2d 804, 807 (1st Cir.1975)).
Generally, a demonstration of secondary meaning “entails vigorous evidentiary requirements”.
Boston Beer,
9 F.3d at 181 (internal citation omitted). Courts consider various factors, including 1) the length and manner of the term’s exclusive use, 2) the size and prominence of plaintiffs enterprise, 3) the nature and extent of advertising of the mark 4) evidence of successful product sales and 5) efforts at promoting a conscious connection, in the public’s mind, between the mark and the particular product.
Id.
at 182;
Calamari Fisheries,
698 F.Supp. at 1008. Although the only direct evidence of secondary meaning is consumer surveys and testimony, courts may draw inferences based on circumstantial evidence of the aforementioned factors.
Boston Beer,
9 F.3d at 182.
Here, plaintiff asserts that it spends $325,000 annually to promote its banking
services through,
inter alia,
radio, TV and print advertising, marketing literature, sponsorship of sports teams and other community organizations and distribution of promotional items. It also contends that it maintains a prominent and well-respected profile in the region through its charitable contributions, civic involvement and personalized banking practices.
Plaintiff attributes its commercial success, in part, to the recognition of its marks. It has increased its customer base steadily over the years, expanded from one to six branches and currently has a loan portfolio of over $375 million and assets of over $500 million. It recently conducted a successful Initial Public Offering (“IPO”) and is now publicly traded on NASDAQ by the symbol PE OP.
Although Peoples Federal has grown and plans to open new branches in Suffolk, Middlesex and Norfolk counties, it has not demonstrated that a “substantial portion of the consuming public” in those areas recognizes the PEOPLES mark. Plaintiff’s advertising efforts and community involvement has been significant but highly localized within the Boston City limits and nearby urban area. Moreover, although plaintiff has advertised in the Boston Globe and on radio stations that broadcast to the greater Boston area, its other media outlets are local Boston community newspapers.
Although plaintiff has demonstrated that its mark has acquired secondary meaning within the specific neighborhoods in which it has branches, it has not made the necessary showing beyond those areas. Accordingly, its mark is enforceable within Allston/Brighton, Brookline, Jamaica Plain, Norwood and West Roxbury areas but not throughout all of Eastern Massachusetts or even the rest of Middlesex, Suffolk and Norfolk counties.
b. Likelihood of Confusion
Having determined that plaintiffs mark deserves some degree of protection, the next element in the infringement analysis is likelihood of confusion. In making such an assessment, courts consider eight factors: 1) similarity of the marks, 2) similarity of the services, 3) relationship between the parties’ channels of trade, 4) relationship between the parties’ advertising, 5) classes of prospective purchasers, 6) evidence of actual confusion, 7) defendant’s intent in adopting its mark and 8) strength of the plaintiffs mark.
Pignons S.A. de Mecanique de Precision v. Polaroid Corp.,
657 F.2d 482, 487 (1st Cir.1981). This is a considerable burden and a plaintiff alleging trademark infringement must show not just a “possibility of confusion” but rather a “substantial likelihood of confusion.”
Bear Republic Brewing Co. v. Central City Brewing Co.,
2010 WL 2330411, at *5 (D.Mass. June 7, 2010).
Plaintiff alleges that defendant’s rebranding of its newly-acquired Massachusetts branches will cause both “forward” and “reverse” confusion. Forward confusion, which forms the basis of most Lanham Act claims, occurs where a smaller, junior user diverts a senior user’s customers and “free rides” off the senior user’s existing reputation and good will.
Commerce Bank,
554 F.Supp.2d. at 83. Reverse confusion, on the other hand, occurs when a larger or well-established, junior user enters a new market and threatens to overwhelm a smaller, senior user.
See Attrezzi, LLC v. Maytag Corp.,
436 F.3d 32, 38-39 (1st Cir.2006);
Commerce Bank,
554 F.Supp.2d at 83. In this regard, plaintiff asserts that because defendant is approximately 40 times its size, it can easily out-advertise and out-spend it but whether the case is construed as one of forward or reverse confusion, the consumer confusion analysis is the same.
See
Attrezzi
436 F.3d at 39;
Commerce Bank,
554 F.Supp.2d at 83.
i.Similarity of Marks
When assessing the similarity of two marks, the Court considers the “sight, sound and meaning” of the marks.
Boustany v. Boston Dental Group. Inc.,
42 F.Supp.2d 100, 107 (D.Mass.1999). The determination should be a holistic one, taking into account the “total effect” of each mark, rather than comparing their “individual features”.
Id.; Pignons,
657 F.2d at 487. Here, plaintiff asserts that the “dominant portions” of the parties’ marks are virtually identical and, accordingly, any small differences in the composite marks (i.e., the words “bank,” “federal,” or “united”) or in the logos are inconsequential.
Plaintiff exaggerates the marks’ similarities. Although both banks’ marks include the word “Peoples” (and are often abbreviated as such), there are important differences between the marks. Notably, plaintiffs mark lacks the word “United,” which forms an essential part of the defendant’s mark and is an important identifier of Peoples United Bank.
Moreover, the parties’ respective logos differ considerably. Peoples Federal uses a green color scheme with a yellow horizontal line separating “Peoples” (the dominant part of its slogan) from “Federal Savings Bank”. Peoples United, on the other hand, uses a red and blue color scheme wherein the words “Peoples” and “United” are the same size and font and are encircled by a red orbit icon. Those differences are substantial and undoubtedly help customers distinguish between the two banks, thus decreasing the chance of confusion.
Compare Peoplesbank,
2010 WL 2521069, at * 5 (where visual differences in the banks’ slogans helped customers differentiate among them);
with Commerce Bank,
554 F.Supp.2d at 85 (where banks’ logos were strikingly similar). Thus, although the banks’ marks contain the same dominant word, the visual differences in their logos neutralizes this factor.
ii. Similarity of the Services
The parties offer essentially identical retail and commercial banking services, such as mortgages and savings and checking accounts. Thus, this factor weighs in the plaintiffs favor.
iii. Similarity of Advertising, Channels of Trade and Prospective Customers
Similarities of advertising, channels of trade and prospective customers are generally considered together.
See Pignons,
657 F.2d at 488. Plaintiff contends that both banks market to the same kinds of retail and commercial consumers and, although Peoples United is a much larger bank, its individual branches operate at the community banking level. Moreover, plaintiff insists that Butler, the local bank recently acquired by the Peoples United, was a direct competitor of Peoples Federal. Defendant maintains, however, that the two banks have very different profiles. Whereas Peoples Federal emphasizes its identity as a small, neighborhood bank, Peoples United highlights its strength as a large, regional bank with numerous branches throughout New England.
With respect to the parties’ prospective customers, plaintiff maintains that its typical customers are blue collar workers, families or small business owners. Because its clients are not “sophisticated” banking customers or financial service professionals, plaintiff reasons that they cannot be expected to investigate carefully the identities of the two banks and, accordingly, are more likely to be confused by their marks.
Plaintiffs argument underestimates the level of care and sophistication that customers use when choosing a bank. Open
ing a bank account or choosing a mortgagee is not an “impulse purchase”. To the contrary, customers ordinarily gather information before choosing a bank and make their decision based on substantive factors (other than a bank’s name).
See Peoplesbank,
2010 WL 2521069, at *8. Because prospective bank clients exercise a relatively high degree of care, they are more likely to recognize the difference between the banks.
Id.; see also First Nat’l Bank in Sioux Falls v. First National Bank, S.D.,
153 F.3d 885, 889-90 (8th Cir. 1998) (“[Consumers tend to exercise a relatively high level of care in selecting banking services”);
Commercial Sav. Bank v. Hawkeye Fed. Sav. Bank,
592 N.W.2d 321, 332 (Iowa 1999) (no “ordinary consumer would be misled in banking decisions simply because two banks in the area have similar names”). Thus, even if the two banks attract similar clientele, the likelihood of confusion is minimal, particularly because the banks do not operate branches in the same neighborhoods. Thus, the balance of these three factors tips slightly in the defendant’s favor,
iv. Evidence of Actual Confusion
Evidence of actual confusion is often the “best possible evidence” of future confusion but is not indispensable to the proof of trademark infringement.
Borinquen Biscuit,
443 F.3d at 120. Plaintiff cites several instances of confusion stemming from a Boston Globe article discussing a merger between Peoples United and. RiverBank, which operates branches in Essex County. Several days after the story appeared, a fellow rotary club member asked Peoples Federal’s President and CEO, Thomas Leetch (“Leetch”), if Peoples Federal was purchasing RiverBank. Leetch also reports that he received a phone call from a billboard vendor who, during his sales pitch, stated that he thought he had read that Peoples Federal was acquiring Riverbank but that he may have been “confusing [Peoples Federal] with another ... bank.” Notably, neither of the reported incidents involved confusion among current or prospective customers.
Contra Commerce Bank,
554 F.Supp.2d at 86 (where, following a merger announcement in the Boston Globe involving the defendant-bank, plaintiff received numerous phone calls and emails from customers asking if they could begin depositing their paychecks at the new branches).
The paucity of evidence of actual consumer confusion is understandable given that Peoples United entered Eastern Massachusetts only a few months ago. As other courts have noted, proof of actual confusion is less salient when the relevant products or services have only coexisted in the market for a short period of time.
See id.
(two years of product coexistence is not long enough to expect actual confusion);
TriMark USA, Inc. v. Performance Food Group, LLC,
667 F.Supp.2d 155, 167 (D.Mass.2009) (finding lack of evidence of consumer confusion irrelevant where logos had only coexisted for several months). Therefore, the scarcity of such evidence is not in itself dispositive of plaintiffs claim,
v. Defendant’s Intent in Adopting Mark
Plaintiff has presented no compelling evidence that the defendant acted in bad faith by adopting the mark “Peoples United Bank”. To the contrary, Peoples United has used the word “Peoples” in its name for decades and asserts that its decision to change its name from “Peoples Bank” to “Peoples United Bank” aimed to avoid, rather than create, confusion in the marketplace. With respect to defendants’ rebranding of the acquired Butler branches with the Peoples United logo, that action is consistent with standard practice in FDIC-assisted acquisitions.
See
Isaac Decl.
¶¶ 8-10. Thus, because the Court perceives no intent by Peoples United to get a free ride off the good will of plaintiff’s mark or to confuse prospective customers, this factor weighs in defendant’s favor.
vi. Strength of the Marks
Plaintiff contends that its mark is strong because of its long and continuous use in Eastern Massachusetts as well as its commercial success, community involvement and advertising efforts. As discussed above, however, 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. Although the PEOPLES mark has developed a secondary meaning in the specific neighborhoods in which Peoples Federal operates, the term is a common one in the banking industry as a whole. Accordingly, because the mark lacks inherent conceptual strength, this factor tilts in favor of People’s United.
In sum, 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, weighs against a finding of likelihood of consumer confusion. Thus, at least at this stage of the proceedings, the plaintiff has not adequately demonstrated that it is likely to succeed on the merits of its trademark claim. If, however, evidence is elicited that 1) defendant is deliberately encroaching into the specific neighborhoods in which plaintiff operates and/or promotes itself as “Peoples” (rather than “Peoples United”) in an effort to divert plaintiffs customer base and 2) defendant’s actions have caused actual confusion among plaintiffs clientele, the Court would entertain a renewed motion for injunctive relief.
2.Irreparable Harm
In the context of trademark litigation, irreparable harm is generally presumed if a plaintiff demonstrates a likelihood of consumer confusion.
See Commerce Bank,
554 F.Supp.2d at 87. Given, however, that plaintiff has failed to make such a showing, it is not at risk of continuing and irreparable harm. Additionally, the fact that Peoples United has been using its name to operate the former Butler branches for more than three months with scant evidence of consumer confusion (or even the plaintiffs awareness until recently), suggests that harm is neither imminent nor irreparable.
3.Balance of the Equities
Because plaintiff has not shown either a likelihood of success on the merits or irreparable harm, the balance of the equities naturally favors the defendant.
4.Public Interest
Plaintiff has not demonstrated that the public interest will be furthered by entering an injunction. Although the public interest is served by preventing consumer confusion,
see Calamari Fisheries,
698 F,Supp. at 1015, the likelihood of such confusion has not been adequately demonstrated.
ORDER
In accordance with the foregoing, plaintiffs motion for preliminary injunction (Docket No. 5) is DENIED without prejudice.
So ordered.