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Two Legally Identical Trademarks Can Register With Geographic Restrictions

This recent precedent of the TTAB involves concurrent use registration. This trademark concept allows two unrelated trademark owners to co-exist with legally identical trademarks, each having a registration limited to a distinct geographic area. As practitioners we work with clients with concurrent use issues. However, the TTAB does not render many concurrent use decisions and even fewer are precedential. For these reasons, it is important to pay close attention to the Board’s Findings in Boi Na Braza LLC v. Terra Sul Corporation a/k/a Churrascaria Boi Na Brasa, Concurrent Use No. 94002525 March 26, 2014 [precedential].  In 2002 Boi Na Braza Inc. (hereinafter “Plaintiff”) registered two marks for the term BOI NA BRAZA (one word mark, the other a design mark incorporating the term “Boi Na Braza”) for restaurant services. Terra Sul Corporation (hereinafter “Defendant”) petitioned to cancel the word mark for BOI NA BRAZA, based on priority of use of its mark BOI NA BRASA for restaurant services and other related services. The Board granted the cancellation petition. Then, Plaintiff initiated a concurrent use proceeding for a geographically restricted registration.

Concurrent use proceedings are governed by the Trademark Act, Section 2(d) of 15 U.S.C. §1052. There are two conditions precedent to the issuance of concurrent registrations. These two conditions are as follows: (1) the parties must be entitled to concurrent use of the marks in commerce, and (2) there would be no likelihood of confusion, mistake, or deception as to the source of the goods or services in the market place resulting from the continued concurrent use of the marks. See America’s Best Franchising Inc. v. Abbott, 106 USPQ2d 1540 (TTAB 2013). In addition, the Plaintiff’s use must have commenced prior to the filing date of the Defendant’s trademark application.

The first requirement means that one must adopt the trademark in good faith without the knowledge of a prior user in another geographical area, without any confusion as to source and there must be a level of public recognition. See Woman’s World Shops Inc. v. Lane Bryant Inc., 5 USPQ2d 1985 (TTAB 1988). The Plaintiff satisfied this mandate. The second condition precedent requires that there be no likelihood of confusion if a geographic restriction is applied to the registration. To determine this the Board looks to how long the parties coexisted without evidence of actual confusion. Here, there has been 15 years of coexistence without confusion as to source. This weighs in favor of allowing concurrent use. In addition, the Board and Courts have held that with certain types of services, specifically restaurant services, confusion can be avoided with identical trademarks and like services if there are geographic restrictions. See Pinocchio’s Pizza v. Sandra Inc., 11 USPQ2d 1227 (TTAB 1989); Nark Inc. v. Noah’s Inc., 212 USPQ 934 (TTAB 1981). The reasoning is that restaurant services by definition are rendered in a particular geographic area. Therefore, the second requirement was also satisfied.

The Board went on to determine the geographic scope of each registration. The TTAB relied on the general rule that a prior user is entitled to trademark rights in the entire U.S. except in the area of actual use (and natural expansion) of the subsequent user if no likelihood of confusion exists. However, this presumption can be overcome if the prior user remains static and the subsequent user filed first for registration. See In re Beatrice Foods Co., 429 F2d 466, 166 USPQ 431 (CCPA 1970).  Then, the party first to file for a registration is rewarded with rights in the U.S. and an area of actual use, plus natural expansion is carved out for the prior user. The other primary factors to consider are: (1)previous business activity; (2)previous expansion or lack thereof; (3)dominance of contiguous areas; (4)presently planned expansion; and (5)possible market penetration by means of products brought in from other areas.

In the end, the Board granted the nationwide rights to the Plaintiff. The Plaintiff was the first to file for a registration, the party to expand, but the subsequent user of the trademark. The Board geographically restricted the Defendant’s rights to New York and New Jersey . Keep in mind that the Defendant was first to use the mark, but only in New Jersey, but late to file for a registration and did not expand outside of New Jersey over the course of 18 years. The Board included New York in the Defendant’s territory, because it considered it within its zone of natural expansion.

The concurrent use registration proceeding is not commonly invoked because proceedings before the TTAB are expensive and time consuming. Therefore, it is practical to attempt to resolve this type of a dispute during the Office Action phase of the trademark prosecution. The parties can enter into a voluntary agreement wherein they restrict their use of the mark to certain distinct geographic areas. This agreement can be submitted to the Examining Attorney and this along with persuasive argument may be sufficient to convince the Examiner that the application should be allowed to proceed. If you have questions regarding a possible concurrent use situation, or another question pertaining to trademarks, please contact one of our NY trademark lawyers for a courtesy consultation.