Does the market you choose to sell your products limit your right to a trademark? EXCELLED v. OREGON BREWING

A trademark is something that consumers associate with the manufacturer of a product. Traditionally a trademark is thought of as a symbol, word or phrase, but anything that signals to consumers the identity of the manufacturer of a product can be eligible for trademark protection. In the United States trademark rights are derived from the use of the trademark in commerce. A trademark can be registered with the United States Patent and Trademark Office to strengthen the rights associated with the trademark but registration is not necessary for the trademark user to be granted a claim to the trademark.

The first person to use a trademark in commerce is considered the senior user of a trademark. People who subsequently use a trademark are considered junior users. A senior user has priority over junior users of a trademark. With respect to trademark registration in the United States, filing a trademark application gives the applicant a solid claim to a trademark, but registration does not negate priority. A senior trademark user can claim priority to a trademark by introducing evidence of earlier use in commerce. The question then becomes, can a senior user claim priority to a trademark in a marketplace that the senior user was not actively selling trademarked products?

EXCELLED SHEEPSKIN & LEATHER COAT CORP., v. OREGON BREWING CO., 16‐3602‐cv (2nd. Cir 2018) is a case where a junior user sought to exclude a senior user from using a trademark in certain marketplaces.

Defendant is a commercial brewery, which sells beer under the brand name ROGUE nationwide. Since 1989, Defendant has also used the ROGUE brand on clothing, such as t‐shirts, sweatshirts, hats, and similar apparel. Plaintiff is an apparel company. In 2000, it began to use ROGUE as a brand on leather coats and jackets. In 2009, Plaintiff began to use ROGUE, in department stores and stores that sell only clothing (“clothing‐only stores”), on the same categories of apparel that Defendant had long marketed under ROGUE.

In 2004 and 2005 respectively, Plaintiff and Defendant both applied to the USPTO to register the mark ROGUE. After the USPTO expressed concern about a likelihood of confusion from both parties’ uses of the mark, Plaintiff and Defendant entered into a Settlement and Trademark Consent Agreement requiring each to delete certain items of clothing from their pending applications. Defendant further narrowed its application to goods “sold primarily in the trademark owner’s brewpubs and web site.”

Plaintiff sued Defendant in 2012 alleging trademark infringement based on Defendant’s sale of ROGUE‐branded apparel in department and clothing‐only stores beginning in 2011. Defendant counterclaimed in 2012 alleging trademark infringement by Plaintiff and sought cancellation of four of Plaintiff’s federal trademark registrations on the theory of fraud on the trademark office.

The district court granted summary judgement in favor of Plaintiff on trademark infringement and dismissed Defendant’s counterclaims. The district court reasoned that Plaintiff’s use in clothing‐only stores gave it priority despite Defendant’s prior use. Further the district court held that Plaintiff’s prior registration of its ROGUE trademark was established despite Defendant’s prior use, and that Defendant had forfeited its claims through laches by delaying in filing suit. The Defendant appealed this decision to the Court of Appeals for the Second Circuit.

In its decision The Second Circuit noted that trademark rights are acquired by use and maintained by an intention to continue using a trademark. First use of a trademark does not give the owner exclusive rights over the trademark with respect to all products and services across all markets, however trademark law does not limit the owner’s trademark rights to the types of stores in which it has sold, leaving the mark up for grabs in any other type of store. The Second Circuit found that the case did not involve Defendant using the ROGUE trademark in product categories in which Plaintiff had established priority. Defendant’s claim to the trademark was not barred by laches because Defendant had been pursuing its trademark rights through negotiations without undue delay. Based on this the Second Circuit reversed the district court’s dismissal of Defendant’s trademark infringement counterclaims and remanded for further proceedings.

The Second Circuit also held that as a matter of law Plaintiff could not prevail on its trademark infringement claims because Defendant had established it was the senior user of the Rouge trademark, the type of stores in which Defendant chose to sell its products did not change this fact. Therefore the district court’s grant of summary judgement for Plaintiff was vacated.

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