Trademark Protection under the Natural Area of Business Expansion Doctrine
![handle is hein.journals/tndl53 and id is 864 raw text is: TRADEMARK PROTECTION UNDER THE
NATURAL AREA OF BUSINESS EXPANSION DOCTRINE
Roger H. Marks*
The past several decades have witnessed a dynamic growth and diversifica-
tion of business enterprises.' Stouffers Corporation, for example, has broadened
its pursuits from a restaurant chain to the marketing of frozen foods and, more
recently, to the lodging industry. Technological and socio-economic changes,
new marketing patterns, and keen competition from the industrial leaders have
compelled even the smallest entrepreneur to engage in related product and service
activities. A business experiencing such growth will naturally wish to retain the
goodwill it has achieved, as symbolized by its mark, by applying that mark to
its new products and services; but, the successful extension of its mark to these
new areas depends on whether the particular product or service represents a
natural area of business expansion.2
The natural expansion of business doctrine involves balancing a number
of factors. Of paramount consideration, however, is whether a business enterprise
seeking protection under the doctrine asserts its rights in a timely manner so that
the defense of laches does not bar it from using the mark in a related product or
service area. If this defense is inoperative, a court will then weigh the equities of
the situation to determine whether the doctrine should be invoked. Specifically,
courts will examine the strength of the mark, the reasonable likelihood of a busi-
ness to expand into another product or service line, the extent to which these
other products and services possess similar descriptive properties, the marketing
scheme of the related products or services, and the existence of other uses and
registrations of the mark.
I. Laches
By prior use of a mark on certain products and services, a business obtains
the right to preempt the mark not only for related products and services3 but also
for those which reasonably can be assumed to emanate from the enterprise in the
* Attorney, United States Gypsum Company, Chicago, Illinois; J.D., 1976, Cornell Uni-
versity; B.S., 1973, University of Pennsylvania; B.A., 1973, University of Pennsylvania. The
views expressed herein do not necessarily reflect those of United States Gypsum Company.
1 In 1976 there was a resurgence of mergers and acquisitions due to a rebounding stock
market, soaring corporate profits, declining interest rates on borrowing, and investment in
American companies by foreigners. Unlike the 1960's, however, when any company in any
field that seemed potentially profitable was fair game for the conglomerates, [companies today
want] the product line of the firm they acquire to mesh with their own company's products or
at least fit logically into their marketing and management setups. Time, May 10, 1976, at 61.
2 The expansion of business doctrine, which presupposes two owners of the same or
similar mark, generally arises in the context of noncompeting products and services. See
Instructo Corp. v. Parents' Magazine Enterprises, Inc., 178 U.S. Pat. Q. 62 (TTAB 1973)
in support of this proposition. If the products were directly competitive and sold under the
same or related mark, the prior user would have a legally enforceable right against any sub-
sequent infringing user and consequently this doctrine would not come into play. It should
also be noted that the doctrine arises in a number of different contexts including oppositions,
cancellation and interference proceedings, actions for infringement and unfair competition,
contracts, and declaratory judgment actions filed by shareholders.
3 That protection extends to all goods of the same class even though the alleged infringe-
ment is not upon the same species of articles was recognized early in trademark case law. See
e.g., Emerson Electric Mfg. Co. v. Emerson Radio & Phonograph Corp., 105 F.2d 908, 42](ViewImageLocal?handle=hein.journals/tndl53&div=42&collection=journals&method=preview&ext=.png&size=3)
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Trademark Protection under the Natural Area of Business Expansion Doctrine
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