Wednesday, April 02, 2014

Precedential No. 14: Junior User Awarded Concurrent Use Registration for Entire Country Except New Jersey and New York

This complicated, contested concurrent use proceeding involved an application to register the mark BOI NA BRAZA, in standard character form, for restaurant and bar services, with a geographic restriction claiming the entire United States except for the state of New Jersey. Defendant Terra Sul, named as the exception to plaintiff's exclusive rights, claimed that it had used its mark CHURRASCARIA BOI NA BRASA in New Jersey, New York, and elsewhere and that plaintiff BNB's mark should be denied registration or restricted to plaintiff's three areas of actual use: Dallas, Atlanta, and Cincinnati. The Board ruled that plaintiff BNB was entitled to a concurrent use registration for the entire United States, except New Jersey and New York. Boi Na Braza, LLC v. Terra Sul Corporation a/k/a Churrascaria Boi Na Brasa, 110 USPQ2d 1386 (TTAB 2014) [precedential].

Plaintiff BNB owned a registration for the BOI NA BRAZA mark, but it was cancelled in 2009 on the ground of likelihood of confusion with Terra Sul's previously-used mark. BNB still owned an "incontestable," geographically unrestricted registration for the mark BOI NA BRAZA in the design form shown immediately above, for restaurant and bar services. Because that registration was claimed by the plaintiff in the subject concurrent use application, it was included in this proceeding. See TBMP Section 1104.

There are two conditions precedent to the issuance of concurrent registrations: (1) that the parties are presently entitled to concurrently use the mark in commerce, and (2) there is no likelihood of confusion, mistake, or deception in the marketplace as to the source of the goods. In addition, a party who claims concurrent rights must have commenced use of its mark prior to the filing date of any application owned by the conflicting claimant to the same mark or to a mark likely to cause confusion. The applicant/plaintiff has the burden of proof to demonstrate its entitlement to a concurrent use registration.

Plaintiff BNB claimed that it first used its mark in 1999, in good faith and without knowledge of Terra Sul's use, prior to the filing dates of any of Terra Sul's applications. Therefore it met the "jurisdictional requirement" for a concurrent use proceeding, and BNB was entitled to use its mark in its own geographical area of use. There remained in dispute the rights to the remainder of the United States.

The next question was whether, with an appropriate geographical restriction, likelihood of confusion could be avoided. The Board concluded that the answer was yes.

The parties had already co-existed for 15 years without credible evidence of actual confusion, and that fact weighed heavily against a finding that confusion would be likely in geographically restricted territories. Furthermore , the Board and other tribunals "have often found that confusion can be avoided when restaurant services in particular are offered under identical marks but in geographically restricted territories." Moreover, by definition, restaurant services are rendered in particular geographic locations.

Although the parties' advertising overlapped, that did not change the Board's conclusion, nor did the fact that both parties have a presence on the Internet, because in this case the overlap in advertising was minimal.

The Board then turned to the issue of the territory to which each party was entitled. Actual use in a territory is not necessary to establish rights in that territory. And as a general rule, a prior user of a mark is entitled to a registration covering the entire United States, limited only to the extent that the junior user can establish that no likelihood of confusion exists and that it has concurrent rights in its actual area of use plus its area of natural expansion. However, this presumption may be overcome if a senior user "remains static" and the junior user is the first to file for registration.

In other words, there is a policy of encouraging prompt registration of marks, and the concurrent use provision of Section 2(d) exhibits no bias in favor of the prior user.

Moreover, this case presents the unusual circumstance in which the plaintiff/applicant owns an "incontestable registration" for a composite mark that incorporates the term BOI NA BRAZA. Pursuant to Sections 15 and 33(b)(5) of the Trademark Act, use of such a mark cannot be challenged on the basis of prior rights and likelihood of confusion. A prior user normally may carve out of an incontestable registration only "the specific areas in which it has established its prior rights prior to actual or constructive notice of said registration." [This is a rare circumstance in which the "incontestable" status of a registration has some importance in a TTAB proceeding - ed.].

Since the first use of their mark in 1996, Terra Sul and its predecessors never expanded beyond their Newark, New Jersey neighborhood. BNB, the first to file an application, offered restaurant services in three cities geographically remote from one another and from Terra Sul. Although Terra Sul provided its services in New York to a limited extent, there was no evidence of use or promotion targeted to New York prior to its receipt of constructive notice of BNB's (now-cancelled) registration. Nonetheless, the record evidence suggested that Newark is a neighbor near enough to New York to draw customers from New  York City (who must traverse nearly 10 miles, three river crossings (including the Holland Tunnel), and Jersey City to reach Newark's Ironbound neighborhood.) The Board concluded that "the New York's restaurant scene's embrace is sufficiently broad to reach Newark" (based on inclusion of Terra Sul's restaurant in the Village Voice "best of nyc 2006" and evidence that some of its customers live in New York). [BNB had moved, in the alternative, to restrict the subject application to exclude New Jersey and New York].

The Board concluded that BNB is entitled to a nationwide registration, but excluding New Jersey and New York. And it stated that Terra Sul may elect to amend its two pending applications to include a concurrent use statement limiting its registration rights to New Jersey and New York.

Read comments and post your comment here.

TTABlog note: Is there such a thing as an "incontestable registration?" See Section 15 of the Trademark Act, which speaks of incontestability in terms of "exclusive right to use," not "registration."

Text Copyright John L. Welch 2014.


At 8:43 AM, Anonymous Michael Feigin, Esq. said...

It's actually surprising to me that there aren't more concurrent use marks with geographic restrictions. It seems like a good way to solve many problems.


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