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Patsy's Brand, Inc. v. I.O.B. Realty, Inc. - 317 F.3d 209 (2d Cir. 2003)

Rule:

Where the senior user has tolerated for decades the junior user's competition in the same market with a name similar to that of the senior user, the justification for preserving for the senior user use of a dominant component of its name in a related field vanishes entirely. In such circumstances, protection for use of the common feature of the two names in the related field belongs to the first entrant into that field. When a senior user delays in enforcing its rights, a junior user may acquire a valid trademark in a related field, enforceable against even the senior user. 

Facts:

The case involved a dispute between two New York City restaurants, Patsy's Italian Restaurant and Patsy's Pizzeria, that for decades had operated under similar names and had recently begun selling jars of pasta sauce with similar labels. The district court's injunction not only prohibited use of the Patsy's Pizzeria's sauce label, but also cancelled the company's trademark for "Patsy's" for restaurant services and enjoined Patsy's Pizzeria from listing or identifying their restaurant business as "Patsy's" or "Patsy's Restaurant" in any telephone directory, sign, or advertisement. 

Issue:

Was Patsy's Pizzeria entitled to include in their labeling of pasta sauce and other packaged food products that they produced a modestly sized identification that the product came from the establishment that operated "Patsy's Pizzeria?

Answer:

Yes

Conclusion:

The court of appeals found that in view of the long-standing use of the name "Patsy's Pizzeria" to identify their restaurant, Patsy's Pizzeria was entitled to include in their labeling of pasta sauce and other packaged food products that they produced a modestly sized identification that the product came from the establishment that operated "Patsy's Pizzeria." Further, the court determined that the provision requiring cancellation of Patsy's Pizzeria's registration of "Patsy's" for restaurant services, exceeded the scope of the instant litigation and should be deleted.

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