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October 1, 2016 Vol. 71 No. 17 Back to Bulletin Main Page

Defining Use in Interstate Commerce in Trademark Applications

Pull QuoteTwo recent decisions by the USPTO’s Trademark Trial and Appeal Board (TTAB) highlight that applicants’ interpretation of the “use in commerce” requirement may differ when they are called upon to file proof of such use, especially when the mark at issue is used in connection with goods, rather than services.

Use in Commerce

The “use in commerce” requirement of the U.S. federal trademark statute (the Lanham Act) has been in force for 70 years. It applies to U.S. trademark applications based on use in commerce or based on intention to use and enters into play when applicants file their proof of such use at the USPTO. Trademark Act of 1946, Pub. L. No. 79-489, ch. 540, approved July 5, 1946, 60 Stat. 427 (codified as amended at 15 U.S.C. §§ 1051‒1127).

The Lanham Act requires that a mark be used in commerce before it may be registered, unless the application to register the mark is based on a foreign registration. 15 U.S.C. §§1051(a), 1053. The term “commerce” refers to commerce that U.S. Congress may regulate. 15 U.S.C. § 1127. The commerce clause of the U.S. Constitution lists the types of commerce Congress may regulate. For example, Congress may regulate interstate commerce (commerce that occurs between U.S. states), commerce with foreign nations, and commerce with Native American tribes. Use of a mark that occurs solely within one U.S. state does not qualify as use in commerce unless that use directly affects a type of commerce Congress may regulate. To satisfy the statutory requirement, the use must be bona fide and in the ordinary course of trade. 15 U.S.C. § 1127. “Use in commerce” on goods occurs when a mark is affixed to the goods and such goods are sold or transported in commerce. 15 U.S.C. § 1127. “Use in commerce” for services occurs when the mark is used on promotional materials that describe the services and the services are rendered in commerce. 15 U.S.C. § 1127.

There are several types of use that illustrate what qualifies as use in commerce. The intrastate sale of wine that was imported into the state has been found to qualify as use in commerce. Silenus Wines, 557 F.2d 806 (CCPA 1977). The shipment of dolls bearing the mark without charge to people in different states constitutes use in commerce. Ideal Toy Corp. v. Cameo Exclusive Products, Inc., 170 USPQ 596 (T.T.A.B. 1971). Shipments of pharmaceutical products for preclinical trials within the United States prior to regulatory approval for the drug is an example of use in commerce. Alfacell Corp. v. Anticancer Inc., 71 USPQ2d 1301 (T.T.A.B. 2004). The provision of services from a single restaurant location to out-of-state travelers may qualify as use in commerce. Larry Harmon Pictures Corp. v. Williams Rest. Corp., 929 F.2d 662, (Fed. Cir. 1991).

Can Use in Commerce Occur within a State?

One recent TTAB case touches on the question whether interstate commerce occurs when consumers, rather than goods, cross state lines. In Adidas AG v. Christian Faith Fellowship Church, Can. No. 92053314 (T.T.A.B. Sept. 14, 2015) [not precedential], Adidas petitioned to cancel two U.S. trademark registrations as void ab initio on the ground that the registrant had allegedly failed to make use of the marks in commerce before filing its use-based U.S. trademark applications. Adidas, p. 2. The marks at issue were ADD A ZERO and ADD A ZERO (& design), which had been registered for use with “clothing, namely, shirts and caps.” The registrant, a church located in Illinois near the Wisconsin border, served parishioners from both states. The registrant defended against the allegation of non-use by relying on the sale of two hats to a Wisconsin resident that took place before the application filing date. Adidas, p. 13. The sale occurred within Illinois, so the registrant did not rely on a sale made to a customer located across state lines at the time of the purchase. Adidas, p. 13. Rather, the registrant claimed the use requirement was met because the customer resided in another state and traveled to the registrant’s state to make the purchase. Adidas, p. 13. The registrant also offered evidence of an in-state sale to a customer who may have resided out of state and the fact that the goods were offered for sale to out-of-state individuals to support its use in commerce claim.

The TTAB found that the sale to the out-of-state resident was “de minimis and, under the circumstances shown here, [was] insufficient to show use that affects interstate commerce.” Adidas, p. 17. Having found that the registrant had failed to make use of the marks in commerce before the filing date of the use-based applications, and therefore that the applications lacked a valid filing basis under the Lanham Act, the TTAB granted the petition to cancel the registrations. Adidas, p. 17. The registrant in Adidas has filed an appeal to the U.S. Court of Appeals for the Federal Circuit (CAFC), arguing that the TTAB erred by imposing a threshold requirement on interstate sales to show use in commerce. Adidas Registrant’s Appeal Br. 9. The petitioner in Adidas has understood the TTAB decision to mean that the single intrastate sale was too de minimis alongside other evidence in the case to show an impact on interstate commerce. Adidas Petr. Appeal Br. 5.

In an even more recent case, the TTAB also found a use-based U.S. trademark application to be void ab initio because the applicant failed to make use of the mark in commerce in connection with its goods prior to the filing of the application. Doctor’s Assoc. Inc. v. Janco, LLC, Case No. 91217243 (T.T.A.B. Jan. 7, 2016) [not precedential]. In the Janco case, the applicant sought registration of the mark FLATIZZA for pizza relying on its sale of pizza at a single restaurant. The sales of pizza that took place before the application filing date did not involve shipping pizzas across state lines or taking orders from customers in another state, but simply selling pizza at a single restaurant.

The Janco opinion cites many cases on the subject of what constitutes use in commerce for a mark used in connection with services. Chief among these is Larry Harmon Pictures Corp. v. Williams Rest. Corp., 929 F.2d 662 (Fed. Cir. 1991). In Harmon, the record showed that the mark at issue had been used in connection with restaurant services rendered from a single location to customers traveling across state lines. In Janco, the TTAB describes Harmon as holding that “these services had a direct effect on interstate commerce and were sufficient to show that the applicant’s mark was used in commerce.” Janco, p. 6. In Janco, the TTAB recites numerous facts from the record of Harmon, such as the proximity of the applicant to a metropolitan area comprised of individuals from three different states, features of the applicant’s restaurant in national publications, the amount of business that came from out-of-state customers, and letters from out-of-state patrons. However, the TTAB in Janco emphasized the absence of similar facts in the case before it and specifically noted the absence of any evidence that “services were rendered to any out-of-state customers,” concluding the facts in the record were insufficient to show an effect on interstate commerce. Janco, p. 7. Ultimately, the TTAB found that the applicant in Janco had used the mark only in connection with a single restaurant location before filing the use-based application and that such use was not in interstate commerce for purposes of selling pizza and its pizza sales had no impact on interstate commerce. Therefore, the application was void ab initio and the TTAB sustained the opposition and refused registration.

Comparing the Two Cases

Does the Janco case contrast with the Adidas case? In the latter, the undisputed facts showed a sale of clothing items within a single state to an out-of-state customer who traveled across state lines to purchase the clothing, and the TTAB found no use in commerce because such sale was de minimis. Adidas, p. 17. In Janco, the TTAB specifically noted the absence of any evidence showing sales to out-of-state customers. Janco, p. 7. It also emphasized the lack of evidence implying such sales, such as no listing in travel or restaurant guides, no advertising evidence, and no evidence that out-of-state viewers accessed the website. Janco, p. 7. If the TTAB had found that a sale of trademarked goods had been made to a customer from out of state in Janco, would it have found use in commerce sufficient to allow the application to survive? That question will be more easily answered after the CAFC decides the appeal in Christian Faith Fellowship v. Adidas, AG. These cases highlight the question of whether a sale to a person who traveled across state lines to make the purchase constitutes an interstate sale. This is important because if it does, a single sale supports a use in commerce claim. But if it does not, the applicant will have to amass additional facts and sales to show the use of the mark intrastate has a sufficient impact on interstate commerce to qualify as commerce that Congress may regulate before claiming use in commerce.

Practice Pointers

Neither Adidas nor Janco is precedential, but they merit consideration because of the focus on the significance of sales of trademarked goods to out-of-state travelers. The Adidas case is on appeal to the CAFC, so clarification on this issue may be forthcoming. In the meantime, practitioners seeking to protect their clients’ registrations from challenges that they are void ab initio for failure to have used the mark in commerce may want to take a conservative approach. For example:
  • If the only evidence of trademark use is a sale of goods to out-of-state purchasers that took place at the mark owner’s place of business, the practitioner may want to wait until the mark owner has conducted sales in which it sends the goods across state lines to a purchaser before claiming use in commerce.
  • Alternatively, if it is unlikely the mark owner will send goods across state lines in a sale, but will continue making sales to out-of-state travelers, the practitioner may want to wait until he or she can gather evidence about numerous such sales along with evidence of extensive advertising in more than one state, reviews of customers from multiple states, proximity to state boundaries or interstate highways, invoices sent out of state, and other evidence that demonstrate such sales at least affect interstate commerce sufficiently to qualify as use in commerce.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.

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