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Trademark Owners May Play Only Zone Defense at the TTAB
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In a precedential decision invoking the “zone of natural expansion” doctrine, on March 19, 2025, the Federal Circuit upheld a decision by the U.S. Trademark Trial and Appeal Board (TTAB) cancelling in part registrations for MONEY MART for pawn brokerage and pawn shop services despite the registrant’s first use of the mark for potentially related services. Dollar Financial Group, Inc. v. Brittex Financial, Inc., No. 2023-1375 (Fed. Cir. Mar. 19, 2025).
The registrant, Dollar Financial Group, Inc., (DFG) was the first to use MONEY MART for various loan and check cashing services. Brittex Financial, Inc., (BFI) was the first to use MONEY MART PAWN for pawn brokerage and pawn shop services. After BFI began its use of the mark, DFG registered MONEY MART for loan services, check cashing, pawn brokerage, and pawn shop services. BFI, relying on its common law prior use rights, sought to delete pawn brokerage and pawn shop services from DFG’s trademark registrations. The TTAB initially found in favor of DFG on the theory that loan financing services encompass pawn services. That decision was reversed on appeal for lack of substantial evidence. On remand to the TTAB, DFG argued that pawn brokerage and pawn shop services were within the “zone of natural expansion” of its loan and check cashing services, and that it therefore had priority and was entitled to its registrations.
Under the zone of natural expansion doctrine, the first user of a trademark has superior rights against subsequent users for any goods or services that consumers might reasonably expect to emanate from it in the normal expansion of its business under the mark. Because trademark law is focused on protecting consumers’ reasonable expectations as to source, the zone of natural expansion doctrine alone adds little to the underlying question of whether parties’ goods and services are sufficiently related such that consumers are likely to be confused. But for DFG, the doctrine at least gave it another theory to argue on remand to the TTAB.
Both the TTAB and Federal Circuit found that DFG could not rely on the zone of natural expansion doctrine, holding that the doctrine cannot be used “offensively” to establish priority over BFI’s first use for pawn brokerage and pawn shop services (even though DFG was defending its registrations). The “offensive vs. defensive” distinction in use of the doctrine can be confusing. As the Federal Circuit has explained, “defensive use of the doctrine would allow the senior user to prevent the junior user’s registration of a similar mark on logically related goods. But the doctrine does not give the senior user offensive use, which would be the right to register a mark on an expanded line of goods where the use of the mark covered by such registration would lead to a likelihood of confusion. . . . DFG cannot use the zone of natural expansion doctrine offensively to defeat [BFI’s] intervening rights. . . because that would essentially grant DFG the right to register its mark on a line of expanded goods, even though it would likely cause confusion with [BFI’s] established common law rights.”
Takeaway(s)
The potential problem with denying offensive use of the zone of natural expansion doctrine is that it may deny the senior user the right to register its mark for an expanded line of goods where the junior user is the one causing the likelihood of confusion and has no intervening rights. The ultimate question of “who do consumers expect the goods to come from” is not even raised under the doctrine when the senior user is attempting to rely on it to establish priority and register the mark for “logically related” goods. The rationale for allowing defensive use of the doctrine to go on the offensive as a plaintiff to prevent registration to the junior user but denying offensive use to defend an existing registration for the senior user — when the facts regarding the relatedness of the parties’ goods and corresponding consumer confusion are the same — is largely left unexplained. Nonetheless, for now it appears that playing “zone offense” at the TTAB will result in a “double technical foul” and ejection from the game.
The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.