The term "unlawful use" appeared in passing in a more recent case, Gray. Gray v. Daffy Dan's Bargaintown, 823 F.2d 522, 526 (Fed. Cir. 1987) (referencing in dictum the general principle that a registrant needed to show "lawful use in commerce"). Gray, however, did not involve an alleged unlawful use and thus did not present the appropriate occasion for this court to address the doctrine.
Midland correctly states that in order to obtain rights in the Quick-Phos trademark, United needed to show the name was lawfully used in commerce. See 15 U.S.C. § 1127; Gray v. Daffy Dan's Bargaintown, 823 F.2d 522, 526 (Fed. Cir. 1987); The Clorox Co. v. Armour-Dial, Inc., 214 U.S.P.Q. 850, 851 (TTAB 1982) ("`use in commerce' means a `lawful use in commerce'"). Midland then makes the utterly unsupportable claim that because United did not own the Quick-Phos registration with the Environmental Protection Agency, and thus could not sell Quick-Phos in the United States without a domestic registrant, United could not show prior lawful use in commerce.
15 U.S.C. § 1052(d) (1982) (emphasis supplied).Gray v. Daffy Dan's Bargaintown, 823 F.2d 522, 526, 3 USPQ2d 1306, 1308 (Fed. Cir. 1987). Action has alleged use of its mark prior to Labor's July 21, 1982, application filing date.
The flaw in UHL's argument is that UHL's use and registration would not be coincidental if UHL secured a registration for ULTRACASHMERE alone. UHL is absolutely prohibited by a district court injunction from using ULTRACASHMERE alone as a mark for fabrics. As a mark for fabrics, ULTRACASHMERE has been held to indicate Springs Mills as the source of the goods bearing UHL's asserted mark. Indeed, UHL has been held liable in damages to Springs Mills for its acts of infringement from that use. While the Second Circuit courts have acted, in their judgment, to protect the public from confusion, nothing in those rulings entitles UHL to obtain a registration based on its unlawful use of ULTRACASHMERE as a mark. See Lanham Act §§ 2(d), 23, 15 U.S.C. § 1052(d), 1091 (1982); see also Gray v. Daffy Dan's Bargaintown, 823 F.2d 522, 526, 3 USPQ2d 1306, 1308 (Fed. Cir. 1987) ("A valid application cannot be filed at all for registration of a mark without `lawful use in commerce,' . . ."). UHL concludes its brief with the proposal that "if this Court believes it necessary, [UHL] has no objections to a reversal with instructions to the TTAB to issue a restricted registration incorporating the District Court's limited injunction."
Dessert Beauty, Inc. v. Fox, 617 F. Supp. 2d 185, 190 (S.D.N.Y. 2007), aff'd, 329 F. App'x 333 (2d Cir. 2009). See, e.g., CreAgri, Inc. v. USANA Health Sciences, Inc., 474 F.3d 626, 630 (9th Cir. 2007); United Phosphorus, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219, 1225 (10th Cir. 2000); Gray v. Daffy Dan's Bargaintown, 823 F.2d 522, 526 (Fed. Cir. 1987). See, e.g., Davidoff Extension S.A. v. Davidoff Intern., Inc., 612 F. Supp. 4, 7 (S.D. Fla. 1984) (holding that defendants failed to meet their burden of showing plaintiff unlawfully used the Davidoff mark in the sale of cigars by illegally selling cigars containing Cuban tobacco in the US); see also Kratom Lab, Inc. v. Mancini, No. 11-80987-CIV, 2013 WL 3927838, at *3-5 (S.D. Fla. July 29, 2013) (finding plaintiff had no valid trademark in "Mr.
Based on this duty to avoid confusion that is explicitly stated in the 1990 and 1995 Agreements, the only possible meaning of "concurrent rights" is that Fudpucker's has exclusive rights to the Destin-Fort Walton Beach area. Any other interpretation would permit Fuddruckers to enter into the geographic area already inhabited by Fudpucker's and introduce confusion into the marketplace, an act clearly prohibited by the 1990 and 1995 Agreements. The major purpose of the Agreements was to protect the parties' respective territories. Plaintiffs rely on Gray v. Daffy Dan's Bargaintown, 823 F.2d 522 (Fed. Cir. 1987) to support their conclusion that Defendants may not obtain concurrent use rights by private agreement. Plaintiffs' reliance on Gray is misplaced. First, Gray was concerned with a party's entitlement to a concurrent use registration, not with the validity of a private settlement agreement between the parties.
This section of the Lanham Act supplements the rights of the parties at common law and combines to protect the continued use of a mark by concurrent users under specified statutory conditions, making available to each of the parties the benefits of federal registration statutorily available to a single registrant: the right to sue in Federal Court ( 15 U.S.C. § 1121); and the evidentiary presumption of validity ( 15 U.S.C. § 1057(b)); ( 15 U.S.C. § 1115), among others. In re Beatrice Foods Co., 429 F.2d 466, 472 (C.C.P.A. 1970); see also Gray v. Daffy Dan's Bargaintown, 823 F.2d 522, 525-526 (Fed. Cir. 1987); Weiner King, Inc. v. Wiener King Corp., 615 F.2d 512 (C.C.P.A. 1980); and Holiday Inn v. Holiday Inns, Inc., 534 F.2d 312 (C.C.P.A. 1976), which discuss section 2(d) in different contexts. The leading case of Beatrice Foods may have represented the first opportunity for a court to pass upon concurrent use proceedings under Section 2(d). Commenting on the policy underlying the statute, the court stated: