## Facts

- Mobil Oil Corporation long used and registered a “flying horse” Pegasus symbol in connection with its petroleum business, displaying it widely across stations, products, vehicles, and corporate materials.
- Mobil also engaged in bulk oil trading as part of its integrated petroleum operations.
- Pegasus Petroleum Corporation, incorporated in 1981, entered the professional oil-trading market and adopted the name “Pegasus” (with a separate logo) for its trading business.
- Pegasus’s founder selected the “Pegasus” name with awareness of Mobil’s well-known Pegasus symbol and its petroleum association.
- Mobil sued Pegasus in federal court for trademark infringement and unfair competition under the Lanham Act, false designation of origin, and dilution under New York law.
- After a bench trial, the district court entered judgment for Mobil on all claims, dismissed Pegasus’s counterclaims seeking cancellation of Mobil’s registration, and enjoined Pegasus from using “Pegasus” in the petroleum industry or related businesses.
- Pegasus appealed.

## Issues

1. Whether Pegasus’s use of the word mark “Pegasus” for oil-trading services created a likelihood of confusion with Mobil’s famous Pegasus design mark when both referred to the same mythological figure.
2. Whether the professional, sophisticated nature of the oil-trading market negated a likelihood of confusion.
3. Whether Mobil’s limited use of the Pegasus symbol within its oil-trading segment barred relief for use of “Pegasus” by another petroleum-market participant.

## Decision

- The Second Circuit affirmed the judgment for Mobil on Mobil’s federal and state claims.
- The court upheld dismissal of Pegasus’s counterclaims to cancel Mobil’s registration.
- The court sustained the injunction prohibiting Pegasus from using “Pegasus” in connection with the petroleum industry or related businesses.

## Legal Principles

- Likelihood of confusion governs trademark infringement; direct competition or identical trade channels are not required.
- A famous, strong mark receives broad protection, including against uses that create an affiliation or sponsorship impression in a related market.
- Conceptual similarity may be found where a word mark and a design mark convey the same commercial impression (here, “Pegasus” and a winged-horse symbol) in the same industry context.
- Buyer sophistication does not preclude confusion, including initial confusion or mistaken assumptions of connection, when a strong mark is invoked in the relevant commercial setting.
- Knowledge of the plaintiff’s famous mark when adopting the challenged mark may support an inference of intent to trade on the plaintiff’s goodwill, reinforcing likelihood of confusion.
- Proof of actual confusion and survey evidence may corroborate likelihood of confusion but are not necessarily dispositive.

## Conclusion

The Second Circuit held that Pegasus Petroleum’s use of “Pegasus” for oil-trading services was likely to cause confusion with Mobil’s famous Pegasus mark in the petroleum field and affirmed a broad injunction barring Pegasus’s use of the name in the petroleum industry and related businesses.


Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254 (2d Cir. 1987)