CNB Financial v. CNB Community Bank

Citation: CNB Financial Corp. v. CNB Community Bank (IO), 2004 U.S. Dist. LEXIS 21483 (E.D. Pa. Sept. 30, 2004).

Factual Background
Plaintiff owned County National Bank, a full-service bank serving individuals and small businesses in seven counties in north central Pennsylvania. Beginning in 1960, plaintiff used the federally registered marks CNB and CNB COUNTY NATIONAL BANK to identify its bank and banking services. In fact, plaintiff was known simply as “CNB.” Plaintiff operated a website at “bankcnb.com,” at which it provided information and e-banking services. Defendant opened a new bank called “CNB Community Bank” with two branches in an adjoining county. Defendant knew about plaintiff before opening its bank, but did not investigate whether CNB was federally registered before selecting its bank name or domain name “cnbcb.com.” Defendant claimed that it derived the “CNB” name from the initial letters of the two towns where its branches were located—Clarion and New Bethlehem.

Trial Court Proceedings
Plaintiff filed suit for infringement and sought a preliminary injunction. Defendant first argued that the Lanham Act was inapplicable because neither party used their respective marks in interstate commerce. The court rejected this argument, however, noting that both parties had out-of-state customers, conducted radio and print advertising that reached beyond the state’s borders, and operated websites.

Regarding the merits of plaintiff’s claim of infringement, the court rejected defendant’s argument that plaintiff’s CNB mark was generic because each of its corresponding terms (“county,” “national,” and “bank”) were generic. The court noted that the generic nature of the full wording did not automatically make the acronym generic. Rather, the key issue was whether the CNB mark functioned as a source indicator, which it did here based on the court’s finding that the mark had acquired secondary meaning.

The court next found that plaintiff established a likelihood of confusion based primarily on the similarity of the marks and services, the strength of plaintiff’s mark in its market area, and evidence of actual confusion. Moreover, although plaintiff had no branches in the adjoining county where defendant was located, it was undisputed that banks in central Pennsylvania drew customers from neighboring communities where they did not have branch offices. In addition, defendant had customers in plaintiff’s counties and some of its advertising reached plaintiff’s market area.

Regarding irreparable harm, despite the lack of direct evidence of bad faith by defendant, the court noted its lack of due diligence by failing to search its name and its failure to act after receiving plaintiff’s cease-and-desist letters. The court thus preliminarily enjoined defendant from using “CNB” as a mark or name or as part of any mark, name, or domain name in conjunction with any banking or financial services.

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