First Niagara Insurance Brokers, Inc. v. First Niagara Financial Group, Inc.
81 U.S.P.Q. 2d (BNA) 1375, 476 F.3d 867, 2007 U.S. App. LEXIS 555 (2007)
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Rule of Law:
A foreign entity opposing a U.S. trademark registration under Section 2(d) of the Lanham Act only needs to demonstrate prior "use in the United States," not the higher standard of "use in commerce" that is required to obtain its own registration.
Facts:
- First Niagara Insurance Brokers, Inc. (“FN-Canada”) is an insurance broker operating entirely out of Ontario, Canada, with no physical presence or assets in the United States.
- FN-Canada sells insurance policies issued by U.S.-based underwriting companies.
- FN-Canada sells policies through U.S. brokers to U.S. citizens who own property in Canada, sharing the commission with the domestic broker.
- FN-Canada provides services that facilitate cross-border activity, including auto insurance for Canadians driving in the U.S., commercial liability for Canadian businesses operating in the U.S., and policy riders for goods shipped across the border.
- FN-Canada has sold insurance to the Niagara Falls Bridge Commission, a joint U.S.-Canada venture that operates bridges between the two countries.
- First Niagara Financial Group, Inc. (“FN-US”), a New York-based company, offers insurance brokerage services similar to FN-Canada's and uses several marks similar to those used by FN-Canada, such as "First Niagara."
Procedural Posture:
- In January 2000, FN-US filed several intent-to-use trademark applications with the U.S. Patent and Trademark Office (USPTO).
- FN-Canada filed oppositions to each application with the Trademark Trial and Appeal Board (the Board), arguing a likelihood of confusion with its prior-used marks.
- The Board dismissed FN-Canada's oppositions, ruling that FN-Canada failed to show "use in commerce" because its U.S.-related activities were merely incidental to its Canadian business.
- FN-Canada (appellant) appealed the Board's decision to the U.S. Court of Appeals for the Federal Circuit, with FN-US as the appellee.
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Issue:
Does Section 2(d) of the Lanham Act require a foreign opposer to prove its mark was used "in commerce regulable by Congress" to establish priority and oppose a U.S. trademark registration, or is proof of prior "use in the United States" sufficient?
Opinions:
Majority - Clevenger, Senior Circuit Judge
No. Section 2(d) of the Lanham Act only requires an opposer to show prior "use in the United States," not the stricter standard of "use in commerce." The court found that the Trademark Trial and Appeal Board erred by applying the wrong legal standard. The plain language of Section 2(d) requires only that a mark be "used in the United States by another," and noticeably omits the "in commerce" language found in other parts of the Lanham Act. Citing precedent, the court noted that even strictly intrastate use is sufficient to oppose a registration. Although the parties argued the case under the incorrect "use in commerce" standard, the court declined to issue a decision based on a hypothetical reading of the statute. Applying the correct standard, the court concluded that FN-Canada's activities, such as selling insurance to facilitate U.S. travel and cross-border business, unquestionably constituted sufficient "use in the United States" to oppose the registration.
Analysis:
This decision significantly clarifies the legal standard for foreign trademark owners seeking to protect their marks in the U.S. It establishes that the threshold for opposing a registration is lower than the threshold for obtaining one, making it easier for foreign entities with some U.S. nexus to prevent confusingly similar marks from being registered. This lowers the barrier for foreign businesses to enforce their prior common law rights against subsequent applicants. The court's decision to apply the correct legal standard, even when the parties had argued under an incorrect one, underscores the judiciary's focus on the plain language of statutes over the parties' litigation strategy.
