Wednesday, July 12, 2006

Citable No. 35: TTAB Issues Rare Concurrent Use Ruling Re "THE COPY CLUB"

It may not be as shocking as the Zinedine Zidane head butt in the World Cup final, but it is quite a surprise to find the TTAB issuing a ruling in a current use proceeding -- and a citable ruling at that! In CDS, Inc. v. I.C.E.D. Management, Inc., 80 USPQ2d 1572 (TTAB 2006), the Board held that Applicant CDS is entitled to a concurrent use registration for the mark THE COPY CLUB for various document copying, publishing, and management services "for the State of Kansas and that portion of the state of Missouri located within 50 miles of Lenexa, Kansas." In turn, I.C.E.D.'s registration for the mark COPY CLUB for similar and overlapping services was "restricted" to the entire United States except for the area of CDS's registration.

CDS claimed first use dates of April 29, 1993, and sought registration for seven states: Utah, New Jersey, New York, Connecticut, Pennsylvania, Kansas, and Missouri. I.C.E.D. was named as the excepted user in CDS's application. I.C.E.D.'s registration issued on an application filed on July 18, 1994. CDS filed an opposition to that application in 1996, and in 1997 CDS filed its own application, which it promptly amended to a concurrent use application.

In 1998, the Board granted I.C.E.D.'s motion for summary judgment (presumably based on its prior use) and dismissed the opposition. I.C.E.D.'s registration issued in 2001 and in 2002 this concurrent use proceeding was instituted. It was CDS's burden "to prove its rights as a lawful concurrent user and that concurrent use of the parties' marks is not likely to cause confusion."

I.C.E.D.'s filing date of July 18, 1994 "is key because ... that date establishes 'jurisdiction' for applicant to obtain a concurrent use registration, i.e., CDS must show that it began using its mark prior to the filing date of ICED's application."

In his trademark fashion, Judge Hohein set out the factual record and the arguments of the parties in some detail. The Board found that I.C.E.D. was the first user "because it began using its COPY CLUB mark for document preparation and handling services in 1992." CDS was formed in February 1993 and began using its mark one month later. A seven-state review of the evidence (with much quoted testimony) led the Board to conclude that CDS began using its mark in the Kansas City area in 1993, prior to I.C.E.D.'s filing date. I.C.E.D., on the other hand, "has not used its COPY CLUB mark in any of the seven states" that CDS sought. Therefore CDS met the "jurisdictional requirement" or "condition precedent" of its lawful use in commerce outside of I.C.E.D.'s trading area.

The Board noted that there had been some overlap between the parties (in Texas and California), but that CDS stopped its usage in those two states once it learned that I.C.E.D. had prevailed on summary judgment in the opposition. This previous but terminated use "does not preclude a determination that there is no likelihood of confusion" (even though the termination of use occurred after the filing date of I.C.E.D's application).

Next, the Board set out to determine the territory appropriate for each party, noting that the senior user is entitled to a nationwide registration, including areas of its use and non-use, subject only to the excepted areas where the junior user can prove prior use. "The junior user is, in effect, frozen in its area of prior use." However, the Board noted, junior's area of "prior use" includes not only 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., 204 USPQ 820, 830 (CCPA 1980)."

The Board found that CDS's use in Utah, New Jersey, New York, Connecticut, and Pennsylvania was "de minimis and nebulous," amounting mostly to discussions rather than rendering of services. The evidence of CDS's activities in those states was simply too indefinite to establish priority.

However, CDS did show use of its mark in Kansas, and under the Weiner King analysis it was entitled to the entire state. The testimony that a large percentage of CDS's business in Kansas City comes from Missouri led the Board to award CDS the portion of Missouri that lies within 50 miles of Lenexa, Kansas.

The Board then turned to the issue of whether there would still be a likelihood of confusion despite the geographical restrictions imposed. I.C.E.D. argued that there would still be confusion because both parties advertise on the Internet, but the Board flatly rejected that argument: "We do not believe that the creation of the Internet has rendered the concurrent use provision of the Trademark Act moot." "[T]he presence of advertising on the Internet does not automatically preclude concurrent use registration." Noting that CDS includes a disclaimer on its website stating that it does business under its mark only in the seven identified states, the Board ruled that the specific record evidence "does not require us to find that there is a likelihood of confusion."

For the foregoing reasons, the Board ruled that CDS is entitled to a concurrent use registration restricted to Kansas and a neighboring portion of Missouri.

TTABlog comment: As to the effect of the Internet on concurrent use proceedings, the Board answered the question raised last year in the HUBCAP HEAVEN case, TTABlogged here.

Text Copyright John L. Welch 2006.


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