## Facts

- Dawn Donut Company owned federal registrations for the trademarks “Dawn” and “Dawn Donut” for doughnuts and other baked goods.
- Dawn distributed baking mixes at wholesale and licensed certain bakeries to use the marks at the retail level for goods made from Dawn’s mixes.
- For roughly thirty years, Dawn had not licensed or otherwise used the marks at the retail level in a six-county area around Rochester, New York.
- Hart’s Food Stores operated a grocery chain confined to that Rochester-area market and sold doughnuts and baked goods at retail under the name “Dawn,” without knowledge of Dawn’s registrations.
- Dawn sued under the Lanham Act seeking to enjoin Hart’s use; Hart’s counterclaimed to cancel the registrations, alleging inadequate quality control in licensing (naked licensing) and abandonment.
- The district court dismissed both the infringement claim and the cancellation counterclaim; both sides appealed.

## Issues

1. Whether a federal registrant is entitled to injunctive relief against a junior user operating in a geographically separate retail market where the registrant has not used the mark at the retail level for many years and has no present plan to enter.
2. Whether the registrant’s federal trademark registrations should be cancelled for abandonment or for insufficient control over licensees’ use of the mark.

## Decision

- The Second Circuit affirmed dismissal of the infringement claim because there was no present likelihood of confusion where the parties operated in separate trading areas and Dawn had no current, concrete prospect of retail expansion into Hart’s market.
- The court emphasized that denial of a present injunction did not grant Hart’s a permanent right to the mark; if Dawn later entered the Rochester-area market, it could seek an injunction upon a proper showing.
- The Second Circuit affirmed dismissal of the counterclaim, holding that Dawn had not abandoned its marks and that Dawn maintained sufficient quality control over licensees to preserve the validity of the registrations.

## Legal Principles

- Injunctive relief for infringement of a registered mark requires a likelihood of confusion; concurrent use in separate trading areas, without likely market entry by the registrant, may defeat present injunctive relief.
- Federal registration provides constructive notice nationwide; a junior user in a remote market does not acquire an unassailable right to continue if the registrant later enters that market and shows likely confusion.
- Localized nonuse in a particular territory, without intent to relinquish rights and with ongoing use elsewhere, does not necessarily constitute abandonment of federally registered trademark rights.
- A licensing program does not invalidate a registration if the trademark owner exercises sufficient control over the nature and quality of goods sold under the mark; the party seeking cancellation bears the burden of proof.

## Conclusion

The Second Circuit held that a federal trademark registrant could not obtain an injunction against a remote junior user absent a present likelihood of confusion, but the registrant’s nationwide rights were preserved through constructive notice and could support future injunctive relief upon market entry; the court also rejected cancellation based on abandonment and alleged naked licensing.


Dawn Donut Co. v. Hart's Food Stores, Inc., 267 F.2d 358 (2d Cir. 1959)