Geographical Scope of Trademark Registrant's Right
to Enjoin Use that Commenced after Registration
Naoki Matsumoto (My Home Page: http://homepage3.nifty.com/nmat/)

Table of Contents

Geographical Scope of Trademark Registrant's Right
to Enjoin Use that Commenced after Registration

1 Issue
1.1 Model Situation
1.2 Difficulty
1.3 Lanham Act
1.4 Dawn Donut Rule
2 Background
2.1 Constitutional Ground
2.2 Registration
2.2.1 Nonexistence of Other's Right
2.2.2 Concurrent Registration
2.3 Effect of Registration
2.3.1 Right of Registrant
2.3.2 Likelihood Requirement
2.3.3 Possible Defenses
2.4 Superiority in Future
2.4.1 Fairway Foods
2.4.2 Analysis on Superiority in Future
2.4.3 Reasoning in Fairway Foods
3 Dawn Donut and Followers
3.1 Dawn Donut
3.1.1 Facts in Dawn Donut
3.1.2 Conclusion in Dawn Donut
3.1.3 Reasoning in Dawn Donut
3.1.4 Dawn Donut and Fairway Foods
3.1.5 Origin of Dawn Donut Rule
3.2 American Foods
3.2.1 Facts in American Foods
3.2.2 Conclusion in American Foods
3.3 Other Followers
3.4 Supporting from Law and Economics
3.4.1 Law and Economics on Trademark
3.4.2 Limited Trademarks Argument
3.4.3 Appreciation of Dawn Donut
3.4.4 Difficulties
3.4.5 Legislative Proposal
4 Conflicting or Distinguishing Cases
4.1 Tisch Hotels
4.1.1 Facts in Tisch Hotels
4.1.2 Conclusion in Tisch Hotels
4.1.3 Tisch Hotels and Holiday Inns
4.2 Foxtrap
4.2.1 Facts in Foxtrap
4.2.2 Conclusion in Foxtrap
4.2.3 Analysis of Foxtrap
4.3 Park 'N Fly
4.3.1 Facts in Park 'N Fly
4.3.2 Conclusion in Park 'N Fly
4.3.3 Analysis of Park 'N Fly
5 Analysis of Dawn Donut Rule
5.1 Construction of Lanham Act in Dawn Donut
5.1.1 Prior to Lanham Act
5.1.2 Analysis of Dawn Donut
5.1.3 Difficulties Caused by
5.2 Criticism on Dawn Donut Construction
5.3 Possible Support
5.4 Effect of 1988 Amendment
5.4.1 Use Requirement and Abolition
5.4.2 Constructive Use
5.4.3 Relation to Dawn Donut Rule
6 Conclusion

Geographical Scope of Trademark Registrant's Right
to Enjoin Use that Commenced after Registration

There are some trademark-infringement cases where an
injunctive claim was dismissed, while the court admitted the
registrant-plaintiff's priority, because of lack of likelihood
of confusion. While the statute does not provide for such
defense, those courts appear to have created a rule which
allows same. However, the rule, if any, creates a paradoxical
situation. As well as the rule conflicts with the original
intent of the legislation, it does not go well with the recent
amendment of the statute. Whether it is currently the law is
doubtful.

1 Issue

Suppose a party, A, which does business only in a small
area of the nation. Party A federally registered its
trademark. Suppose further another party, B, which is
conducting a business within a small distinct area far from
A's location. B commenced the use of the same trademark as
A's one after A's federal registration of that mark. Can
party A enjoin B from using the registered trademark?

1.1 Model Situation

Geographical Scope of Trademark Registrant's Right
Page 2

1 The Lanham Act was amended significantly in 1988,
effective November 16, 1989. While all of the cases
referred to are under the Act prior to the
amendment, the cited provisions are those after the
amendment as codified in 15 U.S.C. secs. 1051 - 1127
(1988). There is no relevant effect in the context
except as discussed in Section 5.4.

Even if an enterprise uses a trademark only in a
geographically limited area, it can register the trademark
under the Lanham Act, 15 U.S.C. secs. 1051 - 1127 (1988),1
without any specific limitation as to the territory. If A got
such a registration, based on the face of the Act, A is
entitled to the effect of the registration without any
territorial limitation. Suppose such a local enterprise
registrant, A, would like to enjoin the use by a party, B, in
a place far from the registrant's business.

1.2 Difficulty

Here, the necessity of injunction is arguable.
Concurrent use by both of them will not, on this assumption,
cause any confusion as to the source. Therefore, there is no
need to enjoin the use to avoid confusion. Further, the
number of phonetically valuable trademarks is limited. If we
note this fact, the argument of this direction is of
rationale.

1.3 Lanham Act

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The Lanham Act permits any defense that would be possible
in case of no registration. 15 U.S.C. sec. 1114 (a), second
sentence. Even after the registration became incontestable, a
party that began the use of the trademark before the
registration and before the use by the registrant there ("preregistration
senior user") may be able to continue the use.
15 U.S.C. sec. 1115 (b) (5). This is one aspect of the result
of the limited effect of registrations under the Lanham Act.
Nonetheless, the Lanham Act as a whole leads to the
conclusion unfavorable to B. In other words, a party that
commenced the use after the registration cannot continue the
use in case of the registrant's claim for injunction. The
registration under the Lanham Act has an effect of
constructive notice. 15 U.S.C. sec. 1072. Thus, a user that
commenced the use after the registration can never be in good
faith. This leads to the conclusion that such a user can
never be allowed to continue the use.

1.4 Dawn Donut Rule

However, it is arguable that injunction in the model
situation is excessive. This may have rationale especially
from the view point that the principal purpose of the
trademark law is avoidance of confusion of source. This
argument leads to the conclusion to dismiss the registrant's

Geographical Scope of Trademark Registrant's Right
Page 4

2 Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d
358 (2nd Cir. 1959). This case is well known also
as refers to abandonment of a trademark right.
injunctive claim, denying the apparently straightforward
interpretation of the law as mentioned above.

In some cases, the court actually dismissed the
injunctive claim solely due to the lack of the likelihood of
confusion because of the distance between the parties. In
those cases, it appears as if an established rule exists as
follows: a registrant cannot enjoin a use that started after
the registration in geographically separated area unless
plaintiff is likely to expand its business into defendant's
area. Hereinafter this rule shall be called as the "Dawn
Donut rule" after the name of the leading case.2 The main
theme of this paper is to analyze, to render an answer to the
aforementioned question, the conflict between the Dawn Donut
rule and the straight forward construction of the statute.

2 Background

There are some points that can possibly be interpreted to
support the Dawn Donut rule. However, the face of the statute
conflicts with the same. Further, no legislative history or
others support the rule.

Geographical Scope of Trademark Registrant's Right
Page 5

3 U.S. Const. Art. I, sec. 8, cl. 18.
4 Id. cl. 8.

2.1 Constitutional Ground

The basis of the Lanham Act is the limited power of the
Congress under the Constitution. It is not an entire
legislation to deal with the trademark issue. The basis of
the Lanham Act is the interstate commerce clause.3 The
Constitution explicitly empowers the Congress to legislate as
to copyright and patent.4 However, it does not have a
specific provision that empowers the Congress to deal with
trademark matters on the federal basis. Therefore, the Lanham
Act remains the state laws' applicability in case of a notfederally-
registered trademark and others. It might
constitute the reason the right of registrants has the
limitation in the context hereof, as referred to in Fairway
Foods, as further analyzed later.

2.2 Registration

2.2.1 Nonexistence of Other's Right

Principally, registration under the Lanham Act is
available only if no other person has the right to use such
mark in commerce. As to an application by a trademark owner,

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5 Sec. 1 (b) lacks a corresponding clause. In other
words, in case of an intent-to-use application, it
is impossible to apply for registration of a
trademark which is already used by another party.
15 U.S.C. sec. 1051 (a) (1) (A), the Lanham Act sec. 1 (a) (1)
(A), requires a written application including a statement as
follows (underline added):
. . . a statement to the effect that the person
making the verification believes himself, or the
firm, corporation, or association in whose behalf he
makes the verification, to be the owner of the mark
sought to be registered, that the mark is in use in
commerce, and that no other person, firm,
corporation, or association, to the best of his
knowledge and belief, has the right to use such mark
in commerce either in the identical form thereof or
in such near resemblance thereto as to be likely,
when applied to the goods of such other person, to
cause confusion, or to cause mistake, or to deceive
. . .
15 U.S.C. sec. 1051 (b), which provides for an intent-use
application, has words of the same restriction effect.

2.2.2 Concurrent Registration

If any other person has right to use the trademark, only
an application for concurrent registration is available. The
part of sec. 1 (a) (1) (A) cited above is followed as follows
(underline added):5
. . . Provided, That in the case of every
application claiming concurrent use the applicant
shall state exceptions to his claim of exclusive
use, in which he shall specify, to the extent of his
knowledge, any concurrent use by others, the goods
in connection with which and the areas in which each

Geographical Scope of Trademark Registrant's Right
Page 7

concurrent use exists, the periods of each use, and
the goods and area for which the applicant desires
registration;
Further, 15 U.S.C. sec. 1052 (d), the Lanham Act sec. 2
(d), provides about the concurrent registration, following the
part to refer to the possibility of concurrent registration by
the Commissioner's initiative, as follows (underline added):
. . . In issuing concurrent registrations, the
Commissioner shall prescribe conditions and
limitations as to the mode or place of use of the
mark or the goods in connection with which such mark
is registered to the respective persons.
In case of concurrent registration, each of the
registrants should be entitled to enjoin the other from the
use under 15 U.S.C. sec. 1114 (1). However, since each of
them is entitled to use the mark by its own registration, it
is free from the liability or possiblity of enjoinment under
15 U.S.C. sec. 1114 (1) to the extent of its registration.
2.3 Effect of Registration
A registrant is given right and effect under the Lanham
Act independently from possible protection by the common law.
Against such a right, if the registration becomes
incontestable, only listed defenses are available.
2.3.1 Right of Registrant

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Page 8
6 Park 'N Fly, Inc. v. Dollar Park And Fly, Inc., 469
U.S. 189, 200 (1985); Herrell, Concurrent Use And
Registration Rights, 11 AIPLA Q.J. 177, 178 (1983).
The registration under the Lanham Act has an effect of
constructive notice, as provided for by 15 U.S.C. sec. 1072.
Therefore, a user that commenced the use after the
registration can never be in good faith. 6About the right of
a registrant, 15 U.S.C. sec. 1114 (1), the Lanham Act sec. 32
(1), provides as follows:
Any person who shall, without the consent of the
registrant--
(a) use in commerce any reproduction,
counterfeit, copy, or colorable imitation
of a registered mark in connection with
the sale, offering for sale, distribution,
or advertising of any goods or services on
or in connection with which such use is
likely to cause confusion, or to cause
mistake, or to deceive; or . . .
shall be liable in a civil action by the registrant
for the remedies hereinafter provided. . . .
Further, 15 U.S.C. sec. 1115 (a), the Lanham Act sec. 33
(a), provides that "[a] registration . . . shall be prima
facie evidence of registrant's exclusive right to use the
registered mark in commerce."
After a recent amendment, an application has the
constructive use effect by 15 U.S.C. sec. 1057 (c), the Lanham
Act sec. 7 (c). This point will be fully discussed later.
2.3.2 Likelihood Requirement

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Page 9
In the interpretation of this sec. 32 (1), the critical
point is what extent the limitation by the phrase "on or in
connection with which such use is likely to cause confusion,
or . . ." has effect.
Grammatically, it appears to go just to "any goods or
services" only. On this understanding, it works just to limit
the type of relevant defendant's goods or services. The
comparison with 15 U.S.C. sec. 1052 (d), the Lanham Act sec. 2
(d), supports this construction. Sec. 2 (d) provides as
follows:
(d) Consists of or comprises a mark which so
resembles a mark registered in the Patent and
Trademark Office or a mark or trade name previously
used in the United States by another and not
abandoned, as to be likely, when applied to the
goods of the applicant, to cause confusion, or to
cause mistake, or to deceive: Provided, That when
the Commissioner determines that confusion, mistake,
or deception is not likely to result from the
continued use by more than one person of the same or
similar marks under conditions and limitations as to
the mode or place of use of the marks or the goods
in connection with which such marks are used,
concurrent registrations may be issued to such
persons when they have become entitled to use such
marks as a result of their concurrent lawful use in
commerce prior to (1) the earliest of the filing
dates of the applications pending or of any
registration issued under this chapter . . .
Here, the wording before "Provided" is basically the same
as in sec. 32 (1), including the reference to the likelihood
to cause confusion. Nonetheless, after "Provided," it refers
to the situation where confusion becomes not likely if the
place of use is limited. This means that the wording before

Geographical Scope of Trademark Registrant's Right
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7 Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d
358 (2nd Cir. 1959).
"Provided" requires merely the general likelihood of confusion
without consideration of geographical aspect. The likelihood
may be negated after consideration of the geographical
factors, as suggested in the latter part.
Also, it is worthwhile to make comparison with 15 U.S.C.
sec. 1125, the Lanham Act sec. 43. Sec. 43 provides for false
designations of origin and false descriptions forbidden. In
sec. 43, it is forbidden, among others, to use any word or
others that is likely to cause confusion affiliation of such
person with another person. Here, the likelihood requirement
clearly refers to the parties. In sec. 32 (1), contrary, the
requirement refers only to "goods or services."
In Dawn Donut,7 however, it is understood that, to have
this section applied, the likelihood of confusion must exist
between actual registrant's business and defendant's.
2.3.3 Possible Defenses
15 U.S.C. sec. 1115 (a), the Lanham Act sec. 33 (a),
further provides, following the phrase referred to above, that
"[a registration] shall not preclude an opposing party from
proving any legal or equitable defense or defect which might
have been asserted if such mark had not been registered."

Geographical Scope of Trademark Registrant's Right
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8 Precisely, it may be within "natural area of
expansion." Union National Bank Of Texas v. Union
National Bank Of Texas, 909 F.2d 839, 842 (5th Cir.
1990). This case says "'Zone of expansion' doctrine
represents a conundrum within the conundrum of
trademark law." The theme of this paper may be a
part of this "conundrum" so long as it also relates
to the territorial limitation. Relating to the
zone, Gross, Territorial Scope of Trademark Rights,
44 U. Miami L. Rev. 1075 (1990), discusses the
confusion in cases among "zone of actual market
penetration," "zone of reputation" and "zone of
natural expansion."
After the expiration of the required period and the
required procedure, the registration becomes incontestable
under 15 U.S.C. sec. 1115. An incontestable registration
"shall be conclusive evidence of the registrant's exclusive
right to use the registered mark in commerce" except against
the listed eight defenses. Among them, the following is
relevant in our context:
(5) That the mark whose use by a party is charged as
an infringement was adopted without knowledge of the
registrant's prior use and has been continuously
used by such party or those in privity with him from
a date prior to (A) the date of constructive use of
the mark established pursuant to section 1057 (c) of
this title, (B) the registration of the mark under
this chapter if the application for registration is
filed before the effective date of the Trademark Law
Revision Act of 1988, or (C) publication of the
registered mark under subsection (c) of section 1062
of this title: Provided, however, that this defense
or defect shall apply only for the area in which
such continuous prior use is proved;
Under this provision, in the model situation, if B
commenced the use before A's registration without knowledge of
A's use, B is superior to A in B's territory.8 Here, A cannot

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9 Burger King Of Florida, Inc. v. Hoots, 403 F.2d 904
(7th Cir. 1968).
10 Mister Donut Of America, Inc. v. Mr. Donut, Inc.,
418 F.2d 838 (9th Cir. 1969).
enjoin B from the use there even if A expands its business to
B's territory. Instead, B may be entitled to enjoin A from
intruding B's territory. Burger King9 and Mister Donut10 are
typical examples of cases of this type.
This defense is applicable only where defendant's use
started before the registration. If this requirement and
others are satisfied, however, defendant's right in
defendant's area is superior to plaintiff: defendant can
enjoin plaintiff's use, and plaintiff cannot enjoin
defendant's use. Note, there is no tentativeness here.
2.4 Superiority in Future
Pursuant to the Dawn Donut rule, A can enjoin B from
using the trademark in case of A's business expansion in the
future. Dawn Donut supported A's superiority to B in this
sense. However, there is a case which appears to deny this.
Thus, before the consideration of the Dawn Donut rule, first
this point is confirmed hereinafter. As a conclusion, while
there is such a case, it is not the law. The Dawn Donut rule
is the possible most favorable rule for B. The law is whether
the Dawn Donut rule or the affirm of A's right to enjoin B

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11 Fairway Foods, Inc. v. Fairway Market, Inc., 227
F.2d 193 (9th Cir. 1955).
immediately.
2.4.1 Fairway Foods11
Fairway Foods is the case, as referred to above, which
denied A's superiority in the model situation. This
conclusion discourages the respect to the federal registration
system. In Fairway Foods, despite the constructive notice
provision, defendant was entitled to continue to use the mark
permanently even if the plaintiff's business expands in the
future.
Plaintiff is a Minnesota corporation, which has been
operating a wholesale grocery chain. It has registered its
trademark "Fairway" federally, and sells foodstuffs under the
label "Fairway" only in the states of Minnesota, North and
South Dakota, Wisconsin and Iowa.
Defendant is a grocery doing business only in one county
in California. Namely, defendant has, since 1951, operated a
retail food super market under the name of "Fairway Market" in
Monterey Park, California. Plaintiff claimed injunction of
defendant's use of the trademark.
The court affirmed the District Court's dismissal of
plaintiff's claim. In this case, however, the conclusion was

Geographical Scope of Trademark Registrant's Right
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12 Id. at 198.
13 Id.
14 Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d
358 (2nd Cir. 1959).
15 Id. at 365.
different from Dawn Donut as to the ultimate priority in
defendant's area. Namely, the District Court affirmed
defendant's cross-complaint to enjoin possible plaintiff's use
in the defendant's area in the future. While the court of
appeals reversed it, the reason for the dismissal was the lack
of the "present impending injury."12 The court said as
follows: "if and when plaintiff acts to carry out its
expressed intention to expand into the territory presently
occupied by defendant,"13 it may be affirmed.
The conclusion in Dawn Donut14 is contrary. It stated
that, in case of plaintiff's expansion into the defendant's
area in the future, plaintiff would be able to enjoin the
defendant's use.15 The Dawn Donut court says that it is
natural since plaintiff has superiority to defendant due to
the registration that took place before the adoption by
defendant.
2.4.2 Analysis on Superiority in Future
Compared with the Dawn Donut rule, Fairway Foods is

Geographical Scope of Trademark Registrant's Right
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16 Possibly, in Fairway Foods, defendant commenced the
use before the registration. The date of
registration is not referred to here or at the
district court report (118 F.Supp. 840). If so, it
may be understandable that the court accepted the
possibility of injunction of the use by plaintiff in
the future. On this assumption, however, it is very
strange that the court did not refer to the specific
provision 15 U.S.C. Sec. 1115. In addition, it is
needless for the court to say about constitutional
basis, as did it.
Notwithstanding the possibility as referred to
above, such assumption was not taken here. The
reason is that Dawn Donut do not take such
assumption. A law review article which refers to
Fairway Foods, referred to later, either do not take
that.
17 Park 'N Fly, Inc. v. Dollar Park And Fly, Inc., 469
U.S. 189 (1985). The issue in this case is not the
same as ours. The part cited here is not a holding.
The Supreme Court considered the relevancy of a
defense based on the mark's unregistrability.
Namely, the issue was whether an action to enjoin
the infringement of an incontestable trade or
service mark may be defended because the mark is
merely descriptive. The court concluded that
neither the language of the relevant statutes nor
further more favorable for defendant. In Fairway Foods, in
spite of the constructive notice provision, defendant that
commenced the use after the registration was entitled to
continue to use the mark permanently even if the plaintiff's
business expands into defendant's territory in the future.
Fairway Foods is clearly erroneous if we assume the
chronological order as taken here.16 By virtue of the effect
of the registration as a constructive notice, defendant cannot
be superior to plaintiff. On this point, the Supreme Court in
Park 'N Fly17 says as follows:18

Geographical Scope of Trademark Registrant's Right
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the legislative history supports such a defense.
Although the holding is different from the issue of
this paper as referred to above, this case may be
interpreted to negate the Dawn Donut rule. This
will be fully discussed later.
18 Id. at 199.
19 Fairway Foods, Inc. v. Fairway Market, Inc., 227
F.2d 193, 197 (9th Cir. 1955).
20 Id. at 198.
. . . There is no question that the Lanham Act
altered existing law concerning trademark rights in
several respects. For example, sec. 22, 15 U.S.C.
sec. 1072, provides for constructive notice of
registration and modifies the common-law rule that
allowed acquisition of concurrent rights by users in
distinct geographic areas if the subsequent user
adopted the mark without knowledge of prior use. .
. .
Fairway Foods conflicts with this opinion by the Supreme
Court as to the superiority in the future.
2.4.3 Reasoning in Fairway Foods
Nonetheless, the reasoning in Fairway Foods to dismiss
plaintiff's claim is noteworthy. It refers to the
constitutional basis of the Lanham Act, and states that the
Lanham Act "as to the reach of a registered trade-mark extends
protection only in interstate or foreign commerce."19 As
cited by the court,20 the District Court found that defendant
purchased all their food and other products and sold all of

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21 Fairway Foods, Inc. v. Fairway Market, Inc., 118
F.Supp. 840 (S.D.Cal. 1953).
22 Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d
358 (2nd Cir. 1959).
them within California.21 The District Court concluded that
the defendant's activity was out of the scope of the possible
coverage of the Lanham Act.
3 Dawn Donut22 and Followers
Many cases refer to Dawn Donut, and do not negate the
rule. Some articles refer to Dawn Donut as if the rule is
firmly established. In a strict sense, however, only few of
those cases hold the Dawn Donut rule, and no article points
out persuasive ground for the rule. Instead, one of the
articles admits that Dawn Donut made erroneous interpretation
of the legislative intention.
3.1 Dawn Donut
This is one of the best known cases in this area. The
court held that plaintiff cannot enjoin defendant, which
commenced the use after plaintiff's registration, from using
the trademark. The reason was the lack of likelihood of
confusion due to geographical separation between them.

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23 Id. at 360.
3.1.1 Facts in Dawn Donut
Plaintiff is a wholesale distributor of doughnuts and
other baked goods. Plaintiff is a corporation of Jackson,
Michigan, operating a manufacturing plant there. It federally
registered its trademark "Dawn" in 1927 and renewed the same
in 1947. Plaintiff has failed to employ the trademark "Dawn"
in defendant's area for some thirty years, directly or
indirectly.
Defendant owns and operates a retail grocery chain within
New York counties. Defendant distributes doughnuts and other
baked products in package printed "Dawn" through those stores
since 1951. Before the commencement of this use, the
constructive notice by plaintiff's registration had taken
place as of the effective date of the Lanham Act in 1947.
Plaintiff claimed to enjoin defendant from using the mark
"Dawn" with the retail sale of doughnuts and baked goods in
defendant's market area in New York counties.
3.1.2 Conclusion in Dawn Donut
The District Court dismissed the claim. The court
supported the District Court's dismissal saying as follows
(underline added):23

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24 Id. at 363.
We hold that because no likelihood of public
confusion arises from the concurrent use of the mark
in connection with retail sales of doughnuts and
other baked goods in separate trading areas, and
because there is no present likelihood that
plaintiff will expand its retail use of the mark
into defendant's market area, plaintiff is not now
entitled to any relief under the Lanham Act, 15
U.S.C.A. sec. 1114. Accordingly, we affirm the
District Court's dismissal of plaintiff's complaint.
This is not to say that the defendant has
acquired any permanent right to use the mark in its
trading area. On the contrary, we hold that because
of the effect of the constructive notice provision
of the Lanham Act, should the plaintiff expand its
retail activities into the six county area, upon a
proper application and showing to the District
Court, it may enjoin defendant's use of the mark.
The court dismissed the injunctive claim. On this point,
the conclusion is not different from that in Fairway Foods,
supra. However, there is a big difference between them: here,
if plaintiff expands its territory in the future, plaintiff
may enjoin defendant's use of the mark; in Fairway Foods,
contrary, defendant may enjoin the expansion.
3.1.3 Reasoning in Dawn Donut
The reason for the conclusion to dismiss the claim was as
follows:24
The Lanham Act, 15 U.S.C.A. sec. 1114, sets out
the standard for awarding a registrant relief
against the unauthorized use of his mark by another.
It provides that the registrant may enjoin only that
concurrent use that creates a likelihood of public
confusion as to the origin of the products with

Geographical Scope of Trademark Registrant's Right
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25 Id. at 364.
which the marks are used. Therefore if the use of
the marks by the registrant and the unauthorized
user are confined to two sufficiently distinct and
geographically separate markets, with no likelihood
that the registrant will expand his use into
defendant's market, so that no public confusion is
possible, then the registrant is not entitled to
enjoin the junior user's use of the mark.
The court interpreted the Lanham Act sec. 32 as entitles
a registrant to "enjoin only that concurrent use which creates
a likelihood of public confusion as to the origin of the
products in connection with which the marks are used."25 This
interpretation leads the foregoing conclusion. The court
understands that the descriptive limitation by the phrase
including likelihood functions on the "use," including its
geographical sense. As fully discussed later, however, this
is not according to the face of the section.
3.1.4 Dawn Donut and Fairway Foods
On this point, the court refers to Fairway Foods as if
the same held this interpretation. However, certain
differences exist between them.
The important difference is the tentativeness of the
difendant's right which Dawn Donut admitted. Fairway Food did
not render such a tentative right. As easily understandable,
tentativeness of a right to use a trademark raises a

Geographical Scope of Trademark Registrant's Right
Page 21
26 Developments in the Law of Trademarks and Unfair
Competition, Harv. L. Rev. 814, 857 - 860 (1955).
27 Id. at 859.
difficulty. This point will be fully discussed later.
Additionally, they differ in reasoning. While Fairway
Foods refers to the constitutional limitation, Dawn Donut
leads the same conclusion simply relying on 15 U.S.C. sec.
1114.
3.1.5 Origin of Dawn Donut Rule
Dawn Donut refers to another authority to conclude the
dismissal. That is a law review article.26
The law review article refers to 15 U.S.C. sec. 1114
during discussion about the effect of the constructive notice
provision, 15 U.S.C. sec. 1072. It says that 15 U.S.C. sec.
1114 "gives a registrant remedies against a subsequent user
only when the mark is used in such a way as 'is likely to
cause confusion . . . as to the source of origin' of the
goods."27 On this understanding, it tries to propose to cure
the conflict, which it discovered, between sec. 1114 and sec.
1072. It admits that the statutory history of sec. 1072
supports that no likelihood of confusion is required in this
context. Its proposal is "[t]hese two sections [sec. 1072 and
sec. 1114] could be reconciled if the first user were entitled

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Page 22
28 Id.
29 American Foods, Inc. v. Golden Flake, Inc., 312 F.2d
619 (5th Cir. 1963).
30 John R. Thompson Co. v. Holloway, 366 F.2d 108 (5th
Cir. 1966). Also this case itself held the Dawn
Donut rule and dismissed the injunctive claim.
31 Id. at 114.
to an injunction only after he had expanded his business into
the area of the second user, so that confusion would be
likely."28 On this proposal, it refers to no authority.
3.2 American Foods29
This is a typical case that follows Dawn Donut. American
Foods holds the Dawn Donut rule to the extent to dismiss
plaintiff's claim at the moment. It is understood to be the
leading case which approved the Dawn Donut rule in the Fifth
Circuit.30 In the Fifth Circuit, the Dawn Donut rule is
referred to as "our American Foods rule."31
3.2.1 Facts in American Foods
Plaintiff is an Alabama corporation manufacturing food
products. Plaintiff did some ninety-five percent of its total
business in Alabama, and the remaining in the several states
close to Alabama. Plaintiff registered its trademark "Golden

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32 American Foods, Inc. v. Golden Flake, Inc., 312 F.2d
619, 626 (5th Cir. 1963).
Flake" in 1924 under the trademark Act of 1905, renewed in
1944.
One of defendants is a Texas corporation, and the other
is its distributor in Alabama. They are dealing with food
products. The defendant manufacturer first commenced to use
the trademark "Golden Flake" on refrigerated dinner rolls in
1961. Plaintiff claimed to enjoin the use by defendants.
3.2.2 Conclusion in American Foods
The District Court enjoined defendants from using the
trademark in what was found to be the plaintiff's trade
territory. The court denied, relying on Dawn Donut,
injunctive relief as to the remaining portion of the United
States. Plaintiff contends that it has right to injunctive
relief as to the entire United States instead as to its trade
area only as held by the District Court.
The court granted the District Court's decision as
follows:32
The constructive notice provision of the Act
does deprive a concurrent user of the good faith or
ignorance of prior appropriation factor as a defense
in sustaining the right to concurrent use. However,
there may be other reasons under the Act for
sustaining concurrent use. See the defenses under
15 U.S.C.A. sec. 1115. And that the Act eliminates
this defense by the constructive notice provision

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Page 24
33 Continente v. Continente, 378 F.2d 279 (9th Cir.
1967).
34 Holiday Inns Of America, Inc. v. B & B Corporation,
409 F.2d 614 (3rd Cir. 1969).
in no wise means that the trade-mark law now is,
absent some provision to the contrary to which our
attention has not been called, that the registration
carries with it the exclusive right to use the mark
in interstate commerce notwithstanding lack of use.
Indeed, the requirement of confusion as to source as
a condition precedent to recovery, sec. 1114 (1),
negatives such a proposition. The Lanham Act makes
registration notice but it did not supplant the
prior law as exemplified by Hanover Star Milling
Company, and United Drug Company, supra, and take
plaintiff's mark beyond where it had been used.
The ancient observation that each trade-mark
case must be decided upon its own facts still
obtains, and so it is that this case having been
properly decided upon its own facts, the judgment as
appealed from by both plaintiff and defendants is
Affirmed.
Here, the court referred to Hanover Star Milling, which
was negated by the Supreme Court in Park 'N Fly. Therefore,
if the reasoning for the Dawn Donut rule as taken here is
assumed, Park 'N Fly may be interpreted to deny the Dawn Donut
rule.
3.3 Other Followers
There are some other followers. Namely, holding the Dawn
Donut rule, each of Continnente,33 and Holiday Inns,34

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Page 25
35 Comidas Exquisitos, Inc. v. O'Malley & McGee's Inc.,
775 F.2d 260 (8th Cir. 1985).
Comidas35 dismissed the claim.
Additionally, other many cases refer to Dawn Donut or the
followers not denying the Dawn Donut rule. However, most of
them are distinguishing cases. In some of them, plaintiff and
defendant have the same territory, and injunctive order was
issued. In others, defendant commenced the use before the
registration and thus has superiority to plaintiff.
On the face of those cases, including the Dawn Donut
followers and acceptors, the Dean Donut rule appears as if
steadily established. However, many of them do not hold the
rule, but distinguish it. Therefore, it should be said that
the rule is not established so well as referred to in them.
3.4 Supporting from Law and Economics
There are arguments to support the Dawn Donut rule from
the viewpoint of Law and Economics. They argue, while
admitting that the rule conflicts with the legislative
intention, that the Dawn Donut rule is a court-created
appropriate rule. It has some rationale. Especially, it is
valuable as a legislative proposal. However, it does not seem
persuasive as an argument on the current law.

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Page 26
36 Landes & Posner, Trademark Law: An Economic
Perspective, 30 J.L. & Econ. 265 (1987).
37 Id. at 269.
38 Carter, The Trouble with Trademark, 99 Yale L.J. 759
(1990).
39 Id. at 759.
40 Id. at 760.
3.4.1 Law and Economics on Trademark
Prof. Landes and Prof. Posner analyze the trademark
registration system from the view point of law and
economics.36 Pursuant to them, the justification for the
right given to a trademark owner is based on the benefit
realized in reduction of the search cost incurred by the
consumers. They call that "economizing function."37
3.4.2 Limited Trademarks Argument
Referring to and relying on this Prof. Posner's argument,
Prof. Stephen L. Carter appreciates Dawn Donut from the view
point of Law and Economics.38 Pursuant to him, the important
function of trademarks is that "they lower consumer search
costs,"39 and the "justification for trademark law rests on
the premise that the set of available marks is virtually
infinite."40 He negates this premise. He points out that the
number of valuable trademarks, for example, in phonetical

Geographical Scope of Trademark Registrant's Right
Page 27
41 Id.
42 Id. at 769.
43 Id. at 774.
44 Id. at 759.
sense. He argues "that the protection of marks that convey no
information to consumers carries significant but rarely
mentioned costs."41
He names an assumption that "the set of marks appropriate
to a given product category is practically infinite" IM.42 IM
is for Irrelevant Mark. He argues that IM is not true, and
supports that MIM, Modified Irrelevant Mark assumption may be
true.43
He argues, principally on MIM, that the current Lanham
Act might be "granting too much in return for too little."44
Further, he concedes that even on IM the enforcement of the
letters of the Lanham Act is not appropriate.
3.4.3 Appreciation of Dawn Donut
He highly appreciates Dawn Donut. From his viewpoint,
the Dawn Donut court tried, and succeeded, to limit the right
of a trademark registrant that had not used the trademark
sufficiently.
He admits that Dawn Donut is erroneous on its
interpretation of the legislative intention, as fully referred

Geographical Scope of Trademark Registrant's Right
Page 28
45 Id. at 794.
46 Id.
47 Id. at 791.
to below. Nonetheless, he appreciates "this judicially
created exception."45 He says that "the courts were right to
do what they did in curbing the excesses of the Lanham Act."46
3.4.4 Difficulties
While appreciating Dawn Donut, he admits that it does not
have any ground in the statute or its legislative history. He
says as follows (underline added):47
The difficulty with the Dawn Donut approach is
that nothing in the Lanham Act carves out such an
exception from the nationwide right to use the mark.
But enforcing the Act to its letter would have the
result of permitting senior user-registrant who is a
small regional firm to prohibit use of the same mark
by another larger firm thousands of miles away, even
if the result is higher cost of entry for the junior
user.
Further, while he does not refer to this, the Dawn Donut
rule has difficulty due to the tentativeness of the right
admitted thereby. Dawn Donut clearly says, contrary to
Fairway Foods, that in case of entry by the registrant
plaintiff into the defendant's area, defendant will be
enjoined from using the trademark. Although, he appears as if
he assumes that such situation never takes place. The
economic analysis does not extend to the point of entry by the

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Page 29
48 Id. at 795.
49 Id. at 796.
registrant in the future.
He appreciates the Dawn Donut rule saying that it avoids
the confusion, and the possible economical loss due to the
same, in case of the stop of the use by defendant. However,
we should note that such situation may take place. In such
case, the confusion will be needlessly enlarged by the
application of the Dawn Donut rule. It is strange that he
ignores this difficulty.
3.4.5 Legislative Proposal
Prof. Carter's argument is very persuasive in the part of
legislative proposal.48 The point is that the Lanham Act
gives geographically excessive right in many cases. The
legislation is necessary to limit the geographical area of
right rendered to a trademark registrant if it is not truly
needed.49
For this purpose, besides his proposal, it is necessary
to consider other methods further. It seems reasonable to
introduce significant amount of registration fee that
corresponds to the degree of the area covered by the
registration. It will be helpful to discourage applicants to
obtain not needed geographically broad right.

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Page 30
50 Tisch Hotels, Inc. v. Americana Inn, Inc., 350 F.2d
609 (7th Cir. 1965).
4 Conflicting or Distinguishing Cases
There are many cases that refer to Dawn Donut. Some of
them factually followed the same. However, most of them
distinguished it. To distinguish Dawn Donut is very easy
since it is enough simply to say that the likelihood of
confusion exists in the given case, or easily to say that it
found plaintiff's intent to expand its business to defendant's
territory. Thus, the existence of many cases that refer to
Dawn Donut, and not deny the same, does not support the rule
strongly.
4.1 Tisch Hotels50
Tisch Hotels is an example to show the ease to
distinguish a case from the Dawn Donut rule by saying that the
confusion is likely in the given situation. It points out the
nature of the business concerned, namely, hotel business.
4.1.1 Facts in Tisch Hotels
Plaintiff operates hotels in Miami Beach, Florida, New
York City, and San Juan, Puerto Rico with its service mark

Geographical Scope of Trademark Registrant's Right
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51 Fairway Foods, Inc. v. Fairway Market, Inc., 227
F.2d 193 (9th Cir. 1955).
52 Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d
358 (2nd Cir. 1959).
"Americana" since 1956. It registered the same in 1962.
Defendant has been operating two motels, Americana Motel and
Americana Inn, in the Chicago area, since 1957 and 1961,
respectively. While defendant adopted the mark before the
registration by plaintiff, defendant could not assert its
priority since defendant adopted it knowing the use by
plaintiff.
4.1.2 Conclusion in Tisch Hotels
The court does not refer to Fairway Foods51 or Dawn
Donut.52 However, it states that likelihood of confusion,
including that after geographical consideration, is required
for the injunction. This portion is identical with Dawn Donut
and the others. Defendant's hotels were far from plaintiff's,
and, thus, no competition was found. Nonetheless, the court
affirmed the likelihood saying that the likelihood exists due
to the nature of hotel business that travelers from other area
are the target of the business.

Geographical Scope of Trademark Registrant's Right
Page 32
53 Holiday Inns Of America, Inc. v. B & B Corporation,
409 F.2d 614 (3rd Cir. 1969).
54 Foxtrap, Inc. v. Foxtrap, Inc., 671 F.2d 636 (D.C.
Cir. 1982).
4.1.3 Tisch Hotels and Holiday Inns53
The comparison between Tisch Hotels and Holiday Inns
makes the point clear. Also in Holiday Inns, the court found
that there was effect of the use by plaintiff to defendant.
No substantial difference exists between them. Nonetheless,
the conclusions are different. This shows the possibility of
arbitrary discretion. In other words, the proposition of the
Dawn Donut rule may lack the nature of a law.
4.2 Foxtrap54
This example shows the easiness for a registrant to avoid
the Dawn Donut rule by showing the likelihood of the
registrant's entry into the disputed area.
4.2.1 Facts in Foxtrap
Plaintiff is a private social club located in the
District of Columbia, which was incorporated in 1975.
Plaintiff has, allegedly, 9,200 members in Maryland (40%), the
District of Columbia (20%), Virginia (10%), New York (8%),

Geographical Scope of Trademark Registrant's Right
Page 33
55 Id. at 639.
Georgia (5%), Philadelphia (1%) and elsewhere. Plaintiff
obtained the federal registration of the mark in 1978.
Defendant is a Pennsylvania corporation, incorporated in
1977. It is operating in Pennsylvania a public disco and bar.
It sometimes exacts a variable cover charge to keep a certain
clientele out.
4.2.2 Conclusion in Foxtrap
The court affirmed, while the case was vacated in part
and remanded due to the failure to satisfy the procedual
requirement as to the monetary remedy amount, the District
Court's granting injunction and monetary relief.
Defendant argued based on the distance. Defendant
asserted that plaintiff is not entitled to injunctive relief
because (1) the parties do not offer competitive services, and
(2) plaintiff's rights in its mark do not extend to
Philadelphia.
The court said that direct competition is not a
prerequisite to protective relief. It said "[r]ather, the
inquiry is whether the buying public is likely to believe that
defendant's services come from the same source, or are
affiliated with the trademark owner."55 Further, it says as

Geographical Scope of Trademark Registrant's Right
Page 34
56 Id. at 640.
57 Park 'N Fly, Inc. v. Dollar Park And Fly, Inc., 469
U.S. 189 (1985).
follows (underline added):56
The second prong to appellant's first "noncompetitive"
argument -- that injunctive relief does
not lie because the two clubs operate in different
geographical areas -- is also unavailing. Under the
Lanham Act, a federal registrant is entitled to
enjoin a remote junior user of the mark if there is
a likelihood of the registrant's entry into the
disputed area. Dawn Donut Co. v. Hart's Food
Stores, Inc., 267 F.2d 358, 362 (2d Cir. 1959).
Here, appellee's membership sales in Philadelphia
predating appellant's use of the mark are sufficient
to show that likelihood. So far as appellee is
concerned, Philadelphia is not a remote or
inaccessible area at all . . . .
Following this, the court refers to 15 U.S.C. sec. 1115
(b) (5). The court denied the applicability of this defense
since defendant adopted the mark knowing plaintiff's use.
4.2.3 Analysis of Foxtrap
In this case, Dawn Donut was referred to as restriction
on the applicaiton of the Dawn Donut rule. Here, while
plaintiff did not show no specific plan to do so, the court
admitted the likelihood of registrant's entry. This example
shows how it is easy to avoid the Dawn Donut rule relying upon
the entry-likelihood restriction on its applicability.
4.3 Park 'N Fly57

Geographical Scope of Trademark Registrant's Right
Page 35
Park 'N Fly is the case which was referred to above as
denied Fairway Foods. While not explicitly, Park 'N Fly can
be understood to negate further the Dawn Donut rule. It
stresses the difference between the Lanham Act and the common
law.
4.3.1 Facts in Park 'N Fly
Plaintiff operates long-term parking lots near airports
in St. Louis, Cleveland, Houston, Boston, Memphis, and San
Francisco. Plaintiff registered the mark "Park 'N Fly" in
1971. Nearly 6 years later, upon the completion of the
required procedure, the registration became incontestable.
Defendant also provides long-term airport parking
services called "Dollar Park and Fly" in Portland, Ore, only.
Defendant argued that the registered mark is merely
descriptive, thus injunction should not be given.
4.3.2 Conclusion in Park 'N Fly
The District Court granted the injunctive relief,
denying, among others, alleged defense that the registered
mark is merely descriptive. The Court of Appeals reversed.
The reason was that incontestability provides only a defense
against the cancellation, and that it may not be used

Geographical Scope of Trademark Registrant's Right
Page 36
58 Id. at 199.
59 Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d
358 (2nd Cir. 1959).
offensively.
The Supreme Court negated the decision by the Court of
Appeals, and the case was reversed and remanded. The Supreme
Court supported the offensive use of incontestability.
4.3.3 Analysis of Park 'N Fly
In this case, the Supreme Court clearly said "the Lanham
Act altered existing law concerning trademark rights in
several respects."58 This point is noteworthy. As further
discussed later, the Dawn Donut rule contains, in one sense, a
partial residue of the common law before the Lanham Act
enactment. While it depends on the extent of the negation of
the prior common law, Park 'N Fly can be interpreted as a
denial of the Dawn Donut rule.
5 Analysis of Dawn Donut Rule
5.1 Construction of Lanham Act in Dawn Donut59
Dawn Donut refers to the Lanham Act sections, including
the constructive notice provision. It leads the court to

Geographical Scope of Trademark Registrant's Right
Page 37
60 Id. at 360.
61 Id. at 362.
62 Hanover Star Milling Co. v. Metcalf, 240 U.S. 403,
415 (1916).
negate any defendant's permanent right to use the trademark in
its trading area.60 On this point, the court admitted the
change by the Lanham Act from the common law.61 Nonetheless,
it dismissed the claim relying on the construction of the
Lanham Act sec. 32, supra. It permitted tentative right of
defendant while it denied permanent right. The Dawn Donut
rule can be understood as a compromise, which creates a
paradox as discussed later.
5.1.1 Prior to Lanham Act
The Lanham Act changed the allotment of the right to use
a trademark in a certain area. Even Dawn Donut admits the
change. Before the enactment, under the common law, the first
user in a particular area obtained the permanent right to use
the trademark in that area.
Such right was not affected by prior use in another area.
In other words, right to concurrent use can be obtained even
after another person was entitled to use exclusively the
trademark in another area.62 Note that under the common law
right to a trademark can be obtained only by use.

Geographical Scope of Trademark Registrant's Right
Page 38
5.1.2 Analysis of Dawn Donut
The contrary is lead by the foregoing straightforward
interpretation of 15 U.S.C. sec. 1114. Namely, if a
registration takes place, any other party cannot be entitled
to use the same mark anywhere permanently or not.
Hereinafter, this shall be referred to as the "registrant
rule." The registrant rule is the opposite end to the common
law conclusion. Namely, the registrant rule concludes that
the registrant A, in the aforementioned model situation, has
one hundreds percent of right in B's area. In other words, B
does not have even tentative right to use the mark there, and
A has every and all right as to the mark including the right
to enjoin B from the use in B's area immediately.
The Dawn Donut rule can be understood as a compromise, or
a mixture, between the common law rule and the registrant
rule. It admits tentative right.
5.1.3 Difficulties Caused by Compromise
This nature leads to a paradox. Imagine the situation
after a judgment which permitted a tentative right. Defendant
continues the use. It will further accumulate goodwill. The
longer the period of the use of the trademark become, the more
difficult it will be for defendant to stop the use and abandon

Geographical Scope of Trademark Registrant's Right
Page 39
63 Park 'N Fly, Inc. v. Dollar Park And Fly, Inc., 469
U.S. 189 (1985).
64 Id. at 196.
the goodwill accumulated on the trademark. Notwithstanding,
pursuant to the Dawn Donut rule, plaintiff may overthrow it.
Is it fair or just to render such a vulnerable position
to defendant?
5.2 Criticism on Dawn Donut Construction
Dawn Donut admitted a defense which 15 U.S.C. sec. 1115
(a) does not provide. While it is different from the case of
Dawn Donut, about possible defenses against an incontestable
mark Park 'N Fly63 says as follows:64
The language of the Lanham Act also refutes any
conclusion that an incontestable mark may be
challenged as merely descriptive. A mark that is
merely descriptive of an applicant's goods or
services is not registrable unless the mark has
secondary meaning. Before a mark achieves
incontestable status, registration provides prima
facie evidence of the registrant's exclusive right
to use the mark in commerce. Sec. 33 (a), 15 U.S.C.
sec. 1115 (a). The Lanham Act expressly provides
that before a mark becomes incontestable an opposing
party may prove any legal or equitable defense which
might have been asserted if the mark had not been
registered. Ibid. Thus, sec. 33 (a) would have
allowed respondent to challenge petitioner's mark as
merely descriptive if the mark had not become
incontestable. With respect to incontestable marks,
however, sec. 33 (b) provides that registration is
conclusive evidence of the registrant's exclusive
right to use the mark, subject to the conditions of
sec. 15 and the seven defenses enumerated in sec. 33
(b) itself. Mere descriptiveness is not recognized

Geographical Scope of Trademark Registrant's Right
Page 40
65 Id. at 202.
by either sec. 15 or sec. 33 (b) as a basis for
challenging an incontestable mark.
Here, the Supreme Court strictly denied the possibility
of defense not covered by sec. 33 (b) in case of an
incontestable registration. Dawn Donut appears to conflict
with this. While there is difference as to the
incontestability, at least, the full application of the Dawn
Donut rule was denied by Park 'N Fly.
5.3 Possible Support
The dismissal as Dawn Donut did may possibly be able to
be supported by relying on another provision of the Lanham
Act. Park 'N Fly also says as follows:65
The Lanham Act, as the dissent notes, post, at
217, authorizes courts to grant injunctions
"according to principles of equity." Sec. 34, 15
U.S.C. sec. 1116. Neither respondent nor the
opinion of the Court of Appeals relies on this
provision to support the holding below. Whatever
the precise boundaries of the courts' equitable
power, we do not believe that it encompasses a
substantive challenge to the validity of an
incontestable mark on the grounds that it lacks
secondary meaning. To conclude otherwise would
expand the meaning of "equity" to the point of
vitiating the more specific provisions of the Lanham
Act. Similarly, the power of the courts to cancel
registrations and "to otherwise rectify the
register," sec. 37, 15 U.S.C. sec. 1119, must be
subject to the specific provisions concerning
incontestability. In effect, both respondent and
the dissent argue that these provisions offer
insufficient protection against improper

Geographical Scope of Trademark Registrant's Right
Page 41
66 Union National Bank Of Texas v. Union National Bank
Of Texas, 909 F.2d 839 (5th Cir. 1990).
registration of a merely descriptive mark, and
therefore the validity of petitioner's mark may be
challenged notwithstanding its incontestable status.
Our responsibility, however, is not to evaluate the
wisdom of the legislative determinations reflected
in the statute, but instead to construe and apply
the provisions that Congress enacted.
As suggested here, a court may possibly able to dismiss
an injunctive claim using 15 U.S.C. sec. 1119. However, once
exclusive right is admitted, only rarely injunctive relief
should be denied by 15 U.S.C. sec. 1119. Otherwise, it would
result in the negation of the nature of the exclusive right.
Besides, the limited power of the Congress may reason the
Dawn Donut rule. However, this reasoning is difficult because
the Supreme Court in Park 'N Fly did not questioned the
constitutionality of the Lanham Act to the maximum extent.
5.4 Effect of 1988 Amendment
In 1988, effective November 16, 1989, the Lanham Act was
significantly amendmended by Pub. L. 100 - 667. Among others,
the amedment abolished the pre-use requirement, and added the
constructive use effect to a trademark application. This
amendment can be understood to overrule the Dawn Donut rule.
Union National Bank66 says that "[t]his situation may have

Geographical Scope of Trademark Registrant's Right
Page 42
67 Id. at 842.
been changed by recent amendments to the Lanham Act."67
5.4.1 Use Requirement and Abolition
Before the 1988 amendment, effectively, the Lanham Act
had only sec. 1 (a) which provides that "the owner of a trademark
used in commerce may apply to register his or her trademark
. . ."
The 1988 amendment made it possible to apply and register
a trademark without any prior use. For this purpose, 15
U.S.C. sec. 1051 (b), the Lanham Act sec. 1 (b), was added.
It provides for an application by "[a] person who has a bona
fide intention . . . to use a trademark in commerce."
5.4.2 Constructive Use
The constructive use effect was newly given to an
application. For this purpose, 15 U.S.C. sec. 1057 (c), the
Lanham Act sec. 7 (c), provides as follows:
Contingent on the registration of a mark on the
principal register provided by this Act, the filing
of the application to register such mark shall
constitute constructive use of the mark, conferring
a right of priority, nationwide in effect, on or in
connection with the goods or services specified in
the registration against any other person except for
a person whose mark has not been abandoned and who,
prior to such filing--

Geographical Scope of Trademark Registrant's Right
Page 43
68 Leeds, Intent To Use -- Its Time Has Come, 79
Trademark Rep. 269, 279 (1989).
69 Id.
(1) has used the mark;
(2) has filed an application to register the
mark which is pending or has resulted in
registration of the mark; or
(3) has filed a foreign application to register
the mark on the basis of which he or she has
acquired a right of priority, and timely files
an application under section 44(d) [15 U.S.C.
sec. 1126 (d)] to register the mark which is
pending or has resulted in registration of the
mark.
"Constructive use" means that the filing date is
equivalent to a nationwide date of first use.68 In our
context, the constructive use provision has such effect to
make the critical time point earlier. Namely, while the
constructive notice takes effect as of registration, the
constructive use takes effect as of filing date of
application. The effect of constructive notice also prevents
a third party from acquiring a common law right in a specific
trading area based on its use after the applicant's filing
date.69
5.4.3 Relation to Dawn Donut Rule
The 1988 amendment does not directly or explicitly
overrule or negate the possible Dawn Donut rule. Nonetheless,
it can be interpreted to have done so in effect.

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Page 44
70 Klein, The Trademark Law Revision Act Of 1988: An
Analysis Of The Mechanics And Possible Effects Of
Intent-To-Use Legislation, 16 AIPLA Q.J. 153, 156
(1988).
First, the effect of constructive use conflicts with the
Dawn Donut rule. The Dawn Donut rule can apply only if the
use by a registrant is geographically limited. By the
constructive use provision, an application "shall constitute
constructive use of the mark, conferring a right of priority,
nationwide in effect." This may be interpreted to be a
negation of the prerequisite of the Dawn Donut rule.
Further, the general direction of the 1988 amendment is
in opposite to the Dawn Donut rule. The Dawn Donut rule is,
in its most favorable evaluation, a court-created rule that
limits the right given to a registrant that is not
sufficiently using the trademark. In this sense, the Dawn
Donut court tried to make the effect of the registration as
small as possible. The 1988 amendment, contrary, enlarged the
function of the registration system. "One objective" of the
amendment "is to make it easier for individuals and companies
to clear and acquire priority rights in new trademarks before
going to the sometimes considerable expense of making a 'first
use' of the mark in interstate commerce."70
Under the current Lanham Act after the amendment, even a
party who has never used the mark can apply for the
registration of the mark so long as he has bona fide

Geographical Scope of Trademark Registrant's Right
Page 45
intention. The purpose of the amendment is to give stable
position to such a party. This position does not have ground
that it conveys certain information.
6 Conclusion
Many cases dealt with the Dawn Donut rule as the law.
However, it is difficult to support the same as a fair
construction of the Lanham Act. Nonetheless, it is also
difficult to ignore those cases. It might be possible to say
that it is a court created rule within permissible scope of
the interpretation. On this understanding, the Dawn Donut
rule is the law which the courts created.
However, it is noteworthy that the Dawn Donut rule was
made out of the erroneous construction of wording of the
statute and the legislative intention, and that it creates a
paradoxical situation. Further, the Supreme Court in Park 'N
Fly and the 1988 amendment may have overruled the Dawn Donut
rule.
It must be understood and applied, if so at all, as has
only limited scope of applicability.