Technology Information Law Blog by Charles Gideon Korrell

In Dollar Financial Group, Inc. v. Brittex Financial, Inc., the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (TTAB) partial cancellation of two MONEY MART trademark registrations, addressing critical issues in trademark law, including priority of use, the likelihood of confusion, and the limitations of the zone of natural expansion doctrine. This case highlights key legal principles that businesses should consider when expanding the scope of their trademarks.

Background of the Case

Dollar Financial Group, Inc. (DFG) has operated loan financing and check cashing services under the MONEY MART mark since the 1980s. In 2013, DFG registered two trademarks covering pawn brokerage and pawn shop services. Brittex Financial, Inc., which had used MONEY MART PAWN and MONEY MART PAWN & JEWELRY since 1993 for pawn services, petitioned to cancel DFG’s registrations, arguing that they created a likelihood of confusion under the Lanham Act § 2(d).

The TTAB initially ruled in favor of DFG, holding that its longstanding use of MONEY MART for loan financing encompassed pawn services. However, the Federal Circuit reversed and remanded, leading the TTAB to ultimately rule that Brittex had priority. DFG appealed the TTAB’s decision, arguing that it was entitled to priority based on the zone of natural expansion and that the Board improperly found a likelihood of confusion.

Key Legal Issues and the Court’s Analysis

1. Priority of Use in Trademark Law

Trademark rights are fundamentally based on first use in commerce. While DFG argued that its use of MONEY MART for loan financing should establish priority over Brittex’s pawn shop services, the Federal Circuit disagreed.

The court reaffirmed that priority is determined based on the specific goods or services for which the mark was first used. Since Brittex had been using MONEY MART PAWN for pawn services since 1993, while DFG only expanded into pawn services in 2012, Brittex’s common law rights took precedence.

2. The Zone of Natural Expansion Doctrine: A Defensive, Not Offensive, Shield

One of DFG’s key arguments was that pawn brokerage and pawn shop services were a natural expansion of its existing loan financing services. However, the Federal Circuit rejected this argument, emphasizing that the zone of natural expansion is a purely defensive doctrine that cannot be used offensively to retroactively establish priority.

To support its ruling, the CAFC cited several key cases:

• Jackes-Evans Manufacturing Co. v. Jaybee Manufacturing Corp., 481 F.2d 1342 (C.C.P.A. 1973)
  • This landmark case established that the zone of natural expansion doctrine is defensive only. It prevents a junior user from claiming a mark in a related field but does not allow a senior user to retroactively claim priority over an intervening user.
  • Applying Jackes-Evans, the CAFC ruled that DFG could not override Brittex’s prior use of MONEY MART PAWN simply by claiming pawn services were a natural extension of its loan financing business.
• Orange Bang, Inc. v. Ole Mexican Foods, Inc., 116 U.S.P.Q.2d 1102 (T.T.A.B. 2015)
  • This TTAB decision reinforced that the first user of a mark has superior rights over later users expanding into related areas. However, if an intervening user has already established rights in the new area, the original owner cannot retroactively claim priority.
  • The CAFC applied this principle to reject DFG’s argument that its long-standing MONEY MART registration for loan financing should allow it to later claim priority for pawn services.
• American Hygienic Laboratories, Inc. v. Tiffany & Co., 12 U.S.P.Q.2d 1979 (T.T.A.B. 1989)
  • In this case, Tiffany & Co.’s trademark for jewelry did not give it priority over another company’s use of “TIFFANY” for cosmetics.
  • The Federal Circuit used this precedent to reject DFG’s claim that its existing MONEY MART registrations automatically extended to pawn services.

3. Likelihood of Confusion Under the DuPont Factors

The CAFC upheld the TTAB’s finding that DFG’s trademarks posed a likelihood of confusion with Brittex’s common law marks. The court applied the DuPont factors, emphasizing:

• Similarity of the Marks: The court found that MONEY MART and MONEY MART PAWN were highly similar, especially since the term “pawn” was descriptive.
• Overlap in Services and Trade Channels: Both parties offered pawn-related financial services, targeting similar consumers.
• Brittex’s Prior Use: Since Brittex had been using its mark for pawn services since 1993, DFG’s later use in 2012 did not override Brittex’s priority.

DFG also argued that its prior incontestable registrations for loan financing should have been considered. However, the CAFC distinguished the case from In re Strategic Partners, Inc., explaining that DFG’s earlier registrations did not cover pawn services and were therefore irrelevant.

Final Takeaways

The Federal Circuit’s decision in this case provides critical lessons for businesses navigating trademark expansion:

1. First Use in Commerce Controls – Priority is based on actual use for specific goods/services, not potential expansion.
2. The Zone of Natural Expansion is Defensive – This doctrine cannot be used offensively to claim priority over an intervening user.
3. Likelihood of Confusion is Key – Even long-standing brands can face cancellation if they expand into areas where others have prior rights.
4. Proactive Trademark Registration is Essential – To avoid legal disputes, businesses should register trademarks for all anticipated services early.

For businesses looking to expand their trademarks into new markets, this case underscores the importance of conducting thorough clearance searches and filing trademark applications early.

By Charles Gideon Korrell