Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 TERRIFIC PROMOTIONS, INC.
VANLEX, INC., D.B.A. DOLLAR BILL'S
Concurrent Use No. 853
May 17, 1995
Date of original release: March 14, 1995
Before Rice, Hanak and Quinn
Administrative Trademark Judges
Opinion by Hanak
Administrative Trademark Judge
On May 2, 1988 concurrent use applicant Terrific Promotions, Inc. (hereinafter TPI) filed a territorially unrestricted application seeking to register DOLLAR BILLS and design in the form shown below for services which ultimately were described as "discount variety goods store services." TPI claimed that it first used the mark on November 15, 1986, and that it first used the mark in commerce on the same date. The application was assigned Serial No. 73/725,611 and it was ultimately published for opposition on February 28, 1989.
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
After receiving a sixty-day extension of time, excepted user Vanlex, Inc. (hereinafter Vanlex) filed on May 30, 1989 a notice of opposition to the application. Vanlex alleged that since 1978, it had used the service mark DOLLAR BILL'S in connection with a retail store located in New York City, and that TPI's use of the applied-for mark was likely to cause confusion. Vanlex did not contend then--and does not contend now--that it ever owned any registration for its DOLLAR BILL'S service mark.
On August 11, 1989 TPI filed its answer denying the salient allegations of the notice of opposition. Discovery then took place.
In January 1990 TPI moved to amend its application to one seeking a geographically restricted registration. In February 1990 Vanlex filed a brief in opposition to TPI's motion. TPI then advised the Board that, in view of Vanlex's objection, TPI was willing to accept judgment in the oppositon with respect to TPI's application for a geographically unrestricted registration.
In an order dated August 14, 1990 the Board entered judgment against TPI in the opposition with respect to TPI's application for a geographically unrestricted registration; accepted TPI's amendment to its application to convert it to one seeking a concurrent use registration for all of the United States except for the geographic territory consisting of Essex, Bergen and Hudson counties in New Jersey, the Boroughs of New York City and Suffolk, Nassau and Westchester counties in New York; instituted this Concurrent Use Proceeding No. 853 naming TPI as the applicant and Vanlex as the excepted user; and allowed Vanlex forty days in which to file an answer pursuant to Trademark Rule 2.99.
Thereafter, Vanlex submitted a statement in opposition to the concurrent use registration sought by TPI. Vanlex contended that TPI was not entitled to a concurrent use registration because (1) Vanlex "used its mark in interstate commerce before [TPI] adopted its mark"; because (2) TPI "was, or should have been, aware of [Vanlex's] adoption and use of the DOLLAR BILL'S mark in interstate commerce prior to [TPI's] adoption of the mark"; and because (3) "the marks of the respective parties are sufficiently dissimilar to preclude a concurrent use proceeding to be determined thereon, but not sufficiently dissimilar to avoid a conclusion of likelihood of confusion between the two marks." Furthermore, Vanlex contended that if a concurrent use registration were granted to TPI, then TPI's territory "should be limited to those discrete geographic areas in which [TPI] has conducted business directly, and the remainder of the United States should be reserved for [Vanlex] in view of [[[Vanlex's] status as the senior user of the mark." In addition, Vanlex contended that if Vanlex "is adjudged to be the junior user, then [Vanlex's] territory should be expanded beyond that cited in [TPI's] concurrent use application, to more accurately reflect [Vanlex's] trading area and areas of natural or projected expansion."
*2 This lengthy proceeding is now ready for judgment. Both parties have submitted extensive briefs and were represented by counsel at a hearing held before this Board on May 4, 1994.
The voluminous record in this case consists of, in part, the depositions (with exhibits) of Michael Neal Alper (president of TPI); Richard W. Kohn (a real estate consultant to TPI); Harold van Ommeren (director of real estate for TPI); Marcel Braha (executive vice president of Vanlex); and Louis Nachmias (general merchandise manager for Vanlex).
Despite the size of the record, many of the facts concerning the businesses of TPI and Vanlex are not in dispute. For example, at page 3 of its brief Vanlex states that it "does not contest TPI's recitation of facts with respect to its [TPI's] business (TPI's brief, pages 3-9)." Likewise, in its reply brief, TPI often agrees with Vanlex's description of "Vanlex's Business" set forth at pages 3-11 of Vanlex's brief. Indeed, in its reply brief TPI frequently relies upon statements taken from Vanlex's brief in support of TPI's arguments. [FN1]
In 1978 Vanlex opened its first (and now only DOLLAR BILL'S store near the main entrance to Grand Central Station in New York City. From 1978 to approximately 1988, Vanlex operated DOLLAR BILL'S as a mini-department store selling "very upscale" housewares, giftware, cosmetics, electronics, and watches, as well as men's and women's clothing. In 1989 Vanlex converted DOLLAR BILL'S from a mini-department store to one selling "off-price" but "very, very upscale" clothing. (Braha dep. 5-6, Vanlex brief p. 3-4). From approximately 1988 to early 1993, Vanlex operated a second store at 830 Third Avenue in New York City. For the first year or two, this store was operated under the MANIFESTO name (service mark). For the final three or four years before its closure, this second store was operated under the DOLLAR BILL'S name (service mark). (Braha dep. 7-8).
Mr. Braha has testified that DOLLAR BILL'S is "the most unique store in the world." (Braha dep. 9). Its uniqueness stems from the fact that it sells only the very finest clothing at deeply discounted prices on a regular, everyday basis. The men's and women's clothing sold by Vanlex at its DOLLAR BILL'S store include such famous designer labels as Armani, Ferre, Zegna, Montana, Principe and Lancio. Mr. Braha gave an example of a Zegna suit that retails, at a minimum, at other stores for $1,300 to $1,800 being sold at DOLLAR BILL'S for $499. According to Mr. Braha, it took "a very, very long time" for Vanlex to develop the type of business that is the essence of DOLLAR BILL'S operation. (Braha dep. 13). Vanlex had to earn the trust of these high fashion designers by demonstrating to them that Vanlex would never advertise their particular designer names. This policy of not advertising the brand names of the clothing being sold at DOLLAR BILL'S assured the designers that not only would their images not be tarnished, but in addition, their sales of identical clothing at more conventional stores such as Saks Fifth Avenue, Bergdorf Goodman and Neiman Marcus would not be diminished. In short, by strictly adhering to a policy of never advertising the particular brands of clothing that it offered for sale, DOLLAR BILL'S evolved into a very unique store in that its entire inventory consists of very upscale designer merchandise sold at deeply discounted prices, as compared to other stores that have, at most, only a few pieces of a particular designers product at discounted prices. Indeed, in its DOLLAR BILL'S store, Vanlex has prominent signs which read, in part, as follows: "Notice ... No picture taking ... We absolutely don't allow any print, radio, t.v. or advertising media to reveal designer names carried by this store." (Opposer's exhibit 218).
*3 Because of the uniqueness of DOLLAR BILL'S operation, it would not be possible for Vanlex to open up large numbers of DOLLAR BILL'S stores. In the past, Vanlex considered opening a DOLLAR BILL'S store in Scarsdale, New York, but that never came to pass. Mr. Braha testified in August 1993 that Vanlex was in the process of considering building a DOLLAR BILL'S store in Pittsburgh, Pennsylvania, but that Vanlex was "still undecided" as to whether to expand it to Pittsburgh. (Braha dep. 27). Vanlex did have prepared architectural drawings for a DOLLAR BILL'S store in the Gulf Building in Pittsburgh. (Vanlex exhibit 202).
While Vanlex has never advertised the brand names of the clothing it carries, Vanlex has advertised its DOLLAR BILL'S store in New York City newspapers and radio stations. In addition, DOLLAR BILL'S has received brief mention in an inflight airline magazine and in the May 6, 1991 issue of New York magazine which discusses numerous discount clothing stores. Mr. Braha testified that DOLLAR BILL'S "really attracts a very intelligent customer that comes in and wants to have good fashion at a discount." According to Mr. Braha, the customers at DOLLAR BILL'S represent a cross-section including young executives, doctors, lawyers and even very wealthy people. (Braha dep. 18).
In contrast to the lack of expansion by Vanlex of its DOLLAR BILL'S store, TPI has dramatically expanded the number of discount variety stores which it operates under the service mark DOLLAR BILLS and design. TPI opened its first DOLLAR BILLS discount variety store in Virginia in November 1986. As of September 1993, TPI was operating 102 DOLLAR BILLS discount variety stores in twelve states. As of 1991, TPI was operating DOLLAR BILLS stores in Virginia, Maryland, Indiana, Illinois, Michigan and Wisconsin. In 1992, TPI opened additional DOLLAR BILLS stores in Ohio, Florida and Missouri. In 1993, TPI opened additional DOLLAR BILLS stores in Pennsylvania, Georgia and Alabama. (TPI's rebuttal testimony period closed in the fall of 1993). As of 1993, TPI employed over 1600 people in its DOLLAR BILLS stores. While TPI's sales figures are confidential, suffice it to say that in the seven year period from the fall of 1986 to the fall of 1993, TPI's sales have increased by a factor of well over 50.
A typical DOLLAR BILLS discount variety store operated by TPI averages 5000 square feet; is located in a strip mall; and caters to lower and middle income individuals. TPI obtains a wide variety of merchandise for its DOLLAR BILLS stores through close-outs, discontinued merchandise, excess inventory and close dated merchandise. Products carried at a typical DOLLAR BILLS include food, health and beauty items, cleaning products, housewares, hardwares, toys, ceramics, jewelry, clothing accessories and, from time to time, a few clothing items such as handkerchiefs or t-shirts. Virtually all of the merchandise at a DOLLAR BILLS operated by TPI is priced at or below one dollar.
*4 TPI distributes its goods to its DOLLAR BILLS discount variety stores through five warehouses which it owns, two of which are located in Maryland, and three of which are located in Illinois.
In February 1993 TPI hired an in-house director of real estate (Harold van Ommeren) whose duties were to find additional markets and specific locations for DOLLAR BILLS discount variety stores. As of the close of its testimony period in the fall of 1993, TPI was actively reviewing potential sites for new DOLLAR BILLS stores in twelve additional states: Delaware, West Virginia, North Carolina, South Carolina, Tennessee, Texas, Oklahoma, Iowa, Minnesota, Colorado, California and Washington.
As previously noted, "Vanlex does not contest TPI's recitation of facts with respect to [TPI's] business (TPI's brief, pages 3-9)." (Vanlex brief, p. 3). One of the facts recited by TPI in its brief is that TPI "adopted the mark [[[DOLLAR BILLS] without any knowledge of Vanlex's mark [DOLLAR BILL'S]. In fact, [TPI] did not become aware of Vanlex and its mark until the filing of the opposition herein [May 1989]." (TPI brief, p. 8). As of that time, TPI (or its predecessors) were operating at least seven DOLLAR BILLS stores in Virginia, Illinois and Indiana.
In determining whether TPI is entitled to the concurrent use registration which it seeks, two propositions must be kept in mind. First, it must be remembered that "the touchstone [of a concurrent use registration] is the requirement that there be no likelihood of confusion, mistake or deception in the market place as to the source of the goods [or services] resulting from the continued concurrent use of the trademark [or service mark]. Only in satisfying this requirement, can the Patent Office be sure that both the rights of the individual parties and those of the public are being protected." In re Beatrice Foods Co., 429 F.2d 466, 166 USPQ 431, 436 (CCPA 1970).
The second proposition applicable to this case is that the "rights of a prior user ... to expand its use may, under certain fact situations, be lost to a good faith second user who has embarked on a vigorous expansion program under the mark." Weiner King, Inc. v. Wiener King Corp., 201 USPQ 894, 910 (TTAB 1979), modified 204 USPQ 820 (CCPA 1980).
We will consider first the issue of likelihood of confusion. To cut to the quick, we believe that there are clear differences in TPI's services (as described in its concurrent use application) and the services which Vanlex currently renders at its DOLLAR BILL'S store in Grand Central Station. Stated somewhat differently, TPI's description of its services (discount variety goods store services) would not encompass the sale of even moderately priced clothing, much less the "very, very upscale" clothing carried by Vanlex at its DOLLAR BILL'S store in Grand Central Station. (Braha dep. 5). [FN2] In addition, we note that while the word portion of TPI's mark is extremely similar to Vanlex's mark DOLLAR BILL'S, by the same token, TPI's mark also includes the character of a dollar bill with a face, arms and legs. Given the significant differences in the services for which TPI seeks registration and the services which Vanlex actually renders under its DOLLAR BILL'S mark, we believe that the differences in the marks are sufficient such that, were we considering the issue of likelihood of confusion absent any geographical restrictions, we would find the issue to be a very close one. In our view, there is a serious question as to whether a consumer who was familiar with TPI's discount variety stores featuring the mark DOLLAR BILLS with the rather "goofy" dollar character would, upon seeing Vanlex's mark DOLLAR BILL'S used in association with a very upscale clothing store, assume that there was any affiliation between the two. In any event, in our judgment, any geographic separation between TPI's operations and Vanlex's operation would satisfy the requirement for a concurrent use registration that there be no likelihood of confusion.
*5 Having determined that granting TPI a registration with geographic restrictions would not result in a likelihood of confusion, we must now determine what territory TPI is entitled to. In "turning to the fundamental question in this case, i.e., who gets what territory," the predecessor to our reviewing court has stated "that the inquiry should focus on the party's (1) previous business activity; (2) previous expansion or lack thereof; (3) dominance of contiguous areas; (4) presently-planned expansion ..." Weiner King, 204 USPQ at 829-30.
In this case, all four factors favor TPI. TPI's previous growth has been rather dramatic. Beginning with one DOLLAR BILLS discount variety store in 1986, it has expanded to over 100 such stores by 1993. In contrast, Vanlex's past activity has shown minimal signs of expansion. Vanlex began in 1978 with one DOLLAR BILL'S in New York City, and today it has just that one same store. Indeed, with the demise of its DOLLAR BILL'S store on Third Avenue, Vanlex has actually seen its activities contract.
Moreover, Vanlex has conceded that the vast majority of its DOLLAR BILL'S customers reside in the "excepted area" set forth in TPI's concurrent use application. Approximately only eleven percent to perhaps thirteen percent of the patrons of Vanlex's DOLLAR BILL'S reside outside the excepted area. (Vanlex brief, p. 19). Moreover, the majority of these patrons (i.e. the 11% to 13%) still come from the tri-state area of New York, New Jersey and Connecticut.
As for presently-planned expansion, Vanlex has conceded that it has given up on its plans to open a store in Scarsdale, New York. During its testimony period, Mr. Braha testified that Vanlex was looking into opening a DOLLAR BILL'S store in Pittsburgh, but that Vanlex was "still undecided" as to whether to open such a store. (Braha dep. 25-27). Even if we were to consider the sur-rebuttal testimony which Vanlex has submitted with its brief (see footnote 1), this testimony, in the form of a declaration from Allen Ades (president of Vanlex), merely alleges that "Vanlex is now proceeding with the construction of ... a DOLLAR BILL'S store" in Pittsburgh. (Declaration paragraph c). As of the date of Mr. Ades declaration (January 6, 1994,), Vanlex had still not opened a DOLLAR BILL'S store in Pittsburgh.
In contrast, we find that the evidence submitted by TPI as to its expansion plans for DOLLAR BILLS stores in the aforementioned twelve additional states is rather definite, and we are of the opinion that it is likely that such expansion will occur in at least many of these twelve states.
In sum, we believe that TPI is entitled to a concurrent use registration for most of the United States excluding the excepted area as well as a few additional counties in the greater New York City metropolitan area plus Allegheny County (Pittsburgh) in Pennsylvania. To be more precise, the excepted area should consist of not only the five Boroughs of New York City, the counties of Suffolk, Nassau and Westchester in New York and the counties of Essex, Bergen and Hudson in New Jersey, but also the counties of Rockland and Putnam in New York, the counties of Union and Middlesex in New Jersey and the county of Fairfield in Connecticut (as well as Allegheny county in Pennsylvania). Our review of the entire record in this case convinces us that Vanlex has established as its trading area for its DOLLAR BILL'S store almost the entire New York City metropolitan area. In this regard, based on a review of Vanlex's customer lists and other materials, it is our view that the addition of Rockland, Putnam, Union, Middlesex and Fairfield counties to the excepted area set forth by TPI better reflects Vanlex's current trading area for its one DOLLAR BILL'S store. Moreover, while the evidence presented by Vanlex during its testimony period raises questions in our mind as to whether Vanlex will ever open a DOLLAR BILL'S store in Pittsburgh, given the fact that Vanlex is the senior user, we are inclined to resolve doubts in favor of Vanlex and accordingly include Allegheny county, Pennsylvania in the excepted area. This county contains Pittsburgh and surrounding communities.
*6 Decision: TPI is entitled to a concurrent use registration for the mark DOLLAR BILLS and design for discount variety goods store services for the area comprising the entire United States except for the counties of Essex, Bergen, Hudson, Union and Middlesex in New Jersey, the five Boroughs of New York City and the counties of Suffolk, Nassau, Westchester, Rockland and Putnam in New York, the county of Fairfield in Connecticut and the county of Allegheny in Pennsylvania.
Members, Trademark Trial and Appeal Board
FN1. Before addressing the facts of this proceeding, two procedural matters should be disposed of. First, TPI has moved to strike as hearsay five instances of purported actual confusion testified to by Mr. Braha and Mr. Nachmias. TPI's motion is denied. However, as a practical matter, this ruling is of little consequence. The testimony concerning these five purported instances of actual confusion is so lacking in detail that we have accorded it virtually no weight. Towers v. Advent Software Inc., 17 USPQ2d 1471, 1473 n. 3 (TTAB 1989), aff'd 16 USPQ2d 1039 (Fed.Cir.1990). Second, TPI's motion to strike the sur-rebuttal testimony of Vanlex is granted. As Vanlex acknowledges, "there is no provision in the Trademark Rules of Practice that allows for the presentation of this evidence." (Vanlex brief p. 33). However, once again our ruling is of little consequence to the merits of this proceeding. The sur-rebuttal which Vanlex seeks to introduce merely involves a sixth purported instance of actual confusion and an update on Vanlex's plans to open a DOLLAR BILL'S store in Pittsburgh, Pennsylvania.
FN2. In November 1988, Vanlex filed an application seeking to register DOLLAR BILL'S for "general retail store services." (Vanlex exhibit 203). Vanlex urges that in deciding the issue of likelihood of confusion, we compare "discount variety goods store services" (TPI) with "general retail store services" (Vanlex). Obviously, "general retail store services" is a broad description which covers far more items than clothing, much less "very, very upscale" clothing. However, because Vanlex does not have a registration, we will base our likelihood of confusion analysis on the recitation of services set forth in TPI's concurrent use application and the services with which Vanlex actually makes use of its DOLLAR BILL'S service mark.