Where Your Trademark Rights End: Tea Rose-Rectanus, Dawn Donut, and the Geography of Common-Law Priority
By Casey Scott McKay ·
American trademark rights begin as local rights: at common law a mark is owned only where it is used and known, so two businesses can lawfully own the same name in different parts of the country. This article explains how that geography works, starting with the two Supreme Court cases that built it, Hanover Star Milling (1916) and Rectanus (1918), and the good-faith remote junior user defense they created. It then traces how federal registration rewrote the map through constructive notice under 15 U.S.C. § 1072 and constructive use under Section 1057(c), freezing an earlier user into whatever territory it had actually penetrated under the limited area defense of Section 1115(b)(5). It examines the market-penetration and zone-of-reputation tests courts use to draw territorial lines and the fading zone of natural expansion. It takes up the deep circuit split over whether mere knowledge destroys good faith after Stone Creek, and whether Dawn Donut can survive an internet economy. It closes with concurrent use registration as the administrative answer and an honest inventory of what remains unsettled.
IP and Technology > Trademarks | Article | Published 22 July 2024 - Updated 24 December 2024 | Casey Scott McKay - marksy.us
Summary. American trademark rights start out as local rights. At common law you own a mark only where you have actually used it and where buyers actually know it, which means two honest businesses can own the same name at the same time in different parts of the country. This article explains how that geography works — from the two Supreme Court flour-and-medicine cases that built it, through the market-penetration tests courts use to draw the lines, to the way federal registration froze the map in place with constructive notice and constructive use. It takes seriously the two hardest questions in the area: whether merely knowing about a senior user destroys a junior user's good faith, and whether the Dawn Donut rule means anything in an economy where every business has a website. It ends where the disputes actually end — concurrent use registrations, coexistence agreements, and a candid list of what the law has not settled.
Keywords: common-law trademark rights · tea rose-rectanus doctrine · hanover star milling · united drug v rectanus · dawn donut rule · good faith remote junior user · constructive notice · constructive use · market penetration · zone of natural expansion · concurrent use registration · limited area defense · geographic scope of trademark rights · stone creek v omnia · trademark priority · unregistered trademarks · zone of reputation · internet trademark rights
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