Trademarks

UNITED STATES OF AMERICA

Trademark trial and appeal board:
No priority in the USA
Through use outside the USA

First Niagara Insurance Brokers Inc. vs. First Niagara Financial Group, Inc. (Decided October 21, 2005 )

The extent to which use outside the U.S. can create trademark rights in the U.S. has been at issue in a number of recent cases. In First Niagara Insurance Brokers, Inc. vs. First Niagara Financial Group, Inc., an opposition decision slated for publication and citable as precedent, the Trademark Trial and Appeal Board ("Board") considered whether the opposer, a Canadian insurance brokerage with incidental U.S. contacts, had rendered its services in U.S. commerce under the mark FIRST NIAGARA prior to the applicant's filing date.

Opposer First Niagara Insurance, an Ontario company based in Niagara Falls, Consolidating Oppositions Nos. 91122072, 91122224, 91122193, 91122450, 91122712 and 91150237 Ontario, Canada, had used its mark FIRST NIAGARA for decades in Canada, but was never licensed to broker insurance or conduct any other insurance business in any state of the United States. It had no U.S. offices, employees or affiliates. The applicant, First Niagara Financial, was based in Niagara Falls, New York, just over the Canadian border from Niagara Falls, Ontario (it since moved to Amherst, New York, a suburb of Buffalo, New York and a further 20 or so miles distant). First Niagara Financial is licensed to broker insurance in the state of New York and filed six trademark applications in 2000 based on an intent to use, and commenced use of FIRST NIAGARA in 2002.

The Board consolidated oppositions filed by First Niagara Insurance against all six applications filed by First Niagara Financial. During the proceedings, the parties produced an extensive factual record. Based on the traditional likelihood of confusion analysis generally applied by the Board, much of the evidence seemingly favored opposer First Niagara Insurance, including, for example:

•  nearly identical marks, each including or consisting of FIRST NIAGARA;

•  accompanying designs each comprising an oval surrounding multiple chevrons reminiscent of the streaming water of Niagara Falls (the streams do, however, point in opposite directions in each logo);

•  identical services offered by the parties, namely, insurance brokerage;

•  very close geographic proximity of the parties' businesses;

•  use of FIRST NIAGARA by the opposer decades prior to the applicant's filing dates and use of FIRST NIAGARA marks;

•  the parties' admission that their advertising and promotions reach overlapping territories;

•  applicant's registration of www.firstniagara.com after opposer had registered www.firstniagra.com ;

•  opposer's claim of 2600 misdirected email messages, all intended for the applicant.

In a dispute between domestic U.S. entities, such facts would usually support a finding of likely confusion and sustain an opposition. But where the parties were separated by an international border, the opposer's case faced insurmountable obstacles. Since the opposer never sought registration in the U.S., in the opposition, it could rely only on its actual use of the mark and the effect such use had on U.S. commerce. Despite being a short drive from the applicant, apparently the opposer was unable to demonstrate any substantial contacts with the U.S. or substantial effect on U.S. commerce. What the opposer was able to show, the Board considered to be "incidental" to the opposer's Canadian insurance brokerage. These included a few Canadian policyholders who had moved to the U.S. from Canada and retained their Canadian policies; a few brokers in the U.S. who contacted the opposer periodically to arrange policies covering risks to property located in Canada; a few claims by policyholders arising from damage to vehicles or property while in transit within the U.S.; and arranging travel health insurance policies covering Canadians while traveling in the U.S.

Aside from perhaps the evidence showing U.S. brokers contacting First Niagara Insurance to arrange policies, there was little in the record to show that U.S. residents or nationals patronized the opposer to obtain new policies, let alone that any U.S. business resulted from advertising or promotion of the mark in the U.S. The Board also considered the regulatory issues presented by insurance brokerage and the requirement for state licensing. In this regard, the Board held that the opposer could not have it both ways, i.e., not be licensed or regulated by, for instance, New York State Insurance authorities, and still be considered to perform brokerage services for purposes of the Lanham Act.

Given this record, and applying the standard of other Federal cases, the Board found that opposer First Niagara Insurance did not offer its insurance brokerage services in U.S. commerce and therefore did not establish prior rights in the mark there.

While often generous in sustaining oppositions by a domestic local user of a mark in the U.S. , unless a non-U.S. based opposer can rely on a famous foreign mark, the Board appears unwilling to recognize transnational spillover of goodwill as a basis for opposition. As the decision does not discuss the repeated instances of actual confusion alleged, apparently the Board was less concerned with protecting U.S. consumers from confusion than with affirming the principle of "territoriality" of trademark rights. If there is a moral here, companies operating near U.S. borders or territorial possessions should consider protecting their marks by either considering registration in the U.S. based on home country trademark rights and/or licensing use of the mark in the U.S. through a U.S. domestic licensee.