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Federal Circuit Rules on What Constitutes Use of a Trademark in Commerce

trademark symbolTrademark registration grants the exclusive right to the registrant to use a name, phrase, or logo in commerce. The Lanham Act, 15 U.S.C. § 1051 et seq., governs this process and provides measures for the enforcement of trademark rights. An important requirement for trademark registration is the use of the mark in interstate commerce, which confers legal jurisdiction on the U.S. Patent and Trademark Office (USPTO). The U.S. Court of Appeals for the Federal Circuit recently ruled on a petition to cancel a trademark registration on the ground that the registrant had not actually used the mark in interstate commerce prior to filing its application. The court’s ruling clarifies what it considers to be the “use” of a mark “in commerce.” Christian Faith Fellowship Church v. Adidas AG, No. 16-1296, slip op. (Fed. Cir., Nov. 14, 2016).

The Lanham Act allows the registration of marks that are already being “used in commerce,” 15 U.S.C. § 1051(a)(1); and marks for which applicants show a “bona fide intention…to use a trademark in commerce,” id. at § 1051(b)(1). Applicants must specify which type of registration they are seeking. The statute defines “use in commerce” as the “bona fide use of a mark in the ordinary course of trade.” Id. at § 1127. With regard to goods produced or sold by the applicant, “use in commerce” includes placing the mark “in any manner on the goods” or on packaging or related materials “when…the goods are sold or transported in commerce.” Id.

Even after the registration of a mark, anyone can petition the USPTO to cancel a registered trademark. A petitioner seeking termination must allege that the registration of that mark is causing them damage or will cause them damage based on a variety of grounds identified in the Lanham Act. Id. at § 1064. The Federal Circuit case mentioned above involved a petition for cancellation filed by a shoe manufacturer (the petitioner), challenging a trademark registered by a church (the respondent).

The USPTO had rejected the petitioner’s trademark application for the phrase “ADIZERO” on the grounds of likelihood of confusion with the respondent’s registered mark, “ADD A ZERO.” Both marks were intended for use on clothing. The respondent’s original registration application stated that the mark was already in use in commerce. The cancellation petition alleged that the respondent had not actually used the mark “in commerce” at the time of its application.

The respondent, located in Illinois, produced evidence that it had sold two hats bearing the mark to a Wisconsin resident prior to filing its application. The Trademark Trial and Appeal Board (TTAB) found this to be “de minimis and…insufficient to show use that affects interstate commerce.” Adidas AG v. Christian Faith Fellowship Church, Canc. No. 92053314, opinion at 17 (TTAB, Sep. 14, 2015).

The TTAB cancelled the mark, but the Federal Circuit reversed this ruling. It cited a string of cases finding that federal authority extends to de minimis interstate transactions, going at least as far back as Wickard v. Filburn, 317 U.S. 111 (1942)—a decision that predates the Lanham Act by four years. The sale of a hat by an Illinois church to a Wisconsin resident, the court found, is sufficient to establish “use in commerce.”

For the past four decades, intellectual property attorney James G. Schwartz has advocated for the rights and interests of Bay Area businesses and business owners in both litigation and transactional matters. To schedule a free and confidential consultation to see how we can help you, contact us today online or at (925) 463-1073.

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Jury in California Federal Court Rules for Google in Software Copyright Dispute, Pleasanton Business & Commercial Law Blog, June 15, 2016

Federal Law Now Allows Private Causes of Action to Protect Trade Secrets, Pleasanton Business & Commercial Law Blog, May 31, 2016

Photo credit: PeteLinforth [Public domain], via Pixabay.