## Facts

- Blue Bell, Inc. and Farah Manufacturing Co., Inc., competing national men’s clothing manufacturers, independently adopted the identical mark “Time Out” for men’s slacks and shirts.
- The parties agreed concurrent use would likely confuse consumers; the dispute turned solely on which party had priority through earlier trademark “use in trade.”
- Farah conceived the mark in May 1973, approved an hourglass logo, and began preparations for a marketing campaign; it completed tags by late June.
- On July 3, 1973, Farah sent one “Time Out”-marked pair of slacks to each of its twelve regional sales managers; the managers paid for the pants, largely to cover loss risk.
- Farah began shipping “Time Out”-marked garments to customers in September 1973.
- Blue Bell chose the name “Time Out” on June 18, 1973, produced labels, and attached them to existing “Mr. Hicks” slacks rather than to a newly manufactured “Time Out” line.
- On July 5, 1973, Blue Bell shipped slacks bearing both “Mr. Hicks” and “Time Out” marks; Blue Bell did not begin producing a genuine “Time Out” line until August 1973, with substantial shipments occurring later (into October 1973).
- Blue Bell sued for common-law trademark infringement and unfair competition seeking to enjoin Farah; Farah counterclaimed for injunctive relief.
- The district court granted summary judgment for Farah and permanently enjoined Blue Bell’s use of “Time Out,” allowing Blue Bell only to fill orders received by the close of business on December 5, 1973.

## Issues

1. Which party obtained common-law ownership of the unregistered “Time Out” mark through priority of “use in trade”?
2. What kinds of pre-sale activities qualify as trademark “use” sufficient to create common-law rights, including internal transfers to sales personnel or relabeling existing goods for shipment?

## Decision

- The Fifth Circuit affirmed summary judgment for Farah and upheld the permanent injunction against Blue Bell (subject to the limited order-fill exception).
- The court held that common-law trademark rights arise from bona fide “use in trade,” not mere adoption, preparation, or attempts to reserve a mark.
- Farah’s internal shipments to its sales managers were not, by themselves, sufficient public commercial use to establish priority.
- Blue Bell’s early shipments of relabeled “Mr. Hicks” slacks were token and not bona fide trademark use.
- Farah’s September 1973 shipments to customers constituted the first bona fide commercial use establishing priority over Blue Bell’s later genuine market entry.

## Legal Principles

- Ownership of an unregistered trademark is determined by priority of bona fide use in trade, not by conception, internal planning, or mere adoption of a mark.
- “Use in trade” requires commercially meaningful public use that places the mark before purchasers so it functions as a source identifier.
- Internal distributions within a company’s sales organization, even if accompanied by payment, generally do not establish trademark rights absent public commercial impact.
- Token shipments or strategic relabeling designed primarily to create priority, rather than to reflect genuine market identification, do not create enforceable common-law trademark rights.
- Courts may look beyond formalities (such as physical attachment of labels) to whether the claimed use reflects ordinary-course commercial exploitation and consumer-facing identification.

## Conclusion

The court awarded priority to Farah because it was first to make bona fide commercial use of “Time Out” in customer shipments, while Blue Bell’s early relabeling shipments were token and insufficient to create common-law trademark rights.


Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260 (5th Cir. 1975)