Holiday Inn v. Holiday Inns, Inc., Patent Appeal No. 76-546

• Decision Date: 08 July 1976
• Docket Number: 76-547.,Patent Appeal No. 76-546
• Citation: 534 F.2d 312
• Parties: HOLIDAY INN, Appellant, v. HOLIDAY INNS, INC., Appellee. HOLIDAY INNS, INC., Appellant, v. HOLIDAY INN, Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

534 F.2d 312

HOLIDAY INN, Appellant, v. HOLIDAY INNS, INC., Appellee.

HOLIDAY INNS, INC., Appellant, v. HOLIDAY INN, Appellee.

Patent Appeal Nos. 76-546, 76-547.

United States Court of Customs and Patent Appeals.

May 6, 1976.

Rehearing Denied July 8, 1976.

COPYRIGHT MATERIAL OMITTED

Stephen B. Judlowe, Roy C. Hopgood, Hopgood, Calimafde, Kalil, Blaustein & Lieberman, New York City, attys. of record, for appellant, cross-appellee.

James L. Kurtz, Washington, D. C., atty. of record, for appellee, cross-appellant.

Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.

RICH, Judge.

These are cross appeals from a decision of the Patent and Trademark Office (PTO) Trademark Trial and Appeal Board (TTAB), 188 U.S.P.Q. 471 (1975), in a concurrent use proceeding, No. 350.¹ In No. 76-546, applicant Holiday Inn appeals from the TTAB's refusal to register the word mark HOLIDAY INN to it. In No. 76-547, Holiday Inns, Inc., appeals from the TTAB's imposition of restrictions on its three registrations² of "Holiday Inn" in various design forms, hereinafter described. We reverse.

Here involved is litigation between the parties to this proceeding in the United States District Court for the District of South Carolina, Florence Division, Holiday Inns. Inc. v. Holiday Inn, 364 F.Supp. 775, 177 U.S.P.Q. 640 (1973), affirmed on the District Court opinion, 498 F.2d 1397, 182 U.S.P.Q. 129 (CA4 1974). This concurrent use proceeding was suspended during the pendency of that litigation, and the TTAB rendered its decision after its conclusion. Familiarity with the opinions in the litigation and with the opinion of the TTAB is assumed. The TTAB rested its decision on the facts as found in the Fourth Circuit litigation. We deem them to be controlling here.

Although there are nominally two appeals before us, they are taken from a single decision of the TTAB. Inherently, however, a concurrent use proceeding involves an adjudication of the rights of two parties. This proceeding was commenced by the filing of an application by Holiday Inn (a corporation), appellant and cross-appellee, to register HOLIDAY INN, application serial No. 367,335, filed August 6, 1970, as a service mark for "motel services, namely, providing lodgings, refreshments and meals in a motel." The application has always been for a territorially restricted registration. As amended, the restriction is "for the area of repute comprising Myrtle Beach, South Carolina." The application as filed explained that the reason for asking for a restricted registration was applicant's understanding that outside of the named "area of repute" Holiday Inns of America, Inc., or its licensees or franchisees, had been providing motel services under the mark HOLIDAY INN, since 1952 but subsequent to applicant's first use in 1949. Knowledge of the aforesaid registrations to Holiday Inns of America (now Holiday Inns, Inc.) was recited.

The application for the restricted registration was ultimately passed to publication on October 4, 1971, "subject to a Concurrent Use Proceeding with" the aforesaid three registrations. January 20, 1972, the PTO sent out a concurrent use letter and instituted the concurrent use proceeding. February 25, 1972, Holiday Inns, Inc., moved to stay the proceeding in view of the litigation in the federal court in South Carolina, as well as other litigation in a county court in that state. The motion was granted without objection. In September 1974 the PTO was advised of the outcome of the litigation, and on October 25 the TTAB revived the concurrent use proceeding by issuing an order to show cause why the applicant should not be granted a concurrent use registration as requested and why the three registrations of Holiday Inns, Inc., "should not be limited so as to exclude the area comprising Myrtle Beach, South Carolina." Holiday Inns, Inc., responded with an extensive memorandum opposing both of the TTAB's suggestions. Applicant filed a response saying it saw no reason why it should not be granted its restricted registration "for what a court of competent jurisdiction has finally determined to be the prior user's * * * lawful right." Interestingly, it said nothing about the restriction proposed for the registrations of Holiday Inns, Inc. Thereafter the TTAB rendered the decision from which this appeal was taken, refusing applicant's registration and restricting the issued registrations.

To avoid confusion, we shall hereinafter refer to Holiday Inn as the "Applicant" and to Holiday Inns, Inc., as the "Chain."

The facts determinative of this appeal which were established, as between the parties, in the aforesaid Fourth Circuit litigation, are the following. Applicant, through its predecessors in business, was the first user of HOLIDAY INN for motel services, its use being solely in connection with its motel in Myrtle Beach, which use began in 1949. Commencing in 1952, the Chain acquired trademark rights in "Holiday Inn" and procured the aforesaid three registrations, each depicting the mark in a distinctive form, as shown below, the drawing of Reg. 592,541 being in the amended form, in accordance with an amendment filed May 27, 1975. That particular registration was referred to in the litigation as the "great sign."

The Chain, owning or franchising about 1,300 facilities in the United States, has been adjudged entitled to the exclusive use of these trademarks throughout the United States, and these registrations are presently unrestricted. Applicant's application concedes this, except for Myrtle Beach. As to this area of Applicant's "repute," however, Applicant is under an injunction resulting from the Fourth Circuit litigation which reads:

1. The defendant Applicant, its officers, agents, servants, employees and attorneys and all those persons in active concert or participation therewith, who receive actual notice hereof, are hereby perpetually enjoined and restrained from:

(a) Using either directly or indirectly a script identical to or any colorable imitation of plaintiff's script Holiday Inn on the outside of its building, on any billboards or on any advertising material.

(b) Using directly or indirectly its version of plaintiff's "great sign" or any colorable imitation thereof.

* * * * * *

(d) Using directly or indirectly any sign, script, slogan or star design, color combination or other indicia of plaintiff that suggests or tends to suggest a connection with the plaintiff.

(e) Using directly or indirectly any indication that the defendant name is registered in the United States Patent Office.

(f) Directly or indirectly infringing United States Patent Office registered numbers 592,535 592,539; 593,540 592,540; 592,541; 708,521 and 740,362.³

(g) Directly or indirectly committing any act divesting or attending attempting to divest the plaintiff of the good will it has in its registered marks on or any act which encroaches upon the good will that the plaintiff has acquired in its registered marks.⁴

Also relevant here is the following paragraph from the final judgment:

4. The defendant Applicant has the right to continue using the name Holiday Inn within the town of Myrtle Beach, South Carolina, and in order to protect the public from unnecessary confusion the court finds that the defendant Strand a Chain franchisee must continue to operate its Myrtle Beach, South Carolina facilities under the name of Holiday Lodge and Holiday Downtown, however, it may continue to operate its North Myrtle Beach, South Carolina facility under the name of Holiday Inn and plaintiff the Chain may continue to operate Holiday Inn Trav-L-Park under its existing name. Strand may continue to use Holiday Inn and Holiday Inn ® on towels, sheets, blankets, etc., and other items used inside the Myrtle Beach, South Carolina, facilities.

Applicant's Right to Registration

The TTAB refused to grant Applicant a restricted registration of the mark HOLIDAY INN because of (a) its belief that § 2(d) "permits the issuance of concurrent registrations only when confusion, mistake, or deception is not likely" and (b) its opinion that, under the factual situation of this case, "the inevitable result is and will be one of confusion * * *." On point (a), it cited our decision in In re Beatrice Foods Co., 429 F.2d 466, 57 CCPA 1302, 166 U.S.P.Q. 431 (1970).

Upon review of our opinion in Beatrice, we note that the case had nothing to do with a situation in which the respective rights of the parties to a concurrent use proceeding had been settled by a court decision. Beatrice involved two applicants who had reached agreement on territorial rights, and the problems we had to solve all arose from the refusal of the then Patent Office to recognize the rights agreed upon. What we there said about likelihood of confusion had validity in the situation then before us and still has validity in similar situations; but we were not there discussing a situation like the present one or even that part of the statute which controls here.

More in point on the present fact situation is Alfred Dunhill of London, Inc. v. Dunhill Tailored Clothes, Inc., 293 F.2d 685, 49 CCPA 730, 130 U.S.P.Q. 412 (1961), cert. denied, 369 U.S. 864, 82 S.Ct. 1030, 8 L.Ed.2d 84 (1962), wherein, as here, a final court judgment had determined the respective rights of the parties to use marks including "Dunhill." As our opinion points out, it had also been determined by the court that confusion of the public had resulted from concurrent use of "Dunhill" by both parties. Nevertheless, because of an estoppel situation, the New York court had determined that the applicant had a right to continuing use of "Dunhill" notwithstanding the registrant-opposer's rights—and notwithstanding the possibility of public confusion. In its judgment, which included an injunction, and with a view to minimizing, but not necessarily eliminating, confusion, the court spelled out just how the applicant could use "Dunhill" and on what goods. The...