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

By Judith L. Grubner

What happens when a large newcomer to a geographic region with a federal registration for its service mark encounters a smaller pre-existing business in that region with prior use of a similar mark for the same services? Enjoinable reverse infringement results, according to the U.S. Court of Appeals for the Third Circuit. Citizens Financial Group, Inc. v. Citizens National Bank of Evans City, Case Nos. 03-2868 and 03-3175 (3d Cir. 2004).

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.

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