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October 31, 2019

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Gavels and Glazers - The Surprising Importance of Donuts in Trademark Law

May 10, 2017

Preliminary note:  Though "doughnut" is the original spelling of the word, Merriam-Webster considers "donut" to be an acceptable variant.  Accordingly, and since said variation is the author's preferred form of the word, it will be the form used throughout this article.

 

 

 

Donut.  Noun.  "A small usually ring-shaped piece of sweet fried dough."

- Merriam-Webster's Dictionary

 

Such a simple definition, and one that most would agree utterly fails to describe the cultural infamy, timeless tradition, and sheer hump-day euphoria encapsulated within the delectable confection.

 

But there's another piece missing from this definition that most people aren't aware of: the donut's enormous footprint on the landscape of trademark law.  And to see exactly how the donut obtained its legal significance, we have to travel back a ways - to the case of Dawn Donut Company, Inc., vs. Hart's Food Stores, Inc.

 

The year is 1959, and Dawn Donut Company, Inc., is in the business of selling wholesale donut mix.*  It does so, naturally, under the trademark of "Dawn Donuts" - a federally registered trademark which it licenses to retail bakeries.

 

Enter Hart's Food Stores, Inc. - a retail store operating in the Rochester, New York area.  Part of Hart's business also consisted of the retail sale of its donuts, which it had decided to name, coincidentally, Dawn Donuts.

 

The mistake was innocent enough - in fact Hart's Food Stores had no knowledge of the Dawn Donut Company, much less that "Dawn Donuts" was a federally registered trademark.  Nonetheless, when Dawn Donut Company found out that Hart's Food Stores was selling donuts using the same name, Dawn Donut Company sued to enforce its trademark.

 

The case went up to the Second Circuit Court of Appeals, and the ruling in the case established landmark precedent - despite Dawn Donut Company's federal trademark, Hart's Food Stores would be allowed to continue selling its donuts as Dawn Donuts.

 

It seems a surprising result, but the logic was unquestionably sound. What it came down to was a matter of location and competition. See, Hart's Food Stores - operating in Rochester, New York - was nowhere near Dawn Donut Company's business territory, and Dawn had no immediate plans to expand into the area. As such, the court reasoned that Hart's unknowing use of Dawn's trademark posed no risk to Dawn Donut Company, as there was no chance that Dawn's normal consumers would be confused by who the "real" Dawn Donut was.

 

In other words, a business can't sue to prevent the good-faith** use of its trademark when there's no chance that use of the trademark would hurt the business.

 

The rule itself is interesting, but the most interesting part about Dawn Donut is that even given the advent of the internet age almost all jurisdictions still follow the precedent of Dawn Donut and similar cases - the reason being that, despite technological advances, most businesses are still constrained by geographic boundaries.

 

So whether it's a fritter, a long john, or just a simple cake donut, the next time you take a bite out of a donut, know that you're chewing on a piece of longstanding trademark history.

 

Danny Garcia is an Associate at Parks Law Offices, whose practice areas emphasize Criminal, Landlord/Tenant, Employment, and Contracts Law, and Litigation.  His favorite type of donut is a glazed blueberry cake donut.

 

 

Footnotes:

 

*And they still are in the business!  https://www.dawnfoods.com/products/bakery-ingredients/donut-mixes-and-bases/cake-donut-mixes

 

**The key here is the term "good-faith."  A company can't knowingly use another company's federal trademark, even if it is outside of the competitor's normal area of business operations.

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