Court Opinion

ID: 989269
Source: CourtListenerOpinion
Date Created: 2013-07-03 23:04:19.252412+00
Date Added: 2024-06-11T09:11:21.800476
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MAID TO PERFECTION CORPORATION,
Plaintiff-Appellant,

v.
                                                               No. 95-1226
MICHELLE HYMAN; MAID TO
PERFECTION, INCORPORATED,
Defendants-Appellees.

MAID TO PERFECTION CORPORATION,
Plaintiff-Appellee,

v.
                                                               No. 95-1227
MICHELLE HYMAN; MAID TO
PERFECTION, INCORPORATED,
Defendants-Appellants.

Appeals from the United States District Court
for the Eastern District of Virginia, at Alexandria.
T. S. Ellis, III, District Judge.
(CA-94-624)

Argued: March 4, 1996

Decided: May 6, 1996

Before HAMILTON, WILLIAMS, and MICHAEL, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: Vincent Mark Amberly, NATH, AMBERLY & ASSO-
CIATES, Washington, D.C., for Appellant. Joel S. Aronson, OBER,
KALER, GRIMES & SHRIVER, P.C., Washington, D.C., for Appel-
lees. ON BRIEF: Sam J. Alberts, OBER, KALER, GRIMES &
SHRIVER, P.C., Washington, D.C., for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

This case concerns the territorial rights, under the Lanham Act, 15
U.S.C. § 1051 et seq., of two businesses that provide cleaning ser-
vices and operate under the mark MAID TO PERFECTION.

I

The senior user, Maid to Perfection Incorporated (MTPI), is a Vir-
ginia corporation that has been performing residential and commercial
cleaning services in Northern Virginia under the mark MAID TO
PERFECTION since August 1990. The junior user, Maid to Perfec-
tion Corporation (MTPC), has been performing residential and com-
mercial cleaning services in Maryland and elsewhere under the mark
MAID TO PERFECTION since September 1990.

On October 1, 1990, MTPC filed an intent to use application for
use of the mark MAID TO PERFECTION with the Patent and Trade-
mark Office, and the registration was issued on May 12, 1992. As of
May 12, 1992, the date the mark was issued to MTPC, MTPI was
doing business in Fairfax County (twenty-eight customers), Prince
William County (eight customers), Arlington County (two custom-
ers), and the City of Alexandria (four customers), and maintained an

                    2
office in Prince William County.* MTPI was not conducting business
in Loudoun and Fauquier Counties and had no customers in the cities
of Manassas or Manassas Park.

In April 1992, MTPC's office received two telephone calls regard-
ing interest in franchises in Virginia. As MTPC did not then and does
not now have any franchises in Virginia, MTPC called Virginia tele-
phone information and obtained the telephone number of MTPI. An
employee of MTPC then called MTPI and learned that its business
was a cleaning service.

MTPC then filed this action in the United States District Court for
the Eastern District of Virginia against MTPI and MTPI's chief oper-
ating officer, Michelle Hyman, alleging federal trademark infringe-
ment under the Lanham Act, 15 U.S.C. § 1051 et seq., of its federally
registered mark MAID TO PERFECTION. MTPC also sought a
declaratory judgment as to the scope of MTPI's trading area in the
Commonwealth of Virginia. After holding an evidentiary hearing, the
district court found that MTPI, as the senior user of the mark MAID
TO PERFECTION, was entitled to operate, under the doctrines of
prior use and the zone of natural expansion, in the areas that it was
operating in as of May 12, 1992, the date of MTPC's federal registra-
tion, and the areas into which it was likely to expand. Applying these
principles, the district court found that MTPI was entitled to operate
maid services and advertise under the MAID TO PERFECTION mark
throughout Fairfax County, Arlington County, Prince William County
(with the exception of the City of Manassas and the City of Manassas
Park), the City of Alexandria, and the City of Falls Church and per-
manently enjoined MTPC from using the MAID TO PERFECTION
mark in these areas. The district court further found that MTPC, as
the junior user/federal registrant, was entitled to operate maid services
and advertise under the MAID TO PERFECTION mark in all other
areas, including Loudoun County, Stafford County, Fauquier County,
the City of Manassas and the City of Manassas Park. Both MTPC and
MTPI appeal from the district court's judgment.
_________________________________________________________________
*From the end of 1990 until May 12, 1992, MTPI's business had more
than doubled in size--from approximately twenty customers at the end
of 1990 to over forty as of May 12, 1992.

                    3
II

The parties attack the district court's judgment on several fronts,
and we shall address these contentions in turn.

A

MTPC contends that the district court erred in applying the doc-
trine of the zone of natural expansion to determine the territorial
rights of MTPI. This argument has no merit.

Under the Lanham Act, any mark that has not achieved incontest-
ible status, as the mark in this case, is subject to"any legal or equita-
ble defense or defect, including those set forth in subsection (b) of
this section, which might have been asserted if such mark had not
been registered." 15 U.S.C. § 1115(a). If the mark in this case was not
registered, the territorial rights of the parties would be governed by
the common law. At common law, the territorial extent of the use of
a mark was "restricted to the locality where the mark [was] used and
to the area of probable expansion." Spartan Food Sys., Inc. v. HFS
Corp., 813 F.2d 1279, 1282 (4th Cir. 1987); see also Food Fair
Stores, Inc. v. Lakeland Grocery Corp., 301 F.2d 156, 161 (4th Cir.)
("It has been generally recognized . . . that an established trade name
is entitled to protection not only in the area in which it already renders
service or sells goods but also in areas to which its trade may reason-
ably be expected to expand."), cert. denied , 371 U.S. 817 (1962).
Because at common law MTPI's territorial rights included its area of
use and zone of natural expansion, the district court correctly applied
the zone of natural expansion to this case.

B

The district court found that MTPI was entitled to operate under
the MAID TO PERFECTION mark throughout Fairfax County,
Arlington County, Prince William County (with the exception of the
City of Manassas and the City of Manassas Park), the City of Alexan-
dria, and the City of Falls Church and permanently enjoined MTPC
from using the MAID TO PERFECTION mark in these areas. The
district court further ordered that MTPC was entitled to operate under

                     4
the MAID TO PERFECTION mark in all other areas, including Lou-
doun County, Stafford County, Fauquier County, the City of Manas-
sas, and the City of Manassas Park. On appeal, MTPC contends that
MTPI's trading area is too large and MTPI contends its trading area
is too small.

Under the zone of natural expansion test, to determine whether an
area falls within a user's area of exclusive use we look to the party's:
"(1) previous business activity; (2) previous expansion or lack
thereof; (3) dominance of contiguous areas; (4) presently-planned
expansion; and, where applicable (5) possible market penetration by
means of products brought in from other areas." Spartan, 813 F.2d at
1283 (citation and internal quotes omitted).

Under this test, we believe the district court correctly established
the territorial rights of the parties. First, MTPI has operated success-
fully since August 1990 and has continuously expanded since that
date. Second, as of the date of MTPC's federal registration (May 12,
1992), the date which the parties conceded at oral argument was the
critical date for establishing the parties' territorial rights, MTPI's
business had more than doubled in size--from approximately twenty
customers at the end of 1990 to over forty as of May 12, 1992. Third,
there was evidence that MTPI, as of May 12, 1992, intended to
expand. And although MTPI was not dominant in contiguous areas,
we cannot say, under these circumstances, that the district court erred
in establishing the territorial rights of the parties.

C

In a counterclaim, MTPI requested an order directing the Patent
and Trademark Office to issue a concurrent registration to MTPI in
its market area. See 15 U.S.C. §§ 1052(d) and 1119. At this point, we
are not in a position to review this claim as the district court never
addressed the issue. However, the district court's failure to address
this issue is understandable because MTPI never raised this issue dur-
ing the district court's evidentiary hearing. If MTPI had a problem
with the district court's failure to address this issue, it should have
brought the matter to the attention of the district court. In light of
MTPI's failure to sufficiently develop this issue below, we decline to
address it.

                     5
III

Accordingly, for reasons stated herein, the judgment of the district
court is affirmed.

AFFIRMED

                    6