These are cross appeals from a decision of the Patent and Trademark Office (PTO) Trademark Trial and Appeal Board (TTAB), 188 U.S.P.Q. 471 (1975), in a concurrent use proceeding, No. 350.
Here involved is litigation between the parties to this proceeding in the United States District Court for the District of South Carolina, Florence Division, Holiday Inns. Inc. v. Holiday Inn, 364 F.Supp. 775, 177 U.S.P.Q. 640 (1973), affirmed on the District Court opinion, 498 F.2d 1397, 182 U.S.P.Q. 129 (CA4 1974). This concurrent use proceeding was suspended during the pendency of that litigation, and the TTAB rendered its decision after its conclusion. Familiarity with the opinions in the litigation and with the opinion of the TTAB is assumed. The TTAB rested its decision on the facts as found in the Fourth Circuit litigation. We deem them to be controlling here.
Although there are nominally two appeals before us, they are taken from a single decision of the TTAB. Inherently, however, a concurrent use proceeding involves an adjudication of the rights of two parties. This proceeding was commenced by the filing of an application by Holiday Inn (a corporation), appellant and cross-appellee, to register HOLIDAY INN, application serial No. 367,335, filed August 6, 1970,
The application for the restricted registration was ultimately passed to publication on October 4, 1971, "subject to a Concurrent Use Proceeding with" the aforesaid three registrations. January 20, 1972, the PTO sent out a concurrent use letter and instituted the concurrent use proceeding. February 25, 1972, Holiday Inns, Inc., moved to stay the proceeding in view of the litigation in the federal court in South Carolina, as well as other litigation in a county court in that state. The motion was granted without objection. In September 1974 the PTO was advised of the outcome of the litigation, and on October 25 the TTAB revived the concurrent use proceeding by issuing an order to show cause why the applicant should not be granted a concurrent use registration as requested and why the three registrations of Holiday Inns, Inc., "should not be limited so as to exclude the area comprising Myrtle Beach, South Carolina." Holiday Inns, Inc., responded with an extensive memorandum opposing both of the TTAB's suggestions. Applicant filed a response saying it saw no reason why it should not be granted its restricted registration "for what a court of competent jurisdiction has finally determined to be the prior user's * * * lawful right." Interestingly, it said nothing about the restriction proposed for the registrations of Holiday Inns, Inc. Thereafter the TTAB rendered the decision from which this appeal was taken, refusing applicant's registration and restricting the issued registrations.
To avoid confusion, we shall hereinafter refer to Holiday Inn as the "Applicant" and to Holiday Inns, Inc., as the "Chain."
The facts determinative of this appeal which were established, as between the parties, in the aforesaid Fourth Circuit litigation, are the following. Applicant, through its predecessors in business, was the first user of HOLIDAY INN for motel services, its use being solely in connection with its motel in Myrtle Beach, which use began in 1949. Commencing in 1952, the Chain acquired trademark rights in "Holiday Inn" and procured the aforesaid three registrations, each depicting the mark in a distinctive form, as shown below, the drawing of Reg. 592,541 being in the amended form, in accordance with an amendment filed May 27, 1975. That particular registration was referred to in the litigation as the "great sign."
The Chain, owning or franchising about 1,300 facilities in the United States, has been adjudged entitled to the exclusive use of these trademarks throughout the United States, and these registrations are presently unrestricted. Applicant's application concedes this, except for Myrtle Beach. As to this area of Applicant's "repute," however, Applicant is under an injunction resulting from the Fourth Circuit litigation which reads:
Also relevant here is the following paragraph from the final judgment:
Applicant's Right to Registration
The TTAB refused to grant Applicant a restricted registration of the mark HOLIDAY INN because of (a) its belief that § 2(d) "permits the issuance of concurrent registrations only when confusion, mistake, or deception is not likely" and (b) its opinion that, under the factual situation of this case, "the inevitable result is and will be one of confusion * * *." On point (a), it cited our decision in In re Beatrice Foods Co., 429 F.2d 466, 57 CCPA 1302, 166 U.S.P.Q. 431 (1970).
Upon review of our opinion in Beatrice, we note that the case had nothing to do with a situation in which the respective rights of the parties to a concurrent use proceeding had been settled by a court decision. Beatrice involved two applicants who had reached agreement on territorial rights, and the problems we had to solve all arose from the refusal of the then Patent Office to recognize the rights agreed upon. What we there said about likelihood of confusion had validity in the situation then before us and still has validity in similar situations; but we were not there discussing a situation like the present one or even that part of the statute which controls here.
More in point on the present fact situation is Alfred Dunhill of London, Inc. v. Dunhill Tailored Clothes, Inc., 293 F.2d 685, 49 CCPA 730, 130 U.S.P.Q. 412 (1961), cert. denied, 369 U.S. 864, 82 S.Ct. 1030, 8 L.Ed.2d 84 (1962), wherein, as here, a final court judgment had determined the respective rights of the parties to use marks including "Dunhill." As our opinion points out, it had also been determined by the court that confusion of the public had resulted from concurrent use of "Dunhill" by both parties. Nevertheless, because of an estoppel situation, the New York court had determined that the applicant had a right to continuing use of "Dunhill" notwithstanding the registrant-opposer's rights—and notwithstanding the possibility of public confusion. In its judgment, which included an injunction, and with a view to minimizing, but not necessarily eliminating, confusion, the court spelled out just how the applicant could use "Dunhill" and on what goods. The form was to be DUNHILL TAILORS, both words to be on a line, of the same type, size, and color, and always in capital letters. In the opposition which was before us, we considered the court's determination to be controlling and the applicable statutory law to be that portion of the concurrent use proviso of § 2(d) (15 U.S.C. § 1052(d)) corresponding to the part which now, as revised by the 1962 amendments, reads:
Applicant relies on this provision here.
The Chain's position throughout this proceeding, which seems to have been adopted by the TTAB, has been that even when courts, after a full trial and review on appeal, have fully settled the rights of parties to a litigation respecting trademark use—taking into account public interest as well as the parties' rights—the Commissioner cannot issue a restricted registration without first determining that there is no likelihood of confusion. The Chain also emphasizes the word "may" in the above quotation from § 2(d).
We disagree with the Chain's position. It is clearly contrary to what we did in Dunhill. All members of the court deciding that case were fully aware that there had been confusion, was likely to be more, and that the court which adjudicated the applicant's right to use, in imposing conditions on the manner of use, hoped only to minimize, not to eliminate, confusion
The same is true in reverse.
As for the controlling statutory language of § 2(d), the wording of the section as it was at the time of Dunhill will be found in the opinion of Judge Martin in that case. There was language in the proviso similar to that of the present statute about the Commissioner determining "that confusion or mistake or deceit of purchasers is not likely to result from the continued use of said marks," but that did not deter us from approving a restricted registration "when a court has finally determined that more than one person is entitled to use the same or similar marks." In the present statute, as amended in 1962, subsequent to Dunhill, it appears to us that it has been made even more clear than it was in the original statute that the sentence referring to court determinations is independent of the opening words of the proviso referring to the Commissioner's determination that confusion, etc., is "not likely." We do not consider those words to be a limitation on the provision for granting concurrent registrations on the basis of determinations of right to use by courts of competent jurisdiction.
The Chain points to the word "may" in the sentence dealing with court determination and argues that the sentence is merely permissive, allowing the Commissioner to register in the present situation only "if he should determine that the touchstone requirement—no likelihood of confusion—has been fulfilled." We disagree with this construction. Accord, Avon Shoe Co. v. David Crystal, Inc., 279 F.2d 607, 615, 125 U.S.P.Q. 607, 614 (C.A. 2 1960). The word "may" is insufficient to condition the operation of the court determination sentence of § 2(d) on a preliminary finding of no likelihood of confusion by the Commissioner pursuant to the first sentence of the proviso. There are other obvious reasons for using "may." The Trademark Act contains many conditions on registration, other than no likelihood of confusion, which it is the Commissioner's duty to enforce. Courts may very well determine rights to use "marks" which are not technically trademarks, which fall into categories denied registration by the statute, which may be open to others than the parties to use, and in all cases every applicant to register must comply with all of the procedural requirements of the Patent and Trademark Office as set forth in statute and rules before the Commissioner is compelled to register. "May" is a very appropriate word in view of these considerations. We also note its use in the first sentence of the § 2(d) proviso where the requirement that the Commissioner find confusion, etc., to be "not likely" is found.
As we did in Dunhill, and for similar reasons, we find Applicant is entitled to a restricted registration wherein the "conditions and limitations" required by § 2(d) reasonably correspond to the final judgment of the Fourth Circuit court. In paragraph 4, the judgment gives Applicant "the right to continue using the name Holiday Inn within the town of Myrtle Beach, South
We note, sua sponte, paragraph 1(e) of the judgment, supra, which prohibits Applicant from using "any indication that the defendant name is registered in the United States Patent Office," an appropriate injunction so long as it is not registered. We see no reason why, upon the issuance of a registration, Applicant should not be relieved of that disability, if appropriate action is taken.
For the foregoing and other reasons to be found in our Dunhill opinion, the decision of the TTAB refusing registration to Applicant is reversed.
Restriction of the Chain's Registrations
Registrations 592,539, 592,540, and 592,541 are now unrestricted, but the TTAB decision would limit them to exclude Myrtle Beach, South Carolina. This was error. Nationwide Mutual Insurance Co. v. Securance Service, Inc., 147 U.S.P.Q. 258 (TTAB 1965), cited by the board, is not in point. Each of the marks of said registrations is in a particular design form which Applicant is enjoined from using. There is, therefore, no right in anyone who is adverse to the Chain to use those particular marks, even in Myrtle Beach. The TTAB relied on § 7(b) of the Trademark Act (15 U.S.C. § 1057(b)), particularly the provision that a certificate of registration is prima facie evidence of registrant's "exclusive right to use the mark," in holding that Applicant's "superior right" (in Myrtle Beach) is "inconsistent" with the registrations. We do not agree.
Section 7(b) does not grant a positive right to use the registered mark; the Trademark Act does not give to the federal government power to grant positive rights to use marks and § 7(b) should not be so read. Under § 7(b), a certificate of registration is no more than prima facie evidence, and evidence only of an exclusive right, which right (as in the case of patents) means a right to exclude others, not a positive right to use. Cf. § 33(a) (15 U.S.C. § 1115(a)).
The Chain further argues that "the involved registrations are valid and incontestable." "Incontestability" is provided for in § 15 (15 U.S.C. § 1065) of the Trademark Act. It says nothing about incontestability of registrations,
Under the law of South Carolina, Applicant acquired by use of HOLIDAY INN a right there in which would be infringed by the Chain's marks if the Chain used them in Myrtle Beach, and that right was acquired long before publication of the Chain's marks under the Act. Therefore, the Chain has no statutory incontestable rights under its registrations as against Applicant in Myrtle Beach.
The decision of the board imposing restrictions on the Chain's registrations is, therefore, reversed.
Reasons of Appeal
Applicant's Point IIB is that "Registrant [the Chain] is barred from contesting the Board's decision limiting its registration, by failing to propound `Reasons for Appeal' here." The Chain filed its notice of appeal with the Commissioner of Patents and Trademarks on August 7, 1975. January 2, 1975, the Trademark Act was amended by Public Law 93-600, 88 Stat. 1955, which so changed § 21(a)(2), (3), and (4) (15 U.S.C. § 1071) as to eliminate the requirement for reasons of appeal in trademark cases. Applicant's point is without foundation.
The decision of the TTAB is in all respects reversed and the case is remanded for further proceedings consistent herewith.
REVERSED AND REMANDED.
293 F.2d at 692, 49 CCPA at 739, 130 U.S.P.Q. at 418. The two judges who wrote concurring opinions (which are in reality dissents) were fully persuaded there would be confusion.
Even this text falls into the error of speaking of incontestable marks and registrations.