Brittex Financial v. Dollar Financial (Fed. Cir. 2021)
This is a trademark case. Dollar Financial holds registered trademarks for MONEY MART – the name it uses for its payday and title loan venders as well as pawn shops and pawn brokerages. The company had been using the name for several years in the payday loan business, and in 2012 expanded into pawn shops and then filed for registration for that usage in 2013. The USPTO then granted the registrations associated with the new uses.
Brittex had been using its own version of the mark on its south-Texas pawn shops since the early 1990s: MONEY MART PAWN. In 2015, Brittex petitioned for cancellation of the mark based upon the likelihood of confusion between the two marks. In particular, Section 2(d) of the Lanham Act bars registration of a mark that:
so resembles . . . a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive.
15 U.S.C. § 1052(d).
There is no question that these marks are confusing vis-à-vis one another. They are virtually identical and associated with identical services.
The dispute in the case is about priority. Dollar was the first user of the mark, albeit only in the payday loan and loan financing sphere. Dollar holds an incontestable mark in that area. On the other hand, Brittex was the first to use the mark in the pawn business.
In its decision, the TTAB sided with Dollar — holding that pawn shop services are “covered or encompassed by loan financing.” The Board reasoned that a major aspect of the pawn business is making collateralized loans. That expansive reading of financial services meant that Dollar’s prior use and registration served as direct priority for the new pawn-shop registrations.
On appeal, the Federal Circuit rejected the TTAB’s conclusions — holding that the TTAB went too far in creating new law. In particular, the court found that the registration of a mark generally covering a broad category (genus) of uses did not necessarily establish priority over a specific (species) use covered by the broad category. The TTAB provided no “sound legal basis” for a conclusion “that a registrant has priority as to a specific service it was second to offer just because it was first to offer a different specific service that is a species of a genus that covers both specific services.” Further, even if a genus does provide coverage, that does not necessarily mean that the genus holder has rights to register a specific species over a competitor’s prior use.
The court also rejected the Board’s factual finding of overlap. While there certainly is some overlap, the court found no support for complete overlap — that all pawn shop business is a form of loan financing.
On remand, Dollar might still win the case based upon a separate argument not yet decided by the TTAB. In particular, there is a separate doctrine of “natural expansion” that can also permit a priority claim for an earlier similar use.