What Is The Natural Zone Of Expansion Doctrine?

The natural zone of expansion doctrine is a special rule that can apply in the realm of trademark law. It comes up from time-to-time when two parties have separate claims of priority within a class of goods and services.

When an individual or corporate entity files a trademark application, the application must specify the categories of goods and services in connection with which the mark will hopefully register. Specificity with regard to the actual goods and services within those categories must be addressed as well.

Potential clients commonly ask us to apply for federal registration to cover “everything.” However, applying across all forty-five international classes of goods and services would be expensive (each class bears a separate filing fee) and would result in numerous failures, as no brand can claim that it commercializes its mark in all forty-five classes. Thus, it is common for a mark to be registered in a handful of classes in connection with whatever is currently being sold or intends to be sold in the future.

But what happens when the mark is registered in a class and later is introduced in commerce in connection with goods and services that it had not been applied for nor actually sold in conjunction with? That is where the natural zone of expansion doctrine can play a role and where it can become a frustration for another party that believes it has priority because it used its own similar or identical mark in commerce with a class of goods and services that had not yet been registered by the other party.

The Southern District of Florida case of Popular Bank of Florida v. Banco Popular de Puerto Rico from 1998 sheds some light on this issue. Citing to prior precedent, the court noted that a trademark owner may also establish enforceable common-law rights based on its natural zone of expansion.

Under this doctrine, a prior user who can prove neither use nor current association with the mark in the disputed area can still prevail over a subsequent good-faith user by establishing that the area is within the zone of the prior user’s probable or natural expansion. Under the common law, the senior user could not monopolize markets that neither his use nor reputation could reach, but the “zone of natural expansion” doctrine provides the senior user with some limited “breathing space” in which to expand beyond its current use. (Emphasis added).

In Popular Bank of Florida, as is true in other cases in the state, the focus is on geographic expansion. Hence, the use of the words “area” and “markets.”

However, the natural zone of expansion doctrine is not just limited to extending beyond the geographical area in which the mark is registered. As stated earlier, it can also extend to additional categories of goods and services outside those specifically referenced in the registration.

In the American Bar Association’s November 2019 Update to its Business and Commercial Litigation in Federal Courts treatise, an example of where the natural zone of expansion may apply is when a client that uses a mark on perfumes expands to use the mark on other beauty products.

The treatise also provides an example of where it did not end well for the owner of a trademark registration. It highlighted the owner of the registered mark “Domino” for sugar suing the user of “Domino’s” for pizza and mentioned that there were dozens of other registrations for the mark “Domino” including in the food category. The court concluded that such extensive third-party use and registration limited the scope of the sugar company’s registration and, thus, the natural zone of expansion could not apply in that instance.