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TRUSTCO BANK v. GLENS FALLS NATL. BANK & TRUST CO.

November 3, 1995

TRUSTCO BANK, NATIONAL ASSOCIATION, Plaintiff,
v.
GLENS FALLS NATIONAL BANK AND TRUST COMPANY, N.A., Defendant.



The opinion of the court was delivered by: SCULLIN

 This matter is before the Court on the motion of plaintiff Trustco Bank, National Association ("Trustco") for a preliminary injunction preventing the defendant, Glens Falls National Bank and Trust Company, N.A. ("GFN") from using the mark, "Home Town Bank." The complaint was filed June 7, 1995, alleging causes of action for dilution of service mark pursuant to N.Y. Gen. Bus. Law § 368(d), trademark infringement pursuant to § 43(a) of the Lanham Act (15 U.S.C. § 1125(a)), and unfair competition under New York common law. GFN agreed, without prejudice, to discontinue use of the mark until the Court rendered its decision on the present motion.

 Oral argument was heard on August 10, 1995, in Albany, New York. The Court, having considered all the submissions and arguments made by both parties, denies plaintiff's motion for a preliminary injunction for the reasons set forth below.

 BACKGROUND

 Plaintiff Trustco has provided a full range of banking services to the general public, both individuals and businesses, for over 90 years. Initially, Trustco's banking services were offered and advertised in the "Capital District" *fn1" and a few surrounding areas. Over time, it expanded into more surrounding areas, opening branches in Washington and Warren counties. *fn2"

 According to Trustco, it has used the unregistered mark "Home Town Bank" continuously since 1984 on virtually all of its promotional and banking materials, and has spent approximately $ 14 million promoting Trustco's banking services using the mark. In 1984, Trustco was known as Schenectady Trust, and had no presence in Glens Falls, New York, which is located in Warren County. Nonetheless, it advertised in newspapers and on television stations that reached into Glens Falls and the Warren and Washington County areas, and claims its mark was thus well-established there. Trustco registered its service mark, "TRUSTCO BANK, Your Home Town Bank," with the New York Department of State on July 1, 1994.

 Defendant GFN was founded in Glens Falls, New York, in 1851. Most of its offices are located in Washington and Warren counties, with a few branches in neighboring Essex and Saratoga counties. Both Trustco and GFN offer the same services and use the same media for advertising.

 According to GFN, it first used the phrase "hometown bank" in 1984 in the text of an employee's quote, and has "consistently emphasized the hometown flavor of its banking services, even when not utilizing the phrase." Hoy Aff. P 5. When Trustco first opened a branch office in Warren County *fn3" in early 1995, the GFN branch office located nearby began flying a banner that read, in part, "The Original Hometown Bank," and placed advertisements in newspapers using this phrase.

 On March 15, 1995, Trustco advised GFN of Trustco's service mark registration and requested that GFN cease use of "The Original Hometown Bank." On March 24, 1995, GFN informed Trustco that, in its opinion, GFN's use of that phrase did not infringe upon Trustco's service mark. This action followed.

 The plaintiff's Lanham Act claim provides the basis of the Court's jurisdiction over the subject matter of this action. The purpose of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), is to protect competitors and the public from misleading advertising that could result in unfair competition. Invicta Plastics (USA) Ltd. v. Mego Corp., 523 F. Supp. 619, 623 (S.D.N.Y. 1981). It prohibits false descriptions of products and services and their origins, and was meant to prevent consumer confusion about the relationship between a trademark holder and its competitor. Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 871 (2d Cir. 1986); Wojnarowicz v. American Family Ass'n, 745 F. Supp. 130, 141-42 (S.D.N.Y. 1990). However, the Lanham Act is construed narrowly when unauthorized use of a trademark is for the purpose of communicating a message, rather than for identifying the origin of a product or service. Yankee Pub. Inc. v. News America Pub. Inc., 809 F. Supp. 267, 276 (S.D.N.Y. 1992).

 Preliminary Injunction Standard

 To obtain a preliminary injunction, a party must show (1) irreparable harm; and (2) either (a) a likelihood of success on the merits or (b) a sufficiently serious question going to the merits to make it a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting preliminary relief. Jackson Dairy, Inc. v. H.P. Hood and Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979) (per curiam); Church of Scientology Int'l v. Elmira Mission, 794 F.2d 38, 41 (2d Cir. 1986).

 I. IRREPARABLE HARM

 Plaintiff's Delay

 The defendant argues that the plaintiff's delay in seeking a preliminary injunction obviates its claim of irreparable harm.

 
Preliminary injunctions are generally granted under the theory that there is an urgent need for speedy action to protect the plaintiff's rights. Delay in seeking enforcement of those rights, however, tends to indicate at least a reduced need for such drastic, speedy action. Significant delay in applying for injunctive relief in a trademark case tends to neutralize any presumption that infringement alone will cause irreparable harm pending trial, and such delay alone may justify denial of a preliminary injunction for trademark infringement.

 Citibank, N.A. v. Citytrust, 756 F.2d 273, 276 (1985) (relief denied where plaintiff sought a preliminary injunction ten weeks after learning directly of defendant's plans to open a branch office with a similar name, and more than nine months after it received notice of same through the press).

 If the delay was caused by the plaintiff's ignorance of the defendant's competing service, or the plaintiff's good faith efforts to investigate the alleged infringement, the delay will not negate the presumption of irreparable harm. Tough Traveler, Ltd. v. Outbound Products, 60 F.3d 964, 967-68 (2d Cir. 1995). *fn4" "Furthermore, delay while reasonably attempting to settle the matter out of court does not undercut preliminary injunctive relief." American Direct Marketing v. Azad Int'l, 783 F. Supp. 84 (E.D.N.Y. 1992).

 The complaint in the present action was filed thirteen weeks after the plaintiff allegedly learned of GFN's use of "The Original Hometown Bank," and six months after the defendant's first ad allegedly appeared in the Glens Falls paper. The plaintiff's claim the delay included a wait of two weeks for GFN's response to Trustco's March 15 letter. When it learned that the defendant would not voluntary discontinue using the phrase "The Original Hometown Bank," Trustco began interviewing, assessment, and hiring of special trademark counsel to handle this matter. The action was commenced within twelve days of retaining trademark counsel, including the Memorial Day weekend.

 The Court finds that the plaintiff has not delayed so long as to warrant a finding that it assumed responsibility for any ...


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