Dawn Donut Company, Inc. v. Hart’s Food Stores, Inc

Brief Fact Summary. Dawn Donut Company, Inc. (Plaintiff) distributed doughnut mix under the name “Dawn†in an area of New York separate from Hart Food’s (Defendant) use of the name, and sought to enjoin such use.Dawn Donut Company, Inc. (Plaintiff) distributed doughnut mix under the name “Dawn†in an area of New York separate from Hart Food’s (Defendant) use of the name, and sought to enjoin such use.

Synopsis of Rule of Law. The holder of a registered trademark may not enjoin another’s use of it in a different market.

Facts. Dawn Donut Company, Inc. (Plaintiff) sold doughnut mix in several states at ate wholesale level, including areas of New York.  The buyers of the mixes were allowed to call themselves “Dawn Donut Shops.â€Â  Dawn Donut Co. (Plaintiff) registered the name “Dawn†in connection with doughnuts.  After this, Hart’s Food Stores, Inc. (Defendant) began selling “Dawn Donuts†in six New York counties next to Rochester.  Plaintiff did not distribute mix in this area and brought an action seeking to enjoin Defendant’s use of the name.  The district court dismissed the action and Plaintiff appealed.

Issue. May the holder of a registered trademark enjoin another’s use of it in a different market?

Held. (Lumbard, J.)  No.  The holder of a registered trademark may not enjoin another’s use of it in a different market.  The Lanham Act, 15 U.S.C. § 1114, establishes a standard of relief awarded a registrant against the unauthorized use of his mark by another.  It provides that the registrant may enjoin only that concurrent use which creates a likelihood of confusion in the perception of the public as to the origin of the products in connection with the use of the products.  Where the product markets overlap, the junior user’s use of the mark ay not be enjoined.  In this case, the district court found that the two markets involved did not overlap, and this finding was not clearly erroneous.  The court was therefore correct in holding that an injunction should not issue.  The action was properly dismissed, although if Dawn (Plaintiff) ever expands into the area serviced by Hart’s (Defendant), it may then seek the injunction denied here.  Affirmed.

Discussion. At one time, Dawn Donut Co. (Plaintiff) did operate in the area serviced by Hart’s (Defendant), but had stopped doing so before Defendant began its operations.  However, this did not constitute abandonment.  Under 15 U.S.C. S 1127, only abandonment at the retail level entirely can constitute abandonment.  This left Dawn Donut Co. (Plaintiff) free to reenter the area occupied by Hart’s (Defendant).