## Facts

- Two unrelated New York City restaurants had long operated under “Patsy’s”: Patsy’s Italian Restaurant (Manhattan) and Patsy’s Pizzeria (East Harlem), coexisting for decades in the same market.
- In 1993, the owners of Patsy’s Italian Restaurant formed Patsy’s Brand, Inc. to sell jarred pasta sauce in retail outlets and obtained a federal registration for a stylized “PATSY’S” sauce label.
- I.O.B. Realty, Inc., associated with Patsy’s Pizzeria, sought to use “Patsy’s”/“Patsy’s Pizzeria” branding in connection with sauce and engaged in related trademark registration disputes.
- The dispute proceeded on parallel tracks: federal litigation in the Southern District of New York over sauce branding and overlapping PTO/TTAB opposition and cancellation matters concerning “PATSY’S”-formative marks.
- The district court entered judgment for Patsy’s Brand on Lanham Act claims involving sauce labeling and issued an injunction limiting how defendants could present “Patsy’s Pizzeria” on sauce labels, requiring it to be a minor label element.
- I.O.B. Realty appealed from the judgment and injunction.

## Issues

1. Whether defendants’ use of “Patsy’s”/“Patsy’s Pizzeria” on sauce and related goods was likely to cause consumer confusion with Patsy’s Brand’s registered sauce mark and trade dress.
2. How longstanding, simultaneous use of “Patsy’s” for restaurant services affected exclusivity claims and the treatment of related trademark registrations.
3. What injunctive relief was appropriately tailored to reduce confusion in the retail sauce market while accounting for the parties’ historical coexistence and concurrent PTO/TTAB proceedings.

## Decision

- The Second Circuit largely affirmed the judgment protecting Patsy’s Brand’s sauce mark and the finding of likely confusion in the retail sauce context.
- The court emphasized that the parties (and predecessors) had coexisted for decades using “Patsy’s” for restaurant-related services in the same city, complicating claims to exclusive rights in the restaurant-services context.
- The court upheld, in substance, the district court’s tailored injunction controlling defendants’ sauce labeling, including the requirement that any “Patsy’s Pizzeria” reference appear only as a minor component and not in prominent type.
- The court remanded aspects of the matter to address coordination problems created by overlapping district court relief and PTO/TTAB registration proceedings.

## Legal Principles

- Likelihood of confusion analysis focuses on consumer ability to distinguish sources in the relevant market; long-term coexistence in one market does not bar confusion findings in a distinct product channel.
- Where parties have historically shared a mark for related services, courts may deny or limit claims of exclusivity and instead craft remedies targeted to specific confusion risks.
- Injunctions in trademark cases should be narrowly tailored to the proven harm; detailed packaging and labeling restrictions can be appropriate where complete prohibition is impractical.
- When federal litigation intersects with PTO/TTAB proceedings, courts must ensure that registration-related relief is consistent with their liability and confusion findings and is procedurally coordinated.

## Conclusion

The Second Circuit sustained core Lanham Act protections for Patsy’s Brand’s jarred sauce branding and approved a detailed, confusion-reducing labeling injunction against I.O.B. Realty’s sauce use, while recognizing that decades of concurrent “Patsy’s” restaurant use limited straightforward exclusivity claims and required careful coordination with trademark registration proceedings.


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