How an unregistered trademark might cancel a registered trademark in the United States

Dollar Financial Group, Inc. vs. Brittex Financial, Inc.

Dollar Financial Group ("DFG") owned two registered trademarks (the "Earlier Marks") for “MONEY MART ” for goods/services relating to its loan financing businesses, claiming first use of the Earlier Marks in 1984.

In 2012, DFG expanded its use of MONEY MART into pawn brokerage and pawn shop services. In 2013, it filed two U.S. trademark applications that included “pawn brokerage and pawn shops” among the listed services (these were not included in the Earlier Marks), and both applications matured to registration in 2014 (the "Later Marks").

In the 1990s, Brittex began using the marks “MONEY MART PAWN” and “MONEY MART PAWN & JEWELRY” for pawn services, but never registered them.

Cancellation Proceedings

Brittex petitioned to cancel DFG’s Later Marks, asserting that it had made prior use of the MONEY MART mark for pawn services and arguing that the Later Marks would likely cause consumer confusion.

The Trademark Trial and Appeal Board initially denied the cancellation petition, ruling that DFG had priority in the MONEY MART mark based on its earlier use in loan financing, which the Board believed encompassed pawn services. On appeal, the Federal Circuit reversed the decision and remanded the case, holding that loan financing pertained only to the lending aspect of pawn services, not the collateral retail function.

On remand, the Board determined that Brittex had priority as the first to use MONEY MART PAWN and MONEY MART PAWN & JEWELRY for pawn services, and that DFG’s subsequent use would likely cause confusion. The Board therefore partially granted the cancellation petition, ordering the deletion of “pawn brokerage and pawn shops” from DFG’s Later Marks.

Appeal

DFG appealed the Board’s decision. The Federal Circuit addressed two primary issues on appeal.

1. Priority

DFG argued that pawn services represented a natural expansion of its loan financing business, and thus, under the natural expansion doctrine, its priority in loan financing extended to pawn services.

The court rejected this argument, ruling that the natural expansion doctrine was a defensive principle that permitted a senior user to block a junior user’s registration on related goods, but did not grant an offensive right to expand into new goods and services. Thus, DFG could not invoke the doctrine to assert priority over Brittex’s earlier use of the “MONEY MART” marks in connection with pawn services.

2. Likelihood of Confusion

The Federal Circuit analyzed the multi-factor test set forth in In re E.I. DuPont DeNemours & Co., 476 F.2d 1357 (C.C.P.A. 1973) in assessing the likelihood of confusion between the Later Marks of DFG and Brittex’s unregistered marks. In particular, the court evaluated five disputed factors, including the following:

• Regarding the factor assessing the variety of goods or services associated with a mark, DFG claimed the Board erred by not fully considering the range of services it offered under the MONEY MART marks. However, the Federal Circuit affirmed the Board, clarifying that the inquiry centered on whether Brittex’s prior use would cause consumers to believe that DFG’s later services were associated with Brittex, not vice versa.
• In terms of DFG’s right to exclude Brittex from using the disputed marks on pawn services, even though DFG had acquired two registrations for the MONEY MART trademarks, the court affirmed the Board, concluding that DFG did not have a right to exclude because Brittex had acquired intervening rights on the marks for pawn services based on prior use.
• Regarding the factor concerning other probative facts, the court rejected Brittex’s bad faith claim, noting that mere awareness of a prior mark did not alone imply bad faith. It also dismissed DFG’s argument that its incontestable 1980s registrations for MONEY MART reduced confusion, reasoning that those registrations did not cover pawn services.

In conclusion, the Federal Circuit affirmed that Brittex had priority in connection with pawn services over the Later Marks and DFG’s use was likely to cause confusion, leading to the cancellation of DFG’s Later Marks for the conflicting services.

Comments

This case underscores the critical importance of actual trademark use in the United States.

Filing first with the USPTO does not always guarantee priority—being the first user does. Here, Brittex’s earlier use of the MONEY MART mark in pawn services prevailed over DFG’s earlier filing when determining priority.

Furthermore, prior use of an unregistered mark may establish intervening common law rights, which could be factored into the likelihood of confusion analysis to counteract a registered trademark’s right to exclude.  As demonstrated in the present case, the court considered that Brittex had developed valuable intervening rights through its use of marks for pawn services despite it never having registered them, which could negate DFG’s right to exclude as granted by its two later registered trademarks.

To secure robust trademark rights in the United States, it is essential to move quickly both in commerce and in filing with the USPTO.