Trademarks

Zazu Designs v. L'Oréal: Why a Few Bottles and a Registration Plan Do Not Win the Mark

The Seventh Circuit's ZAZU decision held that token sales and an intent to register cannot establish trademark priority — only genuine market use that links the mark to a source in consumers' minds will do.

June 16, 2025
Row of hair-care and shampoo bottles on a salon shelf
A small Illinois salon's scattered sales of ZAZU hair products lost to L'Oréal's national launch under the same name. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

Zazu Designs v. L’Oréal, S.A., Docket No. 91-2842, 979 F.2d 499 (7th Cir. Nov. 2, 1992), is the clearance lawyer’s cautionary tale about what “use” really means. Argued May 1, 1992, and decided that November, the case produced an opinion by Judge Easterbrook — joined by Judge Posner, with Judge Cudahy dissenting — holding that a hair salon’s scattered, token sales of a ZAZU hair product were insufficient to establish trademark priority against L’Oréal’s later but genuine national launch under the same name. The decision is a foundational statement of the principle that priority flows from real marketplace use that creates source identification, not from a handful of sales engineered to reserve a name or from an intention to register one day.

At a glance

  • Case: Zazu Designs v. L’Oréal, S.A., Docket No. 91-2842, 979 F.2d 499 (7th Cir. 1992)
  • Argued / decided: May 1, 1992 / November 2, 1992
  • Panel: Judge Easterbrook (author), Judge Posner; Judge Cudahy dissenting
  • Holding: Trademark priority requires genuine use sufficient to link the mark with a single source in the minds of consumers; token sales and an intent to register do not establish priority, and L’Oréal’s substantial national use therefore took precedence over the salon’s minimal prior sales
  • Doctrine: Use in commerce, priority of use, the inadequacy of “token use” reservation strategies
  • Disposition: Judgment for the salon reversed
  • Posture: Appeal from a jury verdict and damages award in the Northern District of Illinois

The facts: a salon name, a cosmetics giant, and a race that never really happened

Zazu Hair Designs (ZHD) was a Hinsdale, Illinois hair salon that operated under the trade name “Zazu.” In 1985, Cosmair, L’Oréal’s U.S. licensee, was developing a line of hair-coloring shampoos and settled on ZAZU as a product name. Conscious of the salon, L’Oréal contacted ZHD twice to confirm it did not sell products under that name; reassured that ZHD used ZAZU only as a salon trade name, L’Oréal proceeded, beginning national sales and advertising of its ZAZU hair products in 1986 and applying to register the mark.

Meanwhile, the salon’s principals were quietly developing their own hair products. Before L’Oréal’s launch, they had sold only a few bottles over the counter in Hinsdale and mailed a small number to friends in Texas and Florida; the salon did not begin selling its products in earnest until September 1986. ZHD sued, claiming prior rights in ZAZU for hair products. A jury sided with the salon and awarded substantial damages. The Seventh Circuit reversed, concluding that ZHD’s activities never amounted to the kind of use that confers trademark priority.

What counts as “use”: linking a mark to a source

The heart of Zazu is its definition of trademark-creating use. Under both the common law and the Lanham Act as it then stood, rights in an unregistered mark arise from use in commerce — but Judge Easterbrook insisted that not every sale is a qualifying use. The relevant question is whether the activity is sufficient to associate the mark with a particular source in the minds of the consuming public and to put competitors on notice of a claim. ZHD’s sales, the court held, did neither: “A few bottles sold over the counter in Hinsdale, and a few more mailed to friends in Texas and Florida,” neither linked the ZAZU mark to ZHD’s product in consumers’ minds nor signaled to other producers that the name was taken for hair products.

The opinion is notably skeptical of “token use” — minimal sales staged to reserve a mark while the seller prepares a real launch. Easterbrook traced the function of trademark law to reducing consumer search costs: a mark earns protection because it reliably identifies a source, and protection attaches when, and to the extent that, the mark actually performs that identifying function in the market. Sales too sparse and too private to create any public association do not perform it. ZHD’s trickle of sales was, in the court’s view, exactly that kind of insufficient activity — a use in name only.

Registration intent and the contemplated 1988 amendments

A second strand of the opinion addresses the relationship between priority and registration. ZHD had no federal registration and, on the court’s reading, no concrete plan that could substitute for genuine use. Easterbrook observed that an intent to use a mark — or a “naked” registration unsupported by real commercial use — confers no substantive trademark rights. Rights come from use that creates goodwill, not from paperwork or aspiration.

The decision was handed down against the backdrop of the Trademark Law Revision Act of 1988, which had recently introduced the intent-to-use application, allowing applicants to reserve a mark by filing with a bona fide intention to use it and then perfecting rights through later use. The court was careful to note that ZHD could not claim the benefit of that new constructive-use regime: its activities predated and did not satisfy the statutory framework, and the salon had filed no intent-to-use application. Zazu thus stands at a doctrinal hinge — affirming the old rule that pre-application token use earns nothing, while pointing to the new statutory path (a properly filed intent-to-use application) as the legitimate way to reserve a mark before launch. The lesson for clearance is direct: a party that wants priority before substantial sales must use the intent-to-use mechanism, not a few engineered transactions.

Open questions

  • How much use is enough? Zazu says token sales fail and national launches succeed, but it leaves a wide middle band — regional sales, limited but genuine commerce — where the line between qualifying use and insufficient use remains fact-bound and uncertain.
  • Does the analysis differ for services versus goods? ZHD used ZAZU as a salon trade name (a service identifier) while claiming product rights; the opinion’s treatment of cross-category use leaves open how salon-name goodwill might or might not extend to goods.
  • What is the modern role of the intent-to-use application? Zazu gestures at the 1988 reforms as the proper reservation tool, but the precise interaction between common-law use priority and constructive-use priority under a later-perfected intent-to-use filing continues to generate litigation.
  • How should good faith bear on the result? L’Oréal proceeded after investigating the salon, but the decision rests on use, not equities; how a defendant’s knowledge should affect priority disputes remains contested.

Implications

  • For clearance practice: A target’s scattered or token sales generally do not create priority. A clearance opinion should weight genuine, source-identifying market use heavily and discount minimal sales apparently staged to hold a name.
  • For brand owners launching a product: Do not rely on a handful of pre-launch sales to secure rights. File an intent-to-use application to reserve a mark, and back it with substantial use as quickly as practicable.
  • For investigators of prior users: When diligence reveals a small senior user, assess whether its use is real enough to confer priority; trade-name use for services does not automatically extend to goods.
  • For litigants: Priority disputes turn on the nature and extent of use and its effect on consumer perception; develop evidence of market penetration, advertising, and source association rather than bare sales receipts.

Frequently asked questions

Why did a small prior user lose to a later national brand? Because trademark priority depends on use that actually links the mark to a source in consumers’ minds. The salon’s few local and mailed sales did not create that association, so L’Oréal’s substantial national launch established superior rights despite coming later in time.

Does an intent to use a mark create any rights? Not by itself. The court held that a mere intention to use a mark — or a registration without genuine use — confers no substantive rights. After the 1988 Act, the proper way to reserve a mark before launch is a bona fide intent-to-use application, which the salon never filed.

What is “token use,” and why does it fail? Token use refers to minimal sales arranged to reserve a name rather than to genuinely market a product. It fails because it does not perform the source-identifying function that justifies trademark protection and does not put competitors on real notice of a claim.

Authorities and sources