Texas Whataburger (“TEXAS”) adopts and obtains federal registration of mark in 1957. It expands regionally but not into Virginia. Virginia company (“VIRGINIA”) adopts virtually WHAT-A-BURGER for identical services, allegedly before 1957. It never expands beyond Virginia. TEXAS runs across VIRGINIA in 1970, and alleges ownership of superior rights. The matter remains unresolved. In 2002, TEXAS approaches VIRGINIA again, with a somewhat unusual letter, saying in effect “Either you received a license from us in 1970, or you are infringing, which is it?” VIRGINIA brings declaratory judgment action, seeking declaration that it has priority in Virginia and that it has the right to use the mark in Virginia. TEXAS brings counter-claim, seeking declaration that it has priority in Virginia (but DOES NOT seek judgment that VIRGINIA is infringing its rights).
Fourth Circuit: As to priority, because VIRGINIA could not prove its pre-1957 use, it was not a ‘limted-area prior user.’ Thus TEXAS had priority in Virignia (and could in theory prevent use by a second-comer).
TEXAS had not protested VIRGINIA’s right to use, but if it had, it would not have been barred by laches after its 1970 contact. This is because TEXAS did not have rights to assert in 1970. It had had no ability to enter the Virginia market in 1970, and therefore there was no likelihood of confusion in 1970 (thus no colorable claim in 1970). The laches clock would not start running until Texas W. had a colorable claim.
What-a-burger of Virginia v. Whataburger, Inc., No. 03-1517 (4th Cir, Feb 11 2004).
Current locations of Texas Whataburger here.