Internet Advertising Did Not Prevent U.S. Concurrent Use Registration

Thanks to John Welch at "The TTABlog" for pointing to a rare, citable ruling on concurrent use proceedings from the U.S. Trademark Trial and Appeal Board in CDS, Inc. v. I.C.E.D. Management, Inc., Concurrent Use No. 94001250 (TTAB, July 6, 2006), where the Board held that CDS was entitled to a concurrent use registration for the state of Kansas and a portion of the state of Missouri located within 50 miles of Lenexa, Kansas; and that ICED’s registration was limited to exclude those areas.

As a general rule in the U.S., a prior user of a mark is entitled to a registration covering the entire United States. However, the prior user's rights are limited to the extent that the subsequent user can establish that

1. no likelihood of confusion exists, and
2. it has concurrent rights in its actual area of use, plus its area of natural expansion.

Priority is therefore not normally an issue in concurrent use proceedings. Rather, the question is whether the concurrent use applicant has met the jurisdictional requirement of establishing use in commerce prior to the defendant’s application filing date.

In this case, CDS began using its mark for its services in the Kansas City area in 1993, which is before the July 18, 1994 filing date of ICED’s application. Although there was some evidence that CDS and ICED did, at one time, operate in overlapping territory, CDS withdrew from the overlapping territory so that its previous use in the territory did not preclude a determination that there is no likelihood of confusion. According to the Board

[W]hile we look to the filing date of ICED’s application to determine whether
there is jurisdiction for a concurrent use proceeding, we are not locked into
that date for making our determinations on the appropriate territory for the
parties and the likelihood of confusion question. . . . Therefore, CDS’s retreat
from the overlapping territory prior to the close of the testimony period is
effective in eliminating an area of potential likelihood of confusion.

Once the Board determined that CDS had met the jurisdictional requirements for commencing a concurrent use proceeding, it went on to determine what territory was appropriate for the parties.

ICED as the registrant and [presumptively] prior user “is entitled to a registration covering the entire United States, including areas of its use and nonuse, subject only to the exception of geographic areas where the junior user can prove prior use. The junior user is, in effect, frozen in its area of prior use. However, the area of “prior use” includes more than areas of actual use. The CCPA has held that actual use in a territory was not necessary to establish rights in that territory, and that the inquiry should focus on the party's (1) previous business activity; (2) previous expansion or lack thereof; (3) dominance of contiguous areas; (4) presently-planned expansion; and, where applicable (5) possible market penetration by means of products brought in from other areas. Weiner King, Inc. v. The Weiner King Corp., 615 F.2d 512, 204 USPQ 820, 830 (CCPA 1980).

After the board limited CDS' rights to the area near Lenexa, Kansas, it went on to consider whether these and other geographic restrictions would still foreclose a likelihood of confusion. In this regard, the Board was not persuaded by ICED argument that there would still be confusion inasmuch as both parties advertise on the Internet.

As we mentioned previously, CDS has a disclaimer on its website that specifies that it does business under the mark THE COPY CLUB in only seven identified states. The Sixth Circuit has “found the existence of a disclaimer very informative, and [it] held that there was no likelihood of confusion, partly on that basis.” Taubman Co. v. Webfeats, 319 F.3d 770, 65 USPQ2d 1834, 1839 (6th Cir. 2003), citing, In Holiday Inns, Inc. v. 800 Reservation, Inc., 86 F.3d 619, 39 USPQ2d 1181 (6th Cir. 1996). Here, too, in the context of a concurrent use proceeding, and because of our view that advertising on the Internet does not automatically preclude concurrent use registration, we find that the presence of a disclaimer on CDS's website is likewise helpful in avoiding confusion in this case.

Therefore, we conclude that the specific evidence of the parties’ simultaneous use on the Internet in this case does not require us to find that there is a likelihood of confusion.

As to the effect of the Internet on concurrent use proceedings, John writes that "the Board answered the question raised last year in the HUBCAP HEAVEN case [not citable as precedent], TTABlogged here."