Saturday, November 27, 2021

The CAFC does pawn shops in BRITTEX FINANCIAL, INC. v. DOLLAR FINANCIAL GROUP, INC

The outcome

The Trademark Trial and Appeal Board denied a petition to cancel two trademark registrations. Brittex Financial, Inc. v. Dollar Financial Group, Inc., Cancellation No. 92060888 (TTAB Sep. 30, 2020) (Board Op.). We reverse the Board’s priority determination, which formed the sole basis for its denial of the petition, and remand for further proceedings. I In March 2013, Dollar Financial Group filed two applications to register MONEY MART (one in standard characters, one with a design) as a trademark for several listed services, including “pawn brokerage and pawn shops.” See Board Op. at 1–2; J.A. 88, 218. Only the year before, i.e., 2012, had Dollar “beg[u]n offering pawn brokerage and pawn shop services to the public,” having “beg[u]n taking steps” to do so in 2010. Dollar Response Br. at 8–9; see Board Op. at 12. In May 2014, the Patent and Trademark Office (PTO) issued the requested Principal Register registrations—Nos. 4,524,540 and 4,532,073—under Lanham Act § 1(a), 15 U.S.C. § 1051(a).1

(...) The Board did not reach the natural-expansion issue (or the likely-confusion issue) because it found that pawn brokerage and pawn shop services are “covered or encompassed by loan financing.” The Board recited evidence that clearly establishes the fact that pawn brokerage and pawn shop services have two features: one is the making of collateralized loans; the second is the retail sale of the collateral when forfeited under the terms of the loan. Id. at 17– 23. The Board then reached its conclusion by introducing Dollar’s ’120 registration of MONEY MART for “loan financing” (from 2007) into the analysis, noting its incontestable and unchallenged character:

(...) More specifically still, the Board provided no support for its priority conclusion in the distinctive circumstance present here. The evidence makes clear that pawn brokerage and pawn shop services integrate two different components, only one of which can be labeled “loan financing”— the lending, but not the retail sale of collateral. If the Board is understood to have found as a factual matter that the entirety of this mixed-character business is “covered or encompassed by loan financing,” Board Op. at 17, that finding is unreasonable and therefore unsupported by substantial evidence. The Board invoked Dollar’s ’120 registration, with its express description “loan financing,” to fill the gap between its findings and the ultimate conclusion it reached. See id. at 23–24. But the Board set forth no basis on which that registration supplies an answer to the question presented in this case—which is whether two different, later registrations of Dollar’s are invalid under § 2(d) because they expressly cover services as to which Brittex, not Dollar, was first to use the mark being registered (or one so resembling it so that confusion is likely).

AND

That is enough to reject Dollar’s cross-appeal challenge. The Morehouse defense, we have said, “require[s] that the prior and proposed marks be essentially the same,” i.e., “legal equivalents.” O-M Bread, 65 F.3d at 938, 939. The Board reasonably determined that Brittex challenged the registrations at issue for, among other things, services related to, e.g., prepaid debit cards, gift cards, and gold and silver, that are not “essentially the same” as loan financing services. Id. Although the Board struck the defense sua sponte, Dollar has shown no prejudicial error from that process given the substantive inapplicability of the Morehouse defense.

(...) For the forgoing reasons, we reverse the Board’s priority determination (and therefore its denial of the petition for cancellation) and remand for further proceedings consistent with this opinion.

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