Court Opinion

ID: 8907130
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:58:37.346855+00
Date Added: 2024-06-11T17:08:17.570348
License: Public Domain

RICH, Judge.
This appeal is from the decision of the Patent and Trademark Office (PTO) Trademark Trial and Appeal Board (TTAB), 195 USPQ 578, modified, 196 USPQ 266 (1977), ordering cancellation of Registration No. 961,776, issued June 19, 1973, to .Selfway, Inc., for the service mark SELFWAY for automobile service station services. We affirm.
Summarizing the generally undisputed facts detailed in the opinion of the TTAB, 195 USPQ at 578-80, Travelers Petroleum, Inc. (Travelers), a South Carolina corporation, petitioned to cancel the aforementioned registration of Selfway, Inc., a Georgia corporation, on November 9, 1973, less than five months after its issuance. Travelers alleged and proved actual use of SELFWAY for self-service gasoline station services in South Carolina commencing on June 3,1971, nearly ten months prior to the proven first use of the mark by Selfway, Inc., in Louisiana on March 31, 1972. The asserted ground for cancellation was § 2(d) of the Trademark Act of 1946, as amended, hereinafter “Lanham Act,” (15 U.S.C. § 1052(d)).1 Likelihood of confusion arising from unrestricted simultaneous use of the mark not being seriously contested, the issue was reduced to priority of use, complicated somewhat by the preincorporation activities of the parties’ presidents, which we now relate.
From 1969 until March of 1971, both petitioner’s president, Mr. Brandt, and respondent’s president, Mr. Pesson, where employed by Tenneco Oil Company in the development of a self-service gasoline station business. While so employed, Pesson formulated plans to start a similar business of his own and, in connection therewith, prepared an investment brochure entitled “SelfWay Stations.” The brochure, introduced in evidence as Respondent’s Exhibit 1, characterizes itself as “a proposal for a company that will engage exclusively in the self-service gasoline business” and consists *78of 16 typewritten pages containing tables and charts illustrating the expected capital requirements and returns. The term “Self-Way” appears only on the title page, all subsequent references being to “the company.” Twenty copies of the brochure were given to various prospective investors.
Toward the end of 1970, Pesson disclosed his plans to Brandt. The latter was shown, but not given, a copy of the brochure. Brandt left Tenneco in early 1971, formed petitioner corporation, and commenced use of SELFWAY in South Carolina where all subsequent uses have occurred.
Pesson left Tenneco in early 1972, formed respondent corporation, and commenced use of SELFWAY in Louisiana in March of that year, later expanding on the wholesale level into Florida and Georgia. After respondent’s first use of the mark, Pesson heard rumors of Brandt’s activities in South Carolina, whereupon the registration in issue was sought and issued.
On the above facts, the TTAB ordered respondent’s territorially-unrestricted registration cancelled, holding that likelihood of confusion from contemporaneous use of the mark in the same geographic area had been conceded and that Travelers had proven prior service-mark usage of SELFWAY.
Respondent, appellant here, asserted before the TTAB, and reasserts here, three arguments for a contrary result, to wit:
(1) Pesson’s use of SELFWAY on the investment brochure was use “analogous” to service-mark usage which can be tacked on to respondent’s first actual use, thereby constituting Selfway, Inc., the prior user on this record;
(2) Failing argument (1), Brandt’s knowledge of Pesson’s activities and intentions with respect to SELFWAY equitably precludes a valid adoption of the mark by Travelers, again constituting Selfway, Inc., the prior user on this record; and
(3) Failing argument (2), respondent’s registration should have been ordered geographically restricted instead of cancelled in its entirety because petitioner’s rights in the mark are, at best, those of a concurrent user; in other words, respondent, as prior registrant, should be entitled to retain national registration rights except for areas where petitioner actually used the mark prior to issuance of the registration, i. e., South Carolina.
With respect to the first argument, the TTAB, citing two of its own precedents, found that Pesson’s brochure, being directed to prospective investors rather than prospective purchasers, and being preliminary even to the capitalization of the company, did not create any awareness of the SELF-WAY mark in relation to the business he hoped to establish or the services he hoped to render. As such, the use of SELFWAY on the brochure was held not to be use “analogous” to service-mark usage.
The TTAB disposed of the second argument by noting that Pesson’s disclosures to Brandt were unrestricted, as were the disclosures to other prospective investors, thereby precluding protection based on confidentiality of disclosure or trade secrecy. Further, no fiduciary relationship, e. g., employer-employee, was found to exist between the two men from which a legally cognizable impediment to Brandt’s appropriation of the SELFWAY mark might arise. In view of its disposition of respondent’s first argument, the TTAB concluded that petitioner’s adoption of SELFWAY had occurred at a time when respondent had not yet entered the field. Accordingly, the TTAB found that, in this case, there was no prior user of which petitioner could have had the requisite disabling knowledge, thereby distinguishing respondent’s cited authorities.
As to the third argument, the TTAB simply noted that the rights of the parties to concurrent use registrations were not properly in issue in a cancellation proceeding, such issues being properly resolved only in a concurrent use proceeding geared to developing the relevant evidence. In this regard, the TTAB relied upon this court’s decision in Hollowform, Inc. v. Delma Aeh, 515 F.2d 1174, 185 USPQ 790 (Cust. & Pat. App.1975).
*79OPINION
We are in general agreement with the manner in which the TTAB disposed of the three issues raised here on appeal in its ■published opinion and shall elaborate thereon, in varying degrees with respect to the three issues, only for purposes of clarification.
Appellant-respondent now relies on this court’s decision in Jim Dandy Co. v. Martha White Foods, Inc., 458 F.2d 1397, 59 CCPA 1016,173 USPQ 673 (1973) to support its first argument, that the brochure use was “analogous” to service-mark usage and can be tacked on to the first actual use. It is also alleged that the TTAB erred in failing to recognize that those to whom the brochure was shown, characterized in the opinion below as prospective investors, were also prospective customers. Even conceding the latter point, appellee-petitioner correctly points out that Jim Dandy involved a use in connection with an ongoing business. Assuming further, without so holding, that one may rely upon usage of a mark prior to the actual rendition of the services with which the mark ultimately becomes associated for purposes of establishing priority therein, such usage must have been of such a nature and extent as to create an association in the mind of the consuming public between he mark and the services to be rendered. Old Swiss House, Inc. v. Anheuser-Busch, Inc., 569 F.2d 1130, 196 USPQ 808 (Oust. & Pat.App.1978); Jim Dandy Co. v. Martha White Foods, Inc., supra. There was no direct evidence that the dissemination of the brochure had the requisite effect. The use of SELF WAY in the brochure was not so pervasive, nor was the circulation of the brochure so widespread, as to permit an inference of such an effect. We conclude, therefore, that the earliest date which respondent may be accorded for priority purposes is its date of actual first use — March 31, 1972.
On the issue of the effect of Brandt’s knowledge of Pesson’s intentions with respect to SELFWAY, argument (2), we agree with the TTAB’s conclusion that the disclosures were made neither in confidence nor in the course of a fiduciary relationship. Respondent has pointed to no other unfair competition theory under state law in accordance with which Travelers’ use of SELFWAY would have been unlawful, and we are aware of none. The law pertaining to registration of trademarks does not regulate all aspects of business morality. While adoption of a mark with knowledge of a prior actual user may give rise to cognizable equities as between the parties, see, e. g., United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141 (1918), and Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed.2d 713 (1916), appellant has cited no authority warranting recognition of similar equities based on knowledge of another’s intent to use. There being no prior user of SELFWAY, for reasons aforesaid, of which Travelers could have had notice, and Brandt’s activities appearing, from this record, to be otherwise lawful, we find Brandt’s knowledge of Pesson’s intentions to present no obstacle to Travelers’ adoption of SELFWAY.
Finally, with respect to appellant-respondent’s third argument challenging the propriety of cancelling vis-a-vis restricting the registration in issue, we are of the opinion that the board correctly ordered the registration cancelled. The registration was territorially unrestricted. Petitioner has satisfactorily proven a state of facts inconsistent with the lawful issuance of respondent’s registration and has done so within the time allowed by statute.2 Accordingly, petitioner is entitled to the resto*80ration of the status quo ante, that is, cancellation of the improvidently issued registration.
Appellant-respondent relies on a combination of statutory and case law in support of its contrary position. More specifically, § 18 of the Lanham Act3 is cited as express statutory authority for the relief sought, restriction instead of cancellation. In addition, appellant relies on statements in In re Beatrice Foods Co., 429 F.2d 466, 474, 57 CCPA 1302, 1311, 166 USPQ 431, 436-37, n. 13 (1970), to the effect that, in determining the rights of the parties to concurrent use registrations, early registration should be encouraged and rights in existing registrations should be recognized; that is to say, that a prior registrant may be entitled to national registration rights restricted only to allow for the actual area of use of a prior user. It is alleged that such considerations in this case justify the invocation of the alleged statutory authority of the Commissioner to restrict respondent’s registration, in place of its cancellation.
We consider, first, the statutory grant of powers to the Commissioner in § 18 as a whole, the meaning of that statute having been of continuing concern to this court. See, e. g., American Security Bank v. American Security and Trust Co., 571 F.2d 564, 197 USPQ 65 (Cust. & Pat.App. 1978); Giant Food, Inc. v. Malone & Hyde,
Inc., 522 F.2d 1386, 187 USPQ 374 (Cust. & Pat.App.1975); Hollowform, Inc. v. Delma Aeh, supra. Notwithstanding the analyses in the dissenting opinions in Hoilowform and herein to the contrary, by the very terms of § 18 the powers granted therein are grouped in accordance with the objects of their exercise, not the type of proceeding involved. Section 18 grants, inter alia, the power to “cancel” and the power to “restrict” “registration[s] of * * * registered mark[s].” Nothing is said about these powers being exercisable in a cancellation or any other type of proceeding. In fact, a registered mark may be involved in cancellation proceedings, interferences, and concurrent use proceedings. In order to determine which remedies are available in which proceedings, it is necessary to resort to §§ 2(d), 14, 16, 17, and 18 of the Lanham Act (15 U.S.C. §§ 1052(d), 1064, 1066, 1067, and 1068, respectively) dealing with the substance and procedure of these inter partes contests. Statutes in pari materia are to be construed together.
Considering, now, the individual powers granted in § 18, we construe “cancel” as necessarily meaning “cancel entirely” and as not including “partially cancel,” since to do otherwise would reduce the express grant of the power to “restrict” to the status of surplusage.4 We should not light*81ly attribute to Congress the use of surplus terms. So construed, the provision for cancellation proceedings in § 14 speaks only of complete cancellation, and it is reasonable to presume that the power to cancel granted in § 18 was intended to be exercised in a § 14 proceeding. Similarly, the only ways a registration can be “restricted” are by placing limitations on the description of the goods, the channels of trade, or the areas of use. We find this functional definition of the term “restrict” used in the § 2(d) proviso (note 6, infra) in reference to concurrent use proceedings, and it is reasonable to presume that the power to restrict granted in § 18 was intended to be exercised in a § 2(d) concurrent use proceeding.
Moreover, to logically justify relief in the form of “restriction” in any proceeding involving a registered mark, one must establish (1) that more than one person is entitled to use the mark and (2) that there would be no likelihood of confusion from the continued use of the mark under the conditions and limitations of the restriction.5 If the party antagonistic to the registration is not entitled to use the mark, no relief, let alone restriction, would be in order. Cf. Prince Dog and Cat Food Co. v. Central Nebraska Packing Co., 305 F.2d 904, 49 CCPA 1328, 134 USPQ 366 (1962). If both parties are entitled to use the mark but confusion would be likely regardless of adherence to restrictions in registrations thereof, the first sentence of § 2(d), note 1, supra, mandates that the registrant, if the junior user, is not entitled to maintain any registration, restricted or otherwise. By necessary implication, the registrant, if the senior user, must be entitled to maintain his registration in unrestricted form (absent an adjudication of the sort referred to in note 5, supra).
It is thus seen that the factual situation in which the Commissioner is empowered by § 18 to restrict a subsisting registration is exactly the situation detailed in the proviso in § 2(d) as forming the basis for a concurrent use proceeding.6 We conclude, therefore, that the most reasonable construction of § 18 is that the Commissioner may or may not cancel, that is, entirely eliminate, a subsisting registration in a cancellation proceeding instituted under § 14 and that the Commissioner may or may not restrict a subsisting registration involved in a concurrent use proceeding instituted under § 2(d).7 Restriction, however, is not, in *82our opinion, an appropriate alternative form of relief in a cancellation proceeding. Dicta in Prince Dog and Cat Food, supra, possibly to the contrary, must be regarded as without continuing vitality.
A consideration buttressing our conclusion involves the second prong of appellant-respondent’s argument — the public policy considerations noted in Beatrice Foods (footnote 13) of “rewarding” the first to register and of recognizing rights created by existing registrations. Section 14 does more than provide for cancellation proceedings. It places particular time limitations on some of the various bases upon which cancellation will be granted (remembering that “cancellation” connotes total removal), and in so doing, represents a congressional determination that in actions brought within the stated times, the rights created by the issued registrations are outweighed by the public interest in the removal of improvidently issued registrations. We cannot now say that the subsistence of appellant-respondent’s registration for some lesser period of time clothes respondent with some greater rights. We conclude that the considerations noted in Beatrice Foods simply are not relevant in a situation where complete cancellation is still available under § 14 and has been sought. To consider such rights and to allow restriction in lieu of cancellation, where available, would be to second guess the congressional determination that total cancellation should be available, based on § 2(d) grounds, for five years after issuance of the registration.
We are not unmindful of the hardships our holdings in Hollowform and this case may work on junior users with legitimate common law trademark rights. We are convinced, however, that the Lanham Act, in its present form, provides for only one inter partes procedure in the PTO where such concurrent rights may be adjudicated, and that is the concurrent use proceeding.
The decision of the TTAB is affirmed.

AFFIRMED.

. Section 2(d) reads, in pertinent part:
No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it—
jfs * * * * *
(d) Consists of or comprises a mark which so resembles a mark registered in the Patent and Trademark Office or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when applied to the goods of the applicant, to cause confusion, or to cause mistake, or to deceive * * *.

. Section 14 of the Lanham Act (15 U.S.C. § 1064) reads, in pertinent part:
A verified petition to cancel a registered mark, stating the grounds relied upon, may, upon payment of the prescribed fee, be filed by any person who believes that he is or will be damaged by the registration of a mark on the principal register established by this Act, or under the Act of March 3, 1881, or the Act of February 20, 1905—
(a) within five years from the date of the registration of the mark under this Act; or ;H * sfc * ^ *
*80(c) at any time if the registered mark becomes the common descriptive name of an article or substance, or has been abandoned, or its registration was obtained fraudulently, or contrary to the provisions of section 4 or of subsection (a), (b), or (c) of section 2 of this Act for a registration hereunder, or contrary to similar prohibitory provisions of said prior Acts for a registration thereunder, or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services in connection with which the mark is used * * *.

. Section 18 (15 U.S.C. § 1068) reads:
In such proceedings [interference § 16, opposition § 13, concurrent use application § 2(d), and cancellation § 14; see § 17 for direct antecedent] the Commissioner may refuse to register the opposed mark, may cancel or restrict the registration of a registered mark, or may refuse to register any or all of several interfering marks, or may register the mark or marks for the person or persons entitled thereto, as the rights of the parties hereunder may be established in the proceedings: Provided, That in the case of the registration of any mark based on concurrent use, the Commissioner shall determine and fix the conditions and limitations provided for in subsection (d) of section 2 of this Act. [First emphasis ours.]

. But see, Stanspec Co. v. American Chain & Cable Co., 531 F.2d 563, 566, 189 USPQ 420, 423, n. 9 (Cust. & Pat.App. 1976), noting, without approving, a prior TTAB practice of “partially” cancelling a registration. In this regard, we note that § 37 of the Lanham Act (15 U.S.C. § 1119) uses the phrase “cancellation * * * in whole or in part” in reference to remedies available in a court of general jurisdiction. This must be regarded either as another example of the differences between proceedings in the PTO and in the courts, see note'5, infra, or as imprecise drafting. ,. ,>

. We do not here consider the situation, not presented by the facts of this case, where the respective rights of the parties to use the mark have been adjudicated by a court of competent jurisdiction. In such a situation, “restriction” may well be available, in an appropriate proceeding, notwithstanding likelihood of confusion. See Holiday Inn v. Holiday Inns, Inc., 534 F.2d 312, 189 USPQ 630 (Cust. & Pat.App. 1976); Alfred Dunhill of London, Inc. v. Dunhill Tailored Clothes, Inc., 293 F.2d 685, 49 CCPA 730, 130 USPQ 412 (1961).
Such a prior adjudication clearly may be noticed in subsequent PTO proceedings involving the same parties, because the parties will be bound by the earlier result in their continuing relations. In this context, this court’s consideration in Dunhill of the adjudicated concurrent rights of the parties in resolving the merits of an opposition proceeding is entirely consistent with our holding herein.

. The proviso in § 2(d) reads, in pertinent part: Provided, That when the Commissioner determines that confusion, mistake, or deception is not likely to result from the continued use by more than one person of the same or similar marks under conditions and limitations as to the mode or place of use of the marks or the goods in connection with which such marks are used, concurrent registrations may be issued to such persons when they have become entitled to use such marks as a result of their concurrent lawful use in commerce * * *. Concurrent registrations may also be issued by the Commissioner when a court of competent jurisdiction has finally determined that more than one person is entitled to use the same or similar marks in commerce. In issuing concurrent registrations, the Commissioner shall prescribe conditions and limitations as to the mode or place of use of the mark or the goods in connection with which such mark is registered to the respective persons * * *.

. Having set out to construe all relevant sections of the statute together, a word should be said about § 16 (15 U.S.C. § 1066) dealing with interferences. The PTO construction of § 16 embodied in 37 CFR 2.97 is to the effect that the validity of an involved registration may be challenged in such a proceeding only by affirmative claim for cancellation. Such a construction seems reasonable, not contrary to law, and consistent with our analysis. The facts of this *82case do not require consideration of the circumstances under which an application involved in an interference may be amended or otherwise converted to a concurrent use application.