On My Mind Blog

Dollar Financial Group, Inc. (DFG) registered MONEY MART in 1999 for “check cashing and electronic funds transfer services, but not including extensions of credit except to the extent evidenced by a check,” and in 2007 for “loan financing,” both registrations claiming use since 1984. 

In 1993, Brittex Financial, Inc. and its predecessor began to operate MONEY MART PAWN and MONEY MART PAWN & JEWELRY for pawn shops in Texas.  Brittex did not seek to register its marks.

In 2014, DFG registered MONEY MART (in standard lettering and in logo form) for “pawn brokerage and pawn shops,” among other things, claiming use of the word mark since 2005, which was later than Brittex’s first use of its marks for those services.

Brittex sought to cancel the latter two DFG registrations claiming priority for the Brittex pawn services.

DFG argued that pawn services were in the zone of natural expansion for its loan financing services, so DFG had priority supporting its registrations for pawn services.

Earlier Proceedings

The Trademark Trial and Appeal Board (TTAB) initially denied the Brittex petition to cancel DFG’s two later registrations, holding that DFG’s earlier registrations for loan financing services encompassed pawn services, which gave DFG priority. 

On appeal, the U.S. Court of Appeals for the Federal Circuit (CAFC) reversed and remanded, holding that pawn brokerage and pawn shop services integrated two separate components, only one of which could be labeled “loan financing”—the lending, but not the retail sale of collateral.

On remand, the TTAB held that DFG could not rely on the zone of natural expansion doctrine to support its registration for pawn shop services because that doctrine is purely defensive.  In other words, DFG could have used its registrations for loan financing services defensively to prevent Brittex from registering the same or a confusingly similar mark for pawn services.  But DFG could not claim the offensive right to register its mark for pawn services by virtue of its prior use of its mark for loan financing services in view of Brittex’s intervening use of its marks for pawn services.

Accordingly, the TTAB partially cancelled the DFG registrations insofar as they covered “pawn brokerage and pawn shops.”

DFG again appealed to the CAFC, which considered the issues afresh and affirmed the partial cancellation.

CAFC Decision

The CAFC followed a 1973 decision by its predecessor court that had held “that the ‘expansion of business’ doctrine is a purely defensive doctrine.”  It affirmed that the zone of natural expansion allows a senior user to prevent a junior user from registering a similar mark on a related line of goods, but does not confer priority giving the senior user a proactive right to register its mark for expanded goods if it would likely cause confusion with established common law rights.

DFG asserted an alternative argument--the doctrine of tacking.  Tacking allows for modifications to a mark which create the same, continuing commercial impression when the new and old goods or services are substantially identical or within normal evolution. The CAFC held that DFG had waived this argument by not raising it before the appeal.

The CAFC then affirmed the TTAB’s findings that, among other things, Brittex had developed valuable intervening rights for pawn services well before DFG commenced use of its mark for those services.  The addition of the descriptive or generic terms PAWN or PAWN & JEWELRY to the intervening Brittex marks was not enough to prevent the parties’ marks from being highly similar and likely to cause confusion.  Therefore, DFG’s mark for pawn services could not be registered in view of the earlier use of the similar Brittex marks for the same services.  DFG’s earlier registrations were for services different from those covered by its later registrations, and DFG could not avail itself of the expansion of business doctrine to support its registrations for pawn services because that doctrine is solely defensive.

Accordingly, the CAFC affirmed the partial cancellation of DFG’s later registrations.

Dollar Financial Group, Inc. v. Brittex Financial, Inc., Case No. 2023-1375 (Fed. Cir. March 19, 2025).

Author’s Note:

Possible Open Questions

• Would DFG have prevailed if it had not waived its tacking argument?
• Would DFG have prevailed if had brought a suit against Brittex’s use of its marks for pawn services alleging infringement of DFG’s registrations of MONEY MART for loan financing services?
• Could DFG now bring such an action, or would the CAFC’s holdings that Brittex established “valuable intervening rights” and that financing services are different from pawn services be judicially binding?
• Could the parties obtain concurrent use registrations giving DFG nationwide rights excluding Texas, or would the CAFC’s finding of a likelihood of confusion preclude it?
• Could DFG bring an action against Brittex alleging dilution by blurring the distinctiveness of DFG’s mark?

For further information, please contact William M. Borchard or your CLL attorney.