Selfway, Inc. v. Travelers Petroleum, Inc.

• Decision Date: 15 June 1978
• Docket Number: Appeal No. 77-609.
• Citation: 579 F.2d 75
• Parties: SELFWAY, INC., Appellant, v. TRAVELERS PETROLEUM, INC., Appellee.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

579 F.2d 75

SELFWAY, INC., Appellant, v. TRAVELERS PETROLEUM, INC., Appellee.

Appeal No. 77-609.

United States Court of Customs and Patent Appeals.

June 15, 1978.

COPYRIGHT MATERIAL OMITTED

Donald A. Kaul, Roylance, Abrams, Berdo & Kaul, Washington, D. C., attorneys of record, for appellant.

Cort R. Flint, Bailey, Dority & Flint, Greenville, S. C., attorneys of record, for appellee.

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

RICH, Judge.

This appeal is from the decision of the Patent and Trademark Office (PTO) Trademark Trial and Appeal Board (TTAB), 195 USPQ 578, modified, 196 USPQ 266 (1977), ordering cancellation of Registration No. 961,776, issued June 19, 1973, to Selfway, Inc., for the service mark SELFWAY for automobile service station services. We affirm.

Summarizing the generally undisputed facts detailed in the opinion of the TTAB, 195 USPQ at 578-80, Travelers Petroleum, Inc. (Travelers), a South Carolina corporation, petitioned to cancel the aforementioned registration of Selfway, Inc., a Georgia corporation, on November 9, 1973, less than five months after its issuance. Travelers alleged and proved actual use of SELFWAY for self-service gasoline station services in South Carolina commencing on June 3, 1971, nearly ten months prior to the proven first use of the mark by Selfway, Inc., in Louisiana on March 31, 1972. The asserted ground for cancellation was § 2(d) of the Trademark Act of 1946, as amended, hereinafter "Lanham Act," (15 U.S.C. § 1052(d)).¹ Likelihood of confusion arising from unrestricted simultaneous use of the mark not being seriously contested, the issue was reduced to priority of use, complicated somewhat by the preincorporation activities of the parties' presidents, which we now relate.

From 1969 until March of 1971, both petitioner's president, Mr. Brandt, and respondent's president, Mr. Pesson, where employed by Tenneco Oil Company in the development of a self-service gasoline station business. While so employed, Pesson formulated plans to start a similar business of his own and, in connection therewith, prepared an investment brochure entitled "SelfWay Stations." The brochure, introduced in evidence as Respondent's Exhibit 1, characterizes itself as "a proposal for a company that will engage exclusively in the self-service gasoline business" and consists of 16 typewritten pages containing tables and charts illustrating the expected capital requirements and returns. The term "SelfWay" appears only on the title page, all subsequent references being to "the company." Twenty copies of the brochure were given to various prospective investors.

Toward the end of 1970, Pesson disclosed his plans to Brandt. The latter was shown, but not given, a copy of the brochure. Brandt left Tenneco in early 1971, formed petitioner corporation, and commenced use of SELFWAY in South Carolina where all subsequent uses have occurred.

Pesson left Tenneco in early 1972, formed respondent corporation, and commenced use of SELFWAY in Louisiana in March of that year, later expanding on the wholesale level into Florida and Georgia. After respondent's first use of the mark, Pesson heard rumors of Brandt's activities in South Carolina, whereupon the registration in issue was sought and issued.

On the above facts, the TTAB ordered respondent's territorially-unrestricted registration cancelled, holding that likelihood of confusion from contemporaneous use of the mark in the same geographic area had been conceded and that Travelers had proven prior service-mark usage of SELFWAY.

Respondent, appellant here, asserted before the TTAB, and reasserts here, three arguments for a contrary result, to wit:

(1) Pesson's use of SELFWAY on the investment brochure was use "analogous" to service-mark usage which can be tacked on to respondent's first actual use, thereby constituting Selfway, Inc., the prior user on this record;

(2) Failing argument (1), Brandt's knowledge of Pesson's activities and intentions with respect to SELFWAY equitably precludes a valid adoption of the mark by Travelers, again constituting Selfway, Inc., the prior user on this record; and

(3) Failing argument (2), respondent's registration should have been ordered geographically restricted instead of cancelled in its entirety because petitioner's rights in the mark are, at best, those of a concurrent user; in other words, respondent, as prior registrant, should be entitled to retain national registration rights except for areas where petitioner actually used the mark prior to issuance of the registration, i. e., South Carolina.

With respect to the first argument, the TTAB, citing two of its own precedents, found that Pesson's brochure, being directed to prospective investors rather than prospective purchasers, and being preliminary even to the capitalization of the company, did not create any awareness of the SELFWAY mark in relation to the business he hoped to establish or the services he hoped to render. As such, the use of SELFWAY on the brochure was held not to be use "analogous" to service-mark usage.

The TTAB disposed of the second argument by noting that Pesson's disclosures to Brandt were unrestricted, as were the disclosures to other prospective investors, thereby precluding protection based on confidentiality of disclosure or trade secrecy. Further, no fiduciary relationship, e. g., employer-employee, was found to exist between the two men from which a legally cognizable impediment to Brandt's appropriation of the SELFWAY mark might arise. In view of its disposition of respondent's first argument, the TTAB concluded that petitioner's adoption of SELFWAY had occurred at a time when respondent had not yet entered the field. Accordingly, the TTAB found that, in this case, there was no prior user of which petitioner could have had the requisite disabling knowledge, thereby distinguishing respondent's cited authorities.

As to the third argument, the TTAB simply noted that the rights of the parties to concurrent use registrations were not properly in issue in a cancellation proceeding, such issues being properly resolved only in a concurrent use proceeding geared to developing the relevant evidence. In this regard, the TTAB relied upon this court's decision in Hollowform, Inc. v. Delma Aeh, 515 F.2d 1174, 185 USPQ 790 (Cust. & Pat.App.1975).

OPINION

We are in general agreement with the manner in which the TTAB disposed of the three issues raised here on appeal in its published opinion and shall elaborate thereon, in varying degrees with respect to the three issues, only for purposes of clarification.

Appellant-respondent now relies on this court's decision in Jim Dandy Co. v. Martha White Foods, Inc., 458 F.2d 1397, 59 CCPA 1016, 173 USPQ 673 (1973) to support its first argument, that the brochure use was "analogous" to service-mark usage and can be tacked on to the first actual use. It is also alleged that the TTAB erred in failing to recognize that those to whom the brochure was shown, characterized in the opinion below as prospective investors, were also prospective customers. Even conceding the latter point, appellee-petitioner correctly points out that Jim Dandy involved a use in connection with an ongoing business. Assuming further, without so holding, that one may rely upon usage of a mark prior to the actual rendition of the services with which the mark ultimately becomes associated for purposes of establishing priority therein, such usage must have been of such a nature and extent as to create an association in the mind of the consuming public between he mark and the services to be rendered. Old Swiss House, Inc. v. Anheuser-Busch, Inc., 569 F.2d 1130, 196 USPQ 808 (Cust. & Pat.App.1978); Jim Dandy Co. v. Martha White Foods, Inc., supra. There was no direct evidence that the dissemination of the brochure had the requisite effect. The use of SELFWAY in the brochure was not so pervasive, nor was the circulation of the brochure so widespread, as to permit an inference of such an effect. We conclude, therefore, that the earliest date which respondent may be accorded for priority purposes is its date of actual first use—March 31, 1972.

On the issue of the effect of Brandt's knowledge of Pesson's intentions with respect to SELFWAY, argument (2), we agree with the TTAB's conclusion that the disclosures were made neither in confidence nor in the course of a fiduciary relationship. Respondent has pointed to no other unfair competition theory under state law in accordance with which Travelers' use of SELFWAY would have been unlawful, and we are aware of none. The law pertaining to registration of trademarks does not regulate all aspects of business morality. While adoption of a mark with knowledge of a prior actual user may give rise to cognizable equities as between the parties, see, e. g., United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141 (1918), and Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed.2d 713 (1916), appellant has cited no authority warranting recognition of similar equities based on knowledge of another's intent to use. There being no prior user of SELFWAY, for reasons aforesaid, of which Travelers could have had notice, and Brandt's activities appearing, from this record, to be otherwise lawful, we find Brandt's knowledge of Pesson's intentions to present no obstacle to Travelers' adoption of SELFWAY.

Finally, with respect to appellant-respondent's third argument challenging the propriety of cancelling vis-a-vis restricting the registration in issue, we are of the opinion that the board correctly ordered the registration cancelled. The registration was territorially unrestricted. Petitioner has satisfactorily proven a state of facts inconsistent with the lawful issuance of respondent's registration and has done so within the time allowed by statute.² Accordingly, petitioner is entitled to the restoration of the status...