2:07-Cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 1 of 26 Pg ID 6980

2:07-cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 1 of 26 Pg ID 6980 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION CITIZENS BANKING CORP., Plaintiff, Case Number: 07-11514 v. Hon. Arthur J. Tarnow Magistrate Judge: Donald A. Scheer CITIZENS FINANCIAL GROUP, INC., et al., Defendants, / OPINION AND ORDER FOLLOWING BENCH TRIAL This trademark infringement suit was heard at a six-day bench trial, commencing on February 5, 2008. For the reasons explained below, Plaintiff’s request for injunctive and other relief is DENIED. The Court’s findings of fact and conclusions of law follow. I. INTRODUCTION A. Factual Background Plaintiff Citizens Banking Corporation (“CBC”) has used a “Citizens”-related mark in Michigan since it was established in Flint in 1871. It currently operates approximately 160 branches in 42 counties in Michigan. CBC is the largest bank headquartered in Michigan, and is the seventh largest bank operating in the state. It has used the name “Citizens Bank” since 1995. Plaintiff has grown significantly in just the last few years. It expanded its Oakland County business in late November 2003. It purchased Republic Bank in 2:07-cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 2 of 26 Pg ID 6981 December 2006, which increased its coverage area in Michigan, as well as other states. For instance, until that acquisition, Plaintiff had no branches in Washtenaw, Monroe, and Livingston counties. Plaintiff re-branded all Republic Banks in Michigan with its “Citizens Bank” mark. In addition to its operations in Michigan, Plaintiff extended its reach into Wisconsin, Iowa, and Ohio with the purchase of F&M bank. F&M branches in Wisconsin and Ohio were re-branded to “Citizens Banks,” despite the presence of other “Citizens” named banks in the same areas. The Republic Bank branches in Ohio were also re-branded, which was the subject of Defendant’s counter-claim. Defendant Citizens Financial Group (“CFG”) has also been in operation since 1871, as a “Citizens”-named bank. It currently operates approximately 1600 branches in thirteen states, and is the eighth largest commercial banking company in the United States. Since 1988, CFG has been a wholly owned subsidiary of Defendant Royal Bank of Scotland (“RBS”). In 1976, CFG began to use a stylized “C” as its logo, which is also known as the “Pacman” logo. In 2005, CFG transitioned from the Pacman to its current logo, known both as the “snowflake” or the “daisy wheel.” The daisy wheel was adopted from the logo of the parent company, RBS. In 2000, CFG was operating in only four states in New England. Since at least the mid-1990s, CFG had been acquiring banks. With each acquisition, CFG changed the purchased bank’s name to “Citizens Bank,” accompanied by the current logo in use. In 2000, CFG purchased Mellon Bank, which expanded its footprint to three 2 2:07-cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 3 of 26 Pg ID 6982 more states. In 2004, it acquired Charter One, which had branches in Michigan, Ohio, and four other states. CFG’s intent is to rebrand its entire “footprint” (its banks in all thirteen states) to the name “RBS Citizens,” an effort projected to cost $350 million. Plaintiff currently uses the following marks: D e f e ndant seeks to re-brand its Charter One branches (actually, its whole “footprint”) with the following marks: B. Procedural History Plaintiff filed this action in April 2007, on becoming aware of Defendants’ rebranding plan for Charter One. The action seeks declaratory judgment and injunctive relief, to prevent Defendants from using a “Citizens” mark in Michigan. Defendants counterclaimed to prevent Plaintiff from using the “Citizens” mark in Ohio, where Plaintiff planned to re-brand branches of Republic Bank. Pursuant to a January 14, 2008, teleconference, this trial was limited to the parties’ use of the marks in Michigan. For trial, the issues were limited further to only nine counties in Michigan in which the parties would be the only “Citizens” named banks. Those counties are Ingham, Jackson, Livingston, Monroe, Oakland, Saginaw, 3 2:07-cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 4 of 26 Pg ID 6983 Shiawassee, Washtenaw, and Wayne. A bench trial was held from February 5 to 12, 2008 before this Court. Summary judgment motions remain outstanding on Defendants’ counterclaim as to Plaintiff’s use of the mark in Ohio. II. ANALYSIS For Plaintiff to prevail in a trademark infringement action, it must demonstrate (1) ownership of a specific service mark in connection with specific services; (2) continuous use of the service mark; (3) establishment of secondary meaning if the mark is descriptive; and (4) a likelihood of confusion amongst consumers due to the contemporaneous use of the parties’ service marks in connection with the parties' respective services. Homeowners Group, Inc. v. Home Marketing Specialists, Inc., 931 F.2d 1100, 1105 (6th Cir. 1991). As explained further below, the Court need make no finding as to ownership or use, because the Plaintiff has demonstrated neither secondary meaning nor, most importantly, a likelihood of confusion. A. Plaintiff’s mark is descriptive “[W]hether Plaintiff's mark qualifies for trademark protection is determined by where the mark falls along the established spectrum of distinctiveness.” DeGidio v. West Group Corp., 355 F.3d 506, 510 (6th Cir. 2004) (citation omitted). In order of increasing protection afforded, that spectrum covers “(1) generic terms; (2) descriptive; (3) suggestive; (4) arbitrary or fanciful.” Id. Suggestive or arbitrary terms are considered inherently distinctive. Id. “A suggestive term suggests rather than describes an ingredient or characteristic of the goods and requires the observer or listener to use imagination and perception 4 2:07-cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 5 of 26 Pg ID 6984 to determine the nature of the goods.” Id. (quoting Induct-O-Matic v. Inductotherm Corp., 747 F.2d 358, 362 (6th Cir. 1984)). A descriptive term by contrast describes one or more of the following: “the intended purpose, function or use of the goods . the class of users of the goods; a desirable characteristic of the goods; or the end effect upon the user.” Id. (quoting Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1190 (6th Cir.1988)). Plaintiff cites the United States Patent and Trademark Office’s approval of trademark applications with the term “Citizens” as evidence that the mark is distinctive. Indeed, the PTO requires an applicant to demonstrate that its mark is distinctive before it will approve a registration. Courts frequently have accorded weight to these kinds of PTO determinations in evaluating whether a mark is descriptive or inherently distinctive. Borinquen Biscuit Corp. v. M.V. Trading Corp., 443 F.3d 112, 119 (1st Cir. 2006) (citing Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 934 (4th Cir.1995)). However, the resulting presumption “is not conclusive.” Champions Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1118 (6th Cir. 1996). In Champions, the court observed that despite PTO registration without demonstration of secondary meaning, “other courts have treated a mark of ‘CHAMPION’ as weak, and ‘entitled to but a very limited scope of protection.’” Id. (citations omitted). In addition, “[f]requent use of a term by sellers of similar products or services tends to indicate that the term is descriptive or generic rather than suggestive.” Dranoff-Perlstein Assocs. v. Sklar, 967 F.2d 852, 858 (3d Cir. 1992) (citing Security Ctr., Ltd. v. First Nat'l Security Ctrs., 750 F.2d 1295, 1299 (5th Cir.1985)). Here, 5 2:07-cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 6 of 26 Pg ID 6985 Plaintiff’s use of the term “Citizens” must be considered in context with the hundreds of national banks and financial service providers. Similarly, in part because of the widespread nature of the term’s use, the term “Citizens” has been found in this District to be only descriptive, in a prior suit brought by Plaintiff. See Citizens Banking Corp.,et al., v. CNB Bancshares, Inc., No. 98- 74195, slip op. at 5 (E.D.Mich. Dec. 23, 1998) (Duggan, J.). Cf. Citizens Financial Group, Inc. v. Citizens Nat. Bank of Evans City, 383 F.3d 110, 123 (3d Cir. 2004) (permitting a jury determination of distinctiveness to stand, but finding that “as a general rule, widespread use of even a distinctive mark may weaken the mark.”) Because of that frequent use of the term, and agreeing with the reasoning in Citizens Banking Corp. v. CNB, the Court finds Plaintiff’s use of the term “Citizens” to be descriptive. B. Plaintiff has not demonstrated secondary meaning If a term is found to be descriptive, secondary meaning must be proven for the term to be protectable. Tumblebus Inc. v. Cranmer, 399 F.3d 754, 761 (6th Cir. 2005). “To establish secondary meaning, a manufacturer must show that, in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself.” Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 851 n.11, 102 S.Ct. 2182, 2187 (1982). The Sixth Circuit characterizes the evidentiary burden to prove secondary meaning as “substantial.” Burke-Parsons-Bowlby Corp. v. Appalachian Log Homes, Inc., 871 F.2d 590, 596 (6th Cir. 1989) (citing Bank of Texas v. Commerce Southwest, Inc., 741 F.2d 785, 787 (5th Cir.1984)). 6 2:07-cv-11514-AJT-DAS Doc # 165 Filed 05/06/08 Pg 7 of 26 Pg ID 6986 Secondary meaning may be demonstrated a number of ways.

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