Hot Topics in Trademark Law 2015 Series: The Federal Circuit Clarifies Intent To Use – Part 2

January 5, 2016 by Kevin O'Shea, Partner
Hot Topics in Trademark Law 2015 Series: The Federal Circuit Clarifies Intent To Use – Part 2
Services Are Used In Commerce When They Are Rendered, Not Just When They Are Advertised

Note: This blog post is part of a series that reviews and discusses a number of significant trademark-related decisions handed down in 2015, including two from the U.S. Supreme Court and several from the U.S. Court of Appeals for the Federal Circuit and other Circuit Courts. Going forward, these rulings will impact how parties protect their trademark assets, including in particular the strategies that parties will need to employ to maximize their likelihood of success in litigation. To follow the entire blog series, click here. For more information, contact Kevin O’Shea.

The Federal Circuit recently aligned itself with other Circuits in holding that in the context of a service mark, “use in commerce” requires that the associated service actually be rendered, not just advertised. Couture v. Playdom, Inc., 778 F.3d 1379 (Fed. Cir. 2015).  In Couture, an individual registered the service mark “Playdom” based on an application claiming use of the service mark, as opposed to an intent-to-use application. Id. at 1380. In support of the application, the owner had submitted a screen shot from his company’s single page website, which stated that the company “offer[ed] writing and production services for motion picture film, television, and new media.” Id. However, no such services were actually rendered until several years after the application was filed. Id. In the interim, Playdom, Inc. (a Walt Disney company) filed an application for the mark “Playdom.” Id. When the prior “Playdom” registration was cited, Playdom, Inc. sought to cancel the earlier registration because the service mark had not been used as of the date of the application. Id. The Trademark Trial and Appeal Board (“TTAB”) granted the cancellation petition, holding that the owner of the registration “‘had not rendered his services as of the filing date of his application’ because he had ‘merely posted a website advertising his readiness, willingness and ability to render said services,’ and the registration was therefore void ab initio.” Id. (quoting the TTAB’s ruling).

The Federal Circuit previously ruled that “[a]t the very least, in order for an applicant to meet the use requirement, there must be an open and notorious public offering of the services to those for whom the services are intended.” Id. at 1381 (quoting Aycock Eng’g, Inc. v. Airflite, Inc., 560 F.3d 1350, 1357 (Fed. Cir. 2009)). But the applicant in Aycock had not made an “open and notorious public offering of his … service to intended customers” and therefore the registration failed at that threshold step, without consideration for whether actual provision of the service was necessary. Id. Thus, the Federal Circuit had not addressed whether the offering of a service, without the actual provision of a service, is sufficient to constitute use in commerce under Lanham Act § 45, 15 U.S.C. § 1127. Id.

The court initially noted that “[t]here is no such thing as property in a trademark except as a right appurtenant to an established business or trade in connection with which the mark is employed….” Id. (quoting United Drug co. v. Theodore Rectanus Co.. 248 U.S. 90, 97 (1918)). Based on this caselaw and the statutory text, the court held that a service mark is used in commerce, so as to support an application under Lanham Act § 1(a), only when the service mark is used or displayed in connection with the related service and the advertised services are rendered. Id. at 1381-82; accord International Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Estrangers a Monaco, 329 F.3d 359, 361-66 (4th Cir. 2003) (reaching the same conclusion in the context of a litigation action); Sensient Techs. Corp. v. Sensory Effects Flavor Co., 613 F.3d 754, 759-63 (8th Cir. 2010) (same); Buti v. Impressa Perosa, S.R.L., 139 F.3d 98, 100-03 (2d Cir. 1998) (same).

Thus, practitioners must be certain that the services associated with a service mark have actually been rendered, and not just advertised, when filing a use-based application under Lanham Act § 1(a). If services were not actually rendered to a consumer, a resulting registration can be found void ab initio, through a cancellation (or presumably an opposition) or in infringement litigation. On the other hand, a party accused of infringement or seeking to cancel or oppose a registration should take discovery to determine the actual first date of use – i.e., advertising the services in connection with the service mark and the actual rendering of services to a consumer – to determine if the asserted service mark can be challenged.

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