United States: Failure to Object to the Defendant’s Proposed Name Change May Preclude Later Challenge

The U.S. Court of Appeals for the Second Circuit has held that a trademark owner’s failure to respond to the defendant’s proposed name change constitutes acquiescence, which may preclude the trademark owner from later challenging the junior party’s use of the proposed name. Profitness Physical Therapy Center v. Pro-Fit Ortho. & Sports Physical Therapy P.C., 2002 U.S. App. LEXIS 24124 (2nd Cir. Nov. 26, 2002).

The plaintiff, operating out of Manhattan, owns the mark PRO FITNESS. The defendant, operating out of Queens, used the mark PRO-FIT PHYSICAL THERAPY. The plaintiff sent the defendant a letter demanding that the defendant stop using its name. The defendant replied that it would proceed to change its name to PRO-FIT ORTHOPEDIC AND SPORTS PHYSICAL THERAPY unless the plaintiff objected to that name. The plaintiff never responded and the defendant changed its name. Approximately 18 months later, after the defendant opened a location in Manhattan, the plaintiff sued the defendant for trademark infringement. The district court awarded summary judgment to the defendant based on the plaintiff’s acquiescence to the defendant’s name change and dismissed the action.

The Second Circuit affirmed the finding of acquiescence, but reversed the dismissal of the action. The court explained that the acquiescence defense applies where there is "conduct on the plaintiff’s part that amounts to an assurance to the defendant, express or implied, that the plaintiff would not assert his trademark rights against the defendant." Because the plaintiff never responded to the defendant’s letter regarding the proposed name change, " it was reasonable for the defendant to rely on the plaintiff’s non-response as consent to its doing business under its new mark." As the court put it, "Given the defendant’s good faith offer of accommodation, the ball was in the plaintiff’s court; the plaintiff could easily have clarified its attitude toward the defendant’s new name with a simple letter stating its objections."

However, the Second Circuit reversed the dismissal of the case, because the district court did not determine the geographic scope of the plaintiff’s consent. As the court explained, the plaintiff’s consent to the defendant’s name may have been confined to the defendant’s use of the name solely at the location where the defendant was operating at the time the defendant sent the response letter and, thus, would not apply to locations to which the defendant subsequently expanded.