A Hypothetical
A and B do not know each other. A has been operating a pizza shop called “XYZ Pizza” in New Jersey for 20 years, while B started operating “XYZ Pizza” in Texas five years ago. B successfully registered his trademark four years ago.
One year ago, while considering expanding into Florida, A discovered that the shop’s exact trademark had been registered under the name of B’s business. Neither A nor B have ever sold pizza in Florida or served customers from Florida.
Can A continue using his trademark without infringing on any trademarks? And can he use his own trademark when expanding into Florida?
Senior User and Junior User
In trademark law, A, who used the trademark first, is known as the “senior user,” while B, who began using it later, is called the “junior user.”
The Junior User’s Registration Freezes the Geographic Scope of the Senior User’s Common Law Rights
Generally, the junior user’s registration does not affect the senior user’s pre-existing rights over an unregistered trademark. However, once the junior user registers the trademark, the senior user can no longer use his trademark in regions where he was not previously active.
Some federal courts, including those in New Jersey, allow limited rights for senior users to expand if there is evidence that such expansion was expected before the junior user’s registration. Factors include geographical distance from existing businesses, nature of business, market penetration, and history of expansion.
Analysis
Returning to the hypothetical above, A has been using the trademark for 20 years, making him the senior user. However, since B registered the trademark first, A can no longer expand and can only use the trademark in the regions where it was already in use.
Even if some federal courts recognize the senior user’s limited right to expand, A has not expanded his business for 20 years, and Florida is far from his original location. Since A has never sold pizza in Florida nor served customers from Florida, it is highly likely that he cannot use his trademark there.
While it is not impossible for A to use his trademark in Florida with additional measures, such as trademark cancellation, it would be costly and time-consuming. Had A registered its trademark before B, it would have been much easier for A to expand its business in Florida with the same trademark.
For more information about the benefits of registering a trademark, click here.
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