JUDGMENT FOR SMALL AND CPAATTY
the court ultimately decided in favor of Small and Cpaatty, it might have
The most important factor in a trademark infringement case is first use. However, there are cases where the party who first uses a mark does not prevail and this is one of them.
The evidence shows that Big started using the mark in 1997 and continued that use, without interruption, until late 2004 or early 2005. During that time, the newsletter appears to have been relatively insignificant as a means of contact with the outside world, most of which continued to be through direct contact through Big's sales representatives. Big did not aggressively promote TaxHQ, other than as the name of its newsletter, and it appears that Big was known as Big, and not as TaxHQ.
Each of the parties knew that the other was using TaxHQ and it appears that neither of them was of the opinion that infringement existed and had to be dealt with. In the case of Small and Cpaatty, it appears that Small and Cpaatty believed that the marks used by Big and by Cpaatty and Small were neither competitive nor likely to lead to confusion and that the target markets of the two companies were different.
When Big decided to create its web site, it made a conscious decision to cease using TaxHQ as the name of its newsletter, even though it went ahead with registration of TaxHQ as the name of its newsletter after it was no longer using TaxHQ as the name of its newsletter. In so doing, it abandoned the use of TaxHQ as a mark for the newsletter, indicating no concern about any transferability between the original use of TaxHQ as a newsletter and the use of it shortly thereafter for its web site.
While it is not necessary to reach the point, it is significant that Big's application for a TaxHQ trademark for its web site appeared designed to differentiate it from Cpaatty''s TaxHQ registration by treating it as "Big's" TaxHQ when filing for Big TaxHQ and by framing its claims so that its claim for services appears significantly different from the claims of Cpaatty with respect to his prior registration of TaxHQ. Materials in the USPTO file indicate a reticence on the part of Big which would be unlikely if Big really believed that Big's claim was superior to Cpaatty's prior registration of TaxHQ.
The parties co-existed, each with knowledge of the other's presence, for an extended period of time thereafter. This precludes (because of the defense of laches) any attempt by Big to use the newsletter version of TaxHQ to stop Cpaatty's use of TaxHQ, even in the absence of the finding of abandonment.
Big claims that it did not act because it did not know what Small or Cpaatty were doing and had no contact with Small or Cpaatty beyond the fact that it advised Cpaatty on November 1, 2004 that Big had used TaxHQ as the name of its newsletter for an extended period of time. Big's assertion of its ignorance is not credible, and it lends further credence to the idea that Big did not believe that its rights to TaxHQ for its services were superior to the rights of Cpaatty and Small.
Small and Cpaatty did not believe, based upon what they knew at the time, that there was a likelihood of confusion because of the difference in target markets, and thus is not precluded from relief by laches. Subsequent discovery of the NewBiz connection is evidence that Big was using the Big TaxHQ mark to infringe on the Small and Cpaatty TaxHQ mark.
Accordingly, the court orders that the TaxHQ mark of Big and the Big TaxHQ mark be cancelled, that Big cease using the marks and that Big pay the court costs of this proceeding. All other claims of the parties are dismissed with prejudice.
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