IP Tech Knowledgy

Federal trademark registration provides nationwide protection to the owner -- with a hidden limitation.  While registration of a mark at the US Patent and Trademark Office provides the registrant with the potential for nationwide rights, the registrant can only exercise those rights in territories where it actually operates, or has definitive plans to operate.  Trademark infringement is based on likelihood of consumer confusion.  Entities must be known by consumers in the same territory for there to be confusion.  So, a registrant cannot impose its priority granted through a registration until the registrant is offering goods or services in the territory where the infringer operates.  If the alleged infringer is in a distant area where the registrant does not reach, the infringer can use the Dawn Donut Rule (decided 65 years ago this month) to block any claim.  However, once an owner begins operating in the region where the infringer has been operating, and so long as the owner’s priority date of its registration predates the infringers first use, the owner then can successfully assert its registration and stop the infringement.  

The Dawn Donut Rule requires proceeding cautiously.  A registrant should make sure it is operating, or has definitive plans to operate, in the same region as the infringer before writing a demand letter or filing suit.  A recipient of a demand letter or suit should consider if it has a valid defense that there is no overlapping territory.  A business running a clearance search should not be deterred by a registration if it believes the owner is far away and will never have overlapping consumers.  A trademark owner should realize the territorial limitation of its registration, but appreciate the benefit when its registration springs into effectiveness against a subsequent user when the owner expands into a new territory. 
  
Ned T. Himmelrich
410-576-4171 • nhimmelrich@gfrlaw. com