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Judge slams jailhouse door. What R bad boys gonna do?

Scott J. Slavick

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As I've noted previously in this space, a concurrent use registration is a federal trademark registration of the same trademark to two or more unrelated parties, each having its registration limited to use in a distinct geographic area.

A party can receive such a registration by filing a concurrent use application or converting an existing application to a concurrent use application, and then prevailing in a concurrent use proceeding before the Trademark Trial and Appeal Board.

An applicant can file for concurrent use with respect to a trademark already registered or otherwise in use by another party. The application can also go forward based on the assertion that the existing use can co-exist with the new use without causing consumer confusion. Importantly, a concurrent use application may not be filed based on a party's intent to use a mark; it must rely on actual use in commerce.

Perhaps the most notable instance of a continuing concurrent use registration is that of Holiday Inn. Although the national chain owns numerous trademark registrations, one registration for an unrelated "Holiday Inn," restricted to the area comprising the town of Myrtle Beach, South Carolina, does exist. A Myrtle Beach hotel had used the Holiday Inn name since the 1940s, and initiated a concurrent use proceeding in 1970. While this proceeding was pending, the national Holiday Inn chain commenced an action in US district court, and while this federal case was pending, the concurrent use proceeding was suspended.

The Holiday Inn chain lost. In 1973, the district court's judgment authorized the Myrtle Beach hotel to use a distinctive, non-infringing Holiday Inn service mark—notably, though, only within the Town of Myrtle Beach. The concurrent use proceeding resumed, and in 1976, the Myrtle Beach hotel was awarded a federal trademark registration for its mark.

The Lanham Act effectively places three requirements on marks for which a later applicant seeks a concurrent use registration. First, the later (junior) applicant must have used the mark in commerce prior to the time that the earlier (senior) registrant filed its application for registration, unless the latter consents to the junior user's registration. Second, the later applicant's use in commerce must have been lawful. Third, concurrent use of the marks may not result in a likelihood of confusion.

Any party may voluntarily limit the geographic scope of its application while conceding the rights of another party and its mark in one or more different geographic territories. By the terms of the Act, the critical dates with respect to concurrent registration are the date of the applicant's first use and the earliest filing date of any other registrant.

All this preamble brings us to the Bad Boys—that is, to Bad Boys Bail Bonds, Inc. v. William Lee Yowell (Concurrent Use No. 94002552), in which the applicant had sought to register its name and its design mark for bail bond services, advertising and marketing services, and various ancillary goods. (Note: Do not overlook the importance of the word design as referenced above. It plays a large role in the case's outcome.)

Bad Boys' application was rejected as likely to cause confusion with the previously registered Bad Boyz Bail Bonds “In Bail, We Jail” mark for providing bail bonds for persons under arrest in the state of Missouri. So, Bad Boys amended its application to seek a concurrent use registration, claiming priority of use of its own mark in California, Arizona, and Nevada. The application was published for opposition, and after the opposition period closed without challenge, the Board instituted the concurrent use proceeding.

As a condition precedent to issuance of a concurrent use registration, as referenced above, the applicant must prove use of its mark in commerce prior to the filing date of the application underlying the defendant's registration.

Bad Boys claimed a first-use date of August 28, 1998, more than a year before defendant Yowell's filing date of December 29, 1999. Yowell moved for summary judgment, however, asserting that Bad Boys' first use of its applied-for mark did not occur prior to that critical date. Yowell's motion was based upon several documents that Bad Boys had provided during settlement discussions between the two entities.

Bad Boys had provided the disputed documents to Yowell in an attempt to prove that Bad Boys had used its Bad Boys Bail Bonds and design mark prior to the filing date of Yowell's registration. Yowell, in his motion for summary judgment, asserted that the disputed documents did not in fact show use of the applied-for mark, but only the literal portion of the mark, and that Bad Boys had failed to provide any additional documents when asked.

Bad Boys objected to the admission of these documents under Federal Rule of Evidence 408(a), asserting that they constituted statements made during settlement negotiations. The Board, however, overruled the objection, holding that the disputed documents existed independently of the discussions and did not include any statements made during the settlement discussions.

Bad Boys then argued that the design element of its mark was irrelevant, since the refusal to register in view of Yowell's mark had been based only on the word portion of Bad Boys' applied-for mark. The Board, however, pointed out that the mark at issue in this proceeding contains both words and a distinctive design—of an inmate appearing to bend the bars of his jail cell (presumably to get out!). The submissions by Yowell established a prima facie case that Bad Boys did not use the applied-for mark prior to the critical date, and Bad Boys had failed to provide evidence rebutting Yowell's assertion. The Board therefore considered it undisputed that Bad Boys did not use the applied-for mark prior to the critical date.

Finding no genuine issue of material fact, the Board granted the motion for summary judgment. On August 21, in a precedential ruling, the TTAB dissolved the concurrent use proceeding because Bad Boys failed to prove that its use of its applied-for service mark had commenced before the filing date of the application underlying the defendant's registration.

As I remarked when I wrote about concurrent use before, allowing these types of registrations seem anachronistic—a vestigial wrinkle in the fabric of trademark law from a time before the Internet made global sales simple and global brands so valuable.

So, the question arises: Are concurrent use cases on their way out? Historically, any such cases arose only because of geographic differences: users of a mark in one remote part of the country negotiated with users in another. Before the advent of the Web, the possibility of a party—say, Sunny Farms Fruit—using a mark in good faith in Washington State without knowing about another party using the same name in Florida were real. Now, a quick Google search up-ends this.

Can one really be said to have no idea of remote geographic users, when two or more similar businesses and/or domain names show up in search results right next to each other?


Reprinted with permission from the January 4, 2016 edition of Inside Counsel© 2016 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.

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