Internet Usage Threatens Existence of Concurrent Use Registrations

In a rare concurrent use decision, Hubcap Heaven, LLC v. Hubcap Heaven, Inc., Concurrent Use No. 94001147 (Jan. 25, 2005) [not citable], the Trademark Trial and Appeal Board (“TTAB”) questioned the continued viability of concurrent use registrations in the face of the Internet's global reach. Concurrent usage is based on the premise that two owners of the same trademark for competing goods and services can coexist by carving out strict geographic territories for each user. The Internet, however, has no geographic boundaries.

Hubcap Heaven, LLC (“Applicant”) filed a concurrent use application in 1995 to register the service mark HUBCAP HEAVEN in International Class 42 for “wholesale and retail store, mail order, and online electronic catalog sales order services in the field of new, reconditioned and used automotive parts.” Applicant also included in its application a request to restrict its existing registration, issued in 1993, for the same mark for “automotive hubcaps, wheel covers and wheels” in International Class 12. Applicant sought nationwide rights, excepting limited areas of use within four states where Hubcap Heaven, Inc. (“Excepted User”) used the same service mark for the sale of automotive hubcaps. Applicant claimed a date of first use in commerce of Jan. 1979 for both the service mark application and existing registration.

Excepted User did not hold a federally registered trademark for its usage.

Excepted User denied Applicant's right to concurrent use registrations, claiming usage of the mark since 1981 in several states and in an online catalog. In the alternative, should the TTAB decide that some concurrent usage could exist, Excepted User sought to limit Applicant's rights to a 50-mile radius of each of Applicant's stores in Maryland and Virginia.

The TTAB first explained concurrent use proceedings and burdens of proof. Citing Trademark Trial and Appeal Board Manual of Procedure (“TBMP”) Section 1108 (2d ed. Rev. 2004), the TTAB noted that a concurrent use proceeding would determine Applicant's right to the registration sought, and the extent, if any, that an already existing registration should be restricted. The TTAB also noted the two requirements to obtain a concurrent use registration: 1) that the parties be entitled to concurrently use the mark in commerce; and 2) that there be no likelihood of confusion as to the source of goods or services.

In the instant case, the TTAB noted the wealth of evidence confirming Applicant's use of the trademark in interstate commerce commencing in 1979. The evidence included print advertisements, Valpak mailings, catalog mailings throughout the East Coast, and Internet sales. The evidence showed Internet sales as far away as Wyoming, Massachusetts, Iowa, Virginia, and Georgia. The TTAB also found it persuasive that Applicant applied voluntarily for exceptions to its otherwise exclusive rights to use the trademark, because Excepted User's usage in four locations predated Applicant's filing date of the application underlying Applicant's involved registration.

The TTAB then turned its attention to Excepted User and found the record to be “devoid of evidence relating to user and the extent of its use of the mark.” The TTAB flatly rejected as “patently absurd” Excepted User's contention that Applicant had the burden to show the extent of Excepted User's use of the trademark. The TTAB stated that Excepted User was in the best position to know where it used the mark. Because Excepted User claimed rights greater than those acknowledged by the concurrent use applicant, Excepted User had the burden to produce such evidence. The TTAB noted that Excepted User was not seeking a registration and therefore had no duty to prove the “extent of its rights except insofar as such proof would suffice to circumscribe those rights claimed by [A]pplicant.”

Excepted User did not, however, even establish its dates of first use and its areas of use of the mark. It merely made statements in its pleadings, while offering no substantiating evidence. Even if the TTAB were to accept Excepted User's date of first use as 1981, Applicant established use of the mark prior to 1981 and therefore met the “'condition precedent' of its lawful use in commerce outside of the conflicting claimant's area.”

Regarding likelihood of confusion, the TTAB noted that here Applicant had an unrestricted registration and now sought to restrict geographically that registration and its new application. Excepted User submitted no evidence of any overlap of territory or distribution channels. Therefore, the TTAB found no likelihood of confusion if it granted a concurrent use registration.

The TTAB was troubled by one aspect of Applicant's case, namely Applicant's presence on the Internet. The TTAB described its dilemma:

We acknowledge that the juxtaposition, on the one hand, of use of a mark on the Internet, and on the other hand, the seeking of a geographically restricted registration, is troubling. Indeed, in the age of the Internet, concurrent use registrations premised on geographically distinct uses appear to be a legal fiction. …

The TTAB noted the paucity of case law in this area. It cited Allard Enterprises Inc. v. Advanced Programming Resources, 249 F.3d 564, 58 USPQ2d 1710, 1717 (6th Cir. 2001) in which the Sixth Circuit analogized Internet usage to permitted national advertising for an “almost-national user” in a concurrent usage situation. But the TTAB refused to prohibit concurrent use registration when an Internet presence exists, saying that each set of facts deserved a case-by-case analysis.

Here, the TTAB permitted the concurrent use registration, despite Applicant's Internet presence, because there was no evidence that Applicant had any sales in Excepted User's four excepted territories. The TTAB also noted that an Internet Web site does not necessarily mean the entity is engaged in nationwide business. Finally, the TTAB was swayed because Applicant was the prior user, and registrant was voluntarily seeking to limit its rights. The TTAB then granted Applicant's requests for concurrent user status for its existing trademark registration and the new application for services.

This case is enlightening because it raises the inherent contradiction of concurrent use and Internet presence. It is only of limited instruction, however, due to Excepted User's failure to present evidence, and the peculiarity of Applicant limiting its own already extant rights. As cases continue to be brought before the courts and the TTAB, their factual presentations might be more likely to establish more firm precedents that help resolve the future of concurrent user registrations in the Internet age.

In a rare concurrent use decision, Hubcap Heaven, LLC v. Hubcap Heaven, Inc., Concurrent Use No. 94001147 (Jan. 25, 2005) [not citable], the Trademark Trial and Appeal Board (“TTAB”) questioned the continued viability of concurrent use registrations in the face of the Internet's global reach. Concurrent usage is based on the premise that two owners of the same trademark for competing goods and services can coexist by carving out strict geographic territories for each user. The Internet, however, has no geographic boundaries.

Hubcap Heaven, LLC (“Applicant”) filed a concurrent use application in 1995 to register the service mark HUBCAP HEAVEN in International Class 42 for “wholesale and retail store, mail order, and online electronic catalog sales order services in the field of new, reconditioned and used automotive parts.” Applicant also included in its application a request to restrict its existing registration, issued in 1993, for the same mark for “automotive hubcaps, wheel covers and wheels” in International Class 12. Applicant sought nationwide rights, excepting limited areas of use within four states where Hubcap Heaven, Inc. (“Excepted User”) used the same service mark for the sale of automotive hubcaps. Applicant claimed a date of first use in commerce of Jan. 1979 for both the service mark application and existing registration.

Excepted User did not hold a federally registered trademark for its usage.

Excepted User denied Applicant's right to concurrent use registrations, claiming usage of the mark since 1981 in several states and in an online catalog. In the alternative, should the TTAB decide that some concurrent usage could exist, Excepted User sought to limit Applicant's rights to a 50-mile radius of each of Applicant's stores in Maryland and Virginia.

The TTAB first explained concurrent use proceedings and burdens of proof. Citing Trademark Trial and Appeal Board Manual of Procedure (“TBMP”) Section 1108 (2d ed. Rev. 2004), the TTAB noted that a concurrent use proceeding would determine Applicant's right to the registration sought, and the extent, if any, that an already existing registration should be restricted. The TTAB also noted the two requirements to obtain a concurrent use registration: 1) that the parties be entitled to concurrently use the mark in commerce; and 2) that there be no likelihood of confusion as to the source of goods or services.

In the instant case, the TTAB noted the wealth of evidence confirming Applicant's use of the trademark in interstate commerce commencing in 1979. The evidence included print advertisements, Valpak mailings, catalog mailings throughout the East Coast, and Internet sales. The evidence showed Internet sales as far away as Wyoming, Massachusetts, Iowa, Virginia, and Georgia. The TTAB also found it persuasive that Applicant applied voluntarily for exceptions to its otherwise exclusive rights to use the trademark, because Excepted User's usage in four locations predated Applicant's filing date of the application underlying Applicant's involved registration.

The TTAB then turned its attention to Excepted User and found the record to be “devoid of evidence relating to user and the extent of its use of the mark.” The TTAB flatly rejected as “patently absurd” Excepted User's contention that Applicant had the burden to show the extent of Excepted User's use of the trademark. The TTAB stated that Excepted User was in the best position to know where it used the mark. Because Excepted User claimed rights greater than those acknowledged by the concurrent use applicant, Excepted User had the burden to produce such evidence. The TTAB noted that Excepted User was not seeking a registration and therefore had no duty to prove the “extent of its rights except insofar as such proof would suffice to circumscribe those rights claimed by [A]pplicant.”

Excepted User did not, however, even establish its dates of first use and its areas of use of the mark. It merely made statements in its pleadings, while offering no substantiating evidence. Even if the TTAB were to accept Excepted User's date of first use as 1981, Applicant established use of the mark prior to 1981 and therefore met the “'condition precedent' of its lawful use in commerce outside of the conflicting claimant's area.”

Regarding likelihood of confusion, the TTAB noted that here Applicant had an unrestricted registration and now sought to restrict geographically that registration and its new application. Excepted User submitted no evidence of any overlap of territory or distribution channels. Therefore, the TTAB found no likelihood of confusion if it granted a concurrent use registration.

The TTAB was troubled by one aspect of Applicant's case, namely Applicant's presence on the Internet. The TTAB described its dilemma:

We acknowledge that the juxtaposition, on the one hand, of use of a mark on the Internet, and on the other hand, the seeking of a geographically restricted registration, is troubling. Indeed, in the age of the Internet, concurrent use registrations premised on geographically distinct uses appear to be a legal fiction. …

The TTAB noted the paucity of case law in this area. It cited Allard Enterprises Inc. v. Advanced Programming Resources , 249 F.3d 564, 58 USPQ2d 1710, 1717 (6th Cir. 2001) in which the Sixth Circuit analogized Internet usage to permitted national advertising for an “almost-national user” in a concurrent usage situation. But the TTAB refused to prohibit concurrent use registration when an Internet presence exists, saying that each set of facts deserved a case-by-case analysis.

Here, the TTAB permitted the concurrent use registration, despite Applicant's Internet presence, because there was no evidence that Applicant had any sales in Excepted User's four excepted territories. The TTAB also noted that an Internet Web site does not necessarily mean the entity is engaged in nationwide business. Finally, the TTAB was swayed because Applicant was the prior user, and registrant was voluntarily seeking to limit its rights. The TTAB then granted Applicant's requests for concurrent user status for its existing trademark registration and the new application for services.

This case is enlightening because it raises the inherent contradiction of concurrent use and Internet presence. It is only of limited instruction, however, due to Excepted User's failure to present evidence, and the peculiarity of Applicant limiting its own already extant rights. As cases continue to be brought before the courts and the TTAB, their factual presentations might be more likely to establish more firm precedents that help resolve the future of concurrent user registrations in the Internet age.