Court Won’t Block Banks From Using Peoples Name

(CN) - A small, neighborhood bank in Massachusetts cannot stop a larger, regional bank from using the word "People's" to rename newly acquired branches, the 1st Circuit ruled.

The dispute arose when People's United, a 170-year-old institution headquartered in Connecticut, bought out the failed Butler Bank and its subsidiary, Marlborough Cooperative, in April 2010.

People's sought to rebrand the new acquisitions with its name, but the maneuver drew criticism from Peoples Federal Savings Bank, which has operated several branches exclusively in eastern Massachusetts since 1937.

Two months after the Butler Bank buyout, People's Federal registered six trademarks, three of which contain the word "Peoples." It filed a trademark infringement lawsuit and alleged costumer confusion one day after registering the marks.

U.S. District Judge Nathaniel Gorton refused to grant a preliminary injunction, and the Boston-based federal appeals court affirmed on Feb. 10

In support of the decision, the three-judge panel cited several factors, including differences in the bank logos, the neighborhoods where they operate and the type of clientele they service, There are also other banks in Massachusetts with some variation of the word "People" in their name, according to the 34-page decision authored by Judge Juan Torruella.

Peoples Federal has locations in Allston, Brookline, Jamaica Plain, Norwood and West Roxbury. Butler Bank had branches in northcentral Massachusetts.

By the time People's Federal filed suit, the national competitor had already rebranded the Butler branches under Federal Deposit Insurance Corporation guidelines.

The claim that customers would be confused by the People's United name is a "red herring," Torruella said.

Gorton, the district judge, correctly asserted that "customers were unlikely to be confused because of the level of care they ordinarily would employ before choosing a bank," the 34-page decision states.

The appellate panel also supported Gorton's contention that, "even if the two banks did attract the same clientele, the likelihood of confusion is minimal, particularly because the banks do not operate branches in the same neighborhood."

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