Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 PINOCCHIO'S PIZZA, INC.
v.
SANDRA INCORPORATED
April 25, 1989
Hearing: March 14, 1989
Concurrent Use No. 667 to Registration No. 1,314,035, filed March 7, 1984
Wendell Coffee for Pinocchio's Pizza, Inc.
James L. Kurtz for Sandra Incorporated
Before Rooney, Krugman and Seeherman.
Members
Member
An application has been filed by Pinocchio's Pizza, Inc., a Kansas corporation, to register "PINOCCHIOS" as a service mark for restaurant services featuring pizza. [FN1] On November 7, 1985 the application was amended to seek concurrent use registration for the United States with the exception of the state of Maryland.
Named as an exception to applicant's right of exclusive use was Sandra Incorporated, a Maryland corporation, by virtue of its use of "PINOCCHIO'S" as a service mark for restaurant services in the state of Maryland. Sandra Incorporated's application to register the "PINOCCHIOS" mark issued as a geographically unrestricted registration on the Principal Register on January 8, 1985 [FN2] and the registered mark was cited as a bar under Section 2(d) of the Act to the registration of applicant's mark, thereby resulting in applicant's amendment of its original application for an unrestricted registration to an application seeking a concurrent use registration.
After the concurrent use proceeding was instituted, registrant was allowed time in which to file an answer or statement pursuant to Trademark Rule 2.99 but no answer or statement was filed. [FN3] Thereafter, on March 31, 1987, the Board issued a trial order, setting forth the times for taking discovery, the times for taking testimony and the times for filing briefs.
The record herein consists of applicant's application file, registrant's registration file, applicant's reliance on its unanswered requests for admission propounded upon registrant and the testimony deposition (and exhibits) of Rick Hall, applicant's president. Neither party filed a brief on the case. [FN4] Both parties were represented at an oral hearing held before this panel.
Applicant has shown, by virtue of the unanswered requests for admission propounded to registrant upon which applicant has relied, [FN5] that registrant renders restaurant services under the "PINOCCHIO'S" mark in only one location in Catonsville, Maryland; that this restaurant has never had more than five employees at any one time; that the restaurant has never had more than 1,000 square feet of floor space and that registrant has never had any plans for expanding its operation of "PINOCCHIO'S" restaurant services beyond the current location in Catonsville, Maryland.
The Rick Hall deposition demonstrates that applicant began using the "PINOCCHIOS" mark in connection with restaurant services in October 1978; that applicant owns or franchises some ten restaurants under the "PINOCCHIOS" mark in the state of Texas; that applicant is in the process of opening a restaurant in Oklahoma and that a prospective franchisee is considering opening a restaurant in Arkansas. Applicant has incurred expenses in conducting demographic or media research surveys in connection with prospective locations in Oklahoma and Arkansas. In addition, the Hall deposition shows that applicant has advertised the restaurant services on various radio and television stations in Texas and that it has advertised its restaurant services in various Texas newspapers as well as in two newspapers located in New Mexico.
*2 It is clear that the marks are virtually identical, the only difference being the insignificant inclusion of an apostrophe in registrant's "PINOCCHIO'S" mark. Moreover, the services are identical and we conclude that confusion in the marketplace, if the marks are used in the same geographical area, is not only likely but certain. Accordingly, the only issue to be determined is the territorial extent of the right of each party to use its mark and the parties' respective rights to registration. See: Weiner King Inc. v. Wiener King Corp., 615 F.2d 512, 204 USPQ 820 (CCPA 1980).
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 subsequent 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. See generally, Rice: Concurrent Use Applications and Proceedings, 72 TMR 403 (July-August, 1982) and cases cited therein. This general rule, however, is not absolute and is subject to exceptions. In the case of In re Beatrice Foods Co., 429 F.2d 466, 166 USPQ 431 (CCPA 1970), the Court noted that where the prior user does not apply for a registration before registration is granted to another, there may be valid reasons, based on a policy of rewarding those who first seek registration, for limiting his registration to the area of actual use and permitting the prior registrant to retain the nationwide protection of the Act restricted only by the territory of the prior user. See, also: Weiner King, supra. The Court in Weiner King, however, rejected a mechanical approach that always favors the first to register, stating that the policy favoring the first to register is sound when applied to the proper case, as determined by the particular facts and circumstances. See: Weiner King at 204 USPQ 830. See, also: McCarthy: Trademarks and Unfair Competition, Section 20:23 (1984). In determining which party is entitled to which territory, the Court, in Weiner King, reiterated certain criteria originally set forth in Beatrice Foods, supra. The Court noted that actual use in a territory is not necessary to establish rights in that territory and that the inquiry should focus on a number of factors, including the party's previous business activity, previous expansion (or lack thereof) and presently planned expansion.
In the present case, applying the above noted criteria to the parties, we find that the general policy of favoring the first to register is inappropriate in this case and that all relevant factors favor applicant Pinocchios Pizza, Inc. except for the fact that applicant was not the first to register. Indeed, applicant, as the prior user, would prevail, on the facts present herein, in a petition to cancel the registered mark, had such a course of action been taken. In any event, the record shows that registrant operates one relatively small restaurant in Maryland, having a small number of employees and a relatively small amount of square footage. Most significantly, registrant has demonstrated no plans for expansion since its alleged date of first use in 1981.
*3 Applicant, by contrast, has expanded to ten restaurants in Texas since its first restaurant opened in 1978 in Lubbock. Most of applicant's restaurants are larger than registrant's restaurant and most have substantially more employees employed in these establishments. Applicant has also demonstrated plans to expand outside of Texas, specifically, into Oklahoma and Arkansas and applicant has further showed promotion of its restaurants in out-of-state publications, namely, two New Mexico newspapers.
In view of the foregoing, we believe that the purpose of the statute is best served by granting applicant a registration for the entire United States except for registrant's trading area. Accordingly, applicant's application for concurrent use registration is granted to the extent that it is deemed entitled to the entire United States except for the state of Maryland and except for an area consisting of a fifty-mile radius around registrant's restaurant in Catonsville, Maryland which may include areas outside the state of Maryland. [FN6] Registrant's registration will be restricted to the state of Maryland and the area consisting of a fifty-mile radius around registrant's establishment in Catonsville, Maryland.
L. E. Rooney
G. D. Krugman
E. J. Seeherman
Members, Trademark Trial and Appeal Board
FN1. Application Serial No. 521,621 filed February 11, 1985 alleging a date of first use of October 14, 1978.
FN2. Registration No. 1,314,035 issued January 8, 1985 based on an application filed March 7, 1984 and alleging a date of first use of November 19, 1981.
FN3. No answer or statement is required in the case of a specified concurrent user who owns an application or registration covering its involved mark. See: Rule 2.99(d)(2).
FN4. Upon applicant's failure to file a brief within the time allowed, the Board issued an order to show cause why applicant's failure to file a brief should not be treated as a concession of the case. Applicant successfully discharged the show cause order but did not persuade the Board that its late filed brief should be accepted. In a ruling mailed August 19, 1988, the Board indicated that said proposed brief would not be considered. On November 3, 1988, the Board denied applicant's request for reconsideration of the August 19, 1988 ruling.
FN5. Since no responses were made to the requests for admission, they are deemed admitted. See: Rule 36, FRCP.
FN6. We take judicial notice of the fact that Catonsville, Maryland is located between Baltimore, Maryland and Washington, D.C.