They have a case under the concept of dilution of a unique trademark.
Not buying it. If anything, the sign is reinforcing the association of those colors and the map with New Jersey. Depriciation is a key concept of dilution. And the trademark dilution revision act requires the trademark to be outstanding to the public as a whole: in this case, the pizza is plainly being marketed to former residents of the NY-NJ area; good luck trying to prove that someone from Arizona or Montana or Michgan could tell the NJT from the GSP, let alone identify the colors and logo. The GSP isn’t even used by interstate travelers.
Right, because the silhouette of a state in a circle is soooo unique. That silhouette belongs more to the pizza shop owner then is does to the government.