TTAB - Trademark Trial and Appeal Board - *1 MORGAN SERVICES, INC. v. MORGAN LINEN SERVICE, INC. v. MORGAN SYSTEMS, INC. Concurrent Use No. 660 July 24, 1989

Trademark Trial and Appeal Board

Patent and Trademark Office (P.T.O.)

 

*1 MORGAN SERVICES, INC.

v.

MORGAN LINEN SERVICE, INC.

v.

MORGAN SYSTEMS, INC.

Concurrent Use No. 660

July 24, 1989

 

Before Sams, Rice and Rooney

 

 

Members

 

 

Opinion by Sams

 

 

Member

 

 

 This case comes up on applicant's request for reconsideration and modification of an order issued by the Board on May 2, 1988. [FN1] In its decision of May 2, 1988, the Board considered the concurrent use applicant's motion for judgment, which was supported by an agreement executed by applicant and the two parties named by applicant as exceptions to its claim of a right of exclusive use of its mark. In deciding the motion, the Board referred to the language of Section 2(d) of the Trademark Act, noting that one of the jurisdictional requirements for the Board's consideration of an application for concurrent use is that the concurrent use applicant and those named as exceptions to the concurrent use applicant's claim of a right to exclusive use of its mark

   ... have become entitled to use such marks as a result of their concurrent lawful use in commerce prior to ... the earliest of the filing dates of the applications pending or of any registration issued under [the Trademark Act] ...

The Board noted that, in this case, the concurrent use applicant owned two registrations of its mark and that the excepted users became entitled to use their marks by virtue of territorial assignments to them of those marks by the concurrent use applicant, which assignments occurred subsequent to the filing dates of the concurrent use applicant's two registrations. Finding a lack of jurisdiction to consider the issue of whether confusion would be likely in the contemporaneous use, by applicant and the named excepted users, of their respective marks, the Board refused registration to the concurrent use applicant and dissolved the concurrent use proceeding. Thereafter, applicant filed a timely request for reconsideration, including a request for voluntary surrender of applicant's two registrations. Applicant was thereby seeking to remove any jurisdictional impediment to consideration of its request for a concurrent use registration.

 

 

 We now believe our decision of May 2, 1988, denying registration for lack of jurisdiction and dissolving the concurrent use proceeding, was incorrect, and that decision is hereby vacated.

 

 

 The excepted users in this case, according to their answers filed under  Trademark Rule 2.99, and according to representations made in the agreement among the parties, filed in support of applicant's motion for judgment, both obtained trademark rights in their marks through assignment from the concurrent use applicant. The marks were assigned with the good will of going busineses-- businesses that, according to the representation of the parties in their agreement in support of the motion for judgment, were begun many decades ago. We think that the assignees (the excepted users) should stand in the shoes of the assignor (the concurrent use applicant), for purposes of determining whether the Section 2(d) jurisdictional requirements for the Board's consideration of concurrent use claims are met. Here, obviously, the use by the assignor (the concurrent use applicant) predates the filing dates of its own registrations. Thus, the jurisdictional requirements have been met and there is no need for surrender of the registrations. The only way we could find otherwise would be a determination that, as a matter of law, territorial assignees of trademark rights are an exception to the rule that an assignee stands in the shoes of the assignor. We know of no precedent for so holding. In fact, the acquisition of concurrent use rights through territorial assignment, while not the classic basis for claiming concurrent trademark rights at common law (adoption in a remote area without knowledge of the prior use being the classic formulation), has nonetheless been recognized and validated by the courts. See U.S. v. Western Electric Co., Inc. et al., 220 USPQ 113, at 124- 131 (D.D.C.1983); cf. K mart Corp. v. Cartier Inc., 486 U.S. 281 (1988), 6 USPQ2d 1897 [in deciding three cases involving gray market goods, both Justice Brennan (concurring in part and dissenting in part) (at p. 1911) and Justice Scalia (concurring in part and dissenting in part) (at p. 1916) and the justices joining each of them in their respective opinions recognized the validity of concurrent trademark rights based on territorial assignments, although the justices disagreed as to the time at which courts began recognizing the validity of such assignments]. As for registration as a concurrent user, we see no hostility inherent in the statutory scheme of Section 2(d) to this development in the law of concurrent use.

 

 

  *2 Having found no jurisdictional impediment to considering the application for concurrent use registration, we turn to applicant's request for modification of the Board's decision of May 2, 1988 and reconsideration of the motion for judgment.

 

 

 By its request for modification, applicant seeks specific wording changes in the Board's opinion. In view of our action herein, vacating the decision of May 2, 1988, the request for modification is denied as moot.

 

 

 By its request for reconsideration, applicant seeks to have proceedings in this case resumed for consideration of additional evidence touching on its application for a concurrent use registration. This evidence, as noted above, is a request, under Section 7 of the Trademark Act, for acceptance of a voluntary surrender of applicant's two registrations (Nos. 1,045,654 and 1,245,586). Relying on our now vacated decision of May 2, 1988, applicant urges that the voluntary surrender eliminates the jurisdictional impediment to consideration of applicant's application for concurrent use registration. In view of our action vacating the decision of May 2, 1988, for the reasons set forth above, we will consider applicant's motion for judgment without applicant's having to surrender its registrations. [FN2]

 

 

 In considering the motion for judgment and, in particular, the parties' agreement submitted in support of that motion, we adhere to statements, in the nature of obiter dicta, we made in our opinion explaining our now vacated decision of May 2, 1988. We noted that the parties' agreement includes a provision that the parties will deal with future expansions of use through amendments to their registration(s) under Trademark Rule 2.173 and stated that, contrary to the parties' agreement, territorial restrictions to trademark registrations can be made only as the result of concurrent use proceedings in the Patent and Trademark Office or as the result of a court decision. We noted further that the agreement provides that the concurrent use applicant's unrestricted registrations may remain unrestricted and stated that, if the Board ultimately finds that applicant is entitled to a concurrent use registration based on its present application, these previously-issued registrations would have to be restricted by the Board to incorporate geographical restrictions similar to those included in the present application.

 

 

DECISION AND ORDER:

 

 

 The Board's decision of May 2, 1988, dissolving the concurrent use proceeding, is hereby vacated. Applicant is allowed until August 25, 1989 in which to submit a new agreement among the parties, in accordance with our opinion herein, showing applicant's right to a concurrent use registration, failing which, discovery and trial dates will be reset.

 

 

J. D. Sams

 

 

J. E. Rice

 

 

L. E. Rooney

 

 

Members, Trademark Trial and Appeal Board

 

 

FN1. The Board regrets its delay in acting on this matter.

 

 

FN2. The two registration certificates (Nos. 1,045,654 and 1,245,586) are returned herewith to the registrant (concurrent use applicant).

 

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