While this is true, there are bounds of I (heart) something_somethings and AFAIK, NYC does not go after them for infringement (I feel as though Apple's rendition is sufficiently different that it's not the same as the orig (hand lengths, motion, etc).
Moreover, in the NYC case, I (heart) NY is trademarked and part of an advert campaign, so I can understand their defence of their TM. Did The Swiss RR get a design patent for the timepiece?
So, while you are right about the ability of a gov to register and/or patent things, I'm surprised they'd be willing to follow through. It's not as though Apple is trying to make money off of them by selling a knock off product or piggybacking on an advert campaign.
Good point none the less and thanks for the explanation.
You could probably expect to get a C&D letter from NY State for designing a logo like that. At least, plenty of other people have. Google for "i heart nyc trademark infringement" and read the top few links. Apparently they have sent out over 3000 such requests since registering the mark.
Sometimes the claims of infringement are upheld, sometimes not. The more important thing, legally, is that NY needs to show that they are actively defending the mark to prevent trademark dilution.