CAFC Reverses TTAB's "MONEY MART" Decision Due to Error in Assessing Priority

In a non-precedential ruling, the CAFC reversed the Board's decision [here] denying cancellation of registrations for the mark MONEY MART in standard character form for loan financing, check cashing services, not including pawn shop services, and for the mark in design form (below) for pawn shop and pawn brokerage services, concluding that the Board had erred in denying petitioner's claim of priority. The Board had found that Respondent Dollar Financial had priority because of earlier use of the MONEY MART mark for "loan financing services," which encompass pawn shop services. Wrong, said the court. Brittex Financial, Inc. v. Dollar Financial Group, Inc. Appeals Nos. 2021-1370 and 2021-1449 (Fed. Cir. November 23, 2021) [not precedential].

Petitioner Brittex claimed use of the mark MONEY MART for pawn brokerage services since 1993. Dollar began using MONEY MART for "certain services in 1984 that fit under the the labels 'loan financing, check cashing, and electronic fund transfer services,'" and it owned a 2007 registration for the mark for "loan financing" services.

The Board found that Brittex was the first to offer pawn brokerage and pawn shop services under its mark MONEY MART PAWN (1993). However it found that those services were "covered or encompassed by loan financing," and so Dollar had priority (1984). Because Dollar's registration was more than five years old, Dollar had the exclusive right to use the mark in connection with those services. Having decided the priority issue in Dollar's favor, the Board denied the petition for cancellation.

The CAFC, however, ruled that "the Board's conclusion regarding priority cannot stand." "Brittex, not Dollar, was the first to use that mark in connection with pawn brokerage and pawn shop services."

The Board set forth no sound basis for drawing a different conclusion. The evidence readily showed, of course, that one part of pawn brokerage and pawn shop services is one kind of “loan financing.” But the Board did not cite any authority, or offer legal support, for using that fact to strip Brittex of its facial priority. *** Even as a general matter, the Board provided no support for the notion that a registrant has priority as to a specific service it was second to offer just because it was first to offer a different specific service that is a species of a genus that covers both specific services.

Moreover, pawn brokerage and pawn shop services "integrate two different components, only one of which can be labeled 'loan financing'—the lending, but not the retail sale of collateral." So if the Board found that this "mixed-character business" is covered by "loan financing services," that was "unreasonable and unsupported by the evidence."

However, the Board did not err in denying Dollar's Morehouse defense - i.e., that because of Dollar's earlier registration for loan financing services, Brittex could not be damaged by registration of Dollar's mark for pawn-related services. A Morehouse defense requires that the prior registration be for the same mark and the same services as the mark in the challenged registration. Here, as the court concluded, the services are not the same.

And so the CAFC reversed and remanded the case to the TTAB for further proceedings.

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TTABlogger comment: The Morehouse defense very rarely works, but here is a case where it did.

Text Copyright John L. Welch 2021.