Use in Commerce Requirement for a Trademark Registration

Trademark right is a common law right that is obtained by use of a mark in commerce.  The U.S. Patent and Trademark Office ("USPTO") generally requires evidence of such use before a mark can be federally registered.  This blog post aims to help you to understand what constitutes a “use in commerce” of a mark for obtaining and protecting trademark rights.

The Trademark Act now defines "use in commerce" as "the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark."   There are two basic elements in this requirement, “use” and “in commerce”:

1.       Use of a mark

a.       Ordinary course of trade

b.      Not a use made merely to reserve a right in a mark

2.       In commerce

Use of a Mark

“Use of a mark” plainly means using a mark in association with a product/goods or service.  For example, if you are selling cosmetics, use of a mark means the mark is showing on a jar of cream you are selling.  A photo of the jar of cream bearing your mark would be the proof of use that you can send to USPTO with your trademark application. 

What if you just started your business or a new product line and there is no regular sales yet?  "Bona fide use" may include sales made in a good faith effort to develop a business.  For example, you just started your cosmetic business and have made sample jars of creams with your newly designed mark printed on the jar.  You took or shipped these samples to distributors or retailers in order to promote the sale.  Or, you shipped goods to a sales representation who then distribute them as free samples to potential customer.  You are essentially carrying out "bona fide use of a mark in the ordinary course of a good faith effort to establish a trade." Your samples are recognized as “use of the mark” for trademark registration purpose.  For record keeping purpose, you should always record the first date that you used the mark with your product because that would be the “first use” date you put in for your trademark application.  In addition, you should always document your efforts in developing the business including emails for scheduling the meetings with your potential clients, the dates of meetings and photos of sample products bearing your mark.   These evidences could come in handy when the "bona fides" of the early use of the mark is questioned. 

Use in commerce cannot be a use made merely to reserve a right in a mark.  Such uses may include token use or sham use made solely to reserve a right in a mark, or sporadic, casual, or de minimis uses made to keep a trademark registration alive (from being canceled).  Case law is littered with interesting examples of such “clever uses” created to support trademark applications.  Here are a few examples of such use:

·       shipment of six boxes of various paper goods expressly to establish a basis for filing a trademark application and there were no further shipments for some 18 months;

·       a single shipment of one jar of salt from one corporate officer to another for no charge;

·       sale for $2.50 of 12 bank book holders, followed by instructions not to offer them to prospective customers;

·       sale of a few dollars' worth of women's sportswear to a cooperating company which immediately returned the goods to the seller;

·       "sweetheart" shipment of six cans of grapefruit juice to a one-third shareholder of the shipper at no apparent charge;

·       shipment of adhesive fingerprint seals to a personal friend (who was not engaged in any relevant business) to use "as he saw fit"; and

·       Proctor & Gamble's strategy to keep alive scores of "minor brands" by annually shipping fifty cases of each product to normal customers for $2 per case (regardless of the product shipped), but did not monitor what became of the goods at the retail level nor promote awareness of the minor brands either inside or outside of the company. Furthermore, the trademarked products were simply other P&G products that had been relabelled, and if P&G did not produce the product in question, it simply relabelled those of a competitor.

You can file a trademark application based on “actual use” or “a bona fide intent to use” a mark.  However, even if your file with an intent to use, you must use the mark by demonstrating actual use before a registration will be issued.   After obtaining federal registration of your mark and between the fifth and sixth anniversaries of such registration, you must file with the PTO an affidavit that the mark is in use in U.S. commerce (or explain the circumstances justifying non-use).  Otherwise, the registration will be cancelled automatically. Evidence of use must also be filed at every ten year renewal of the registration.

Use in Commerce

“In commerce” includes all commerce that can be regulated by Congress.   This includes interstate commerce, foreign commerce, commerce within the District of Columbia and commerce with Indian tribes.  “Use in commerce” also includes the sale or transportation of goods or services that affect commerce.  For example, services are usually deemed "in commerce" if they are offered to customers who travel across state lines.  Goods are usually deemed to be "in commerce" if they are shipped over state lines by the mark owner's effort to further a sale. Use in commerce may also occur when goods are shipped interstate in furtherance of a potential sale, such as for display at a trade show. However, if a purchaser takes a purchased goods over a state line, it is not regarded as "in commerce."  

Intrastate use of a mark does not count as a “use in commerce.”  This means that, in the above “shipping the sample” scenario, the samples must be shipped across state line.  In addition, purely intra-corporate transactions have been characterized as "secret" or otherwise non-public uses, and cannot support a trademark registration.  For example, if your company has multiple sites in various states, shipping a product from one site to another does not count as “interstate commerce” even if the product technically crossed state line.

In summary, use is the root of a trademark.  Trademark rights and federal registration start and grow from the use. Without use, marks wither and die. Understanding what it means to use a mark is therefore important to ensuring that trademark rights are properly acquired and maintained. 

Thanks for reading.

Connie

cwan@patentonomy.com

Distinguishing trademark strategy from patent strategy

In my experience of advising businessmen on companies’ intellectual property strategy, I noticed an odd phenomenon: business guys often confuse trademark rights with patent rights and hence trademark strategy with patent strategy.  This blog post aims to clarify some basic features of trademark rights and patent rights and the distinction between the two forms of intellectual property.

Trademark rights arise in the United States from use of a mark.  It is a common law right that can only be obtained through the actual use of the mark in commerce.   This common law right relates to the goodwill that the mark has been associated with, meaning that the mark becomes an abstract or psychological symbol representing the quality of a goods or service.

Close your eye and think about that swoosh symbol of Nike—what images come into your mind? My bet is that the swoosh symbol conjures up various images of famous athletics in motion with their muscle toned bodies gleaming with sweats.  How do these images make you feel?  You feel like putting on a pair of Nike shoes and go out running now!  And all these are happening within a split second of you thinking about the swoosh symbol.  That is the power and the value of a famous trademark!  Therefore, in a marketplace, the goodwill of a mark translates to consumer loyalty to a brand, which a famous mark is often able to achieve.

Because a trademark’s value is associated with its use in commerce, the common law right attaches to the mark from the day the mark is used.  You don’t have to file a trademark application with the USPTO to obtain this common law right.  Therefore, you should always take note of the first use of your mark in association with your goods or service in commerce, which is your “priority” date of the ownership of the mark.

In comparison, patent right is a statutory right—it is a monopoly right for a period of time backed by a government’s enforcement power.  In exchange to this monopoly right, you must provide the public with the knowledge of a novel, nonobvious and useful invention in the form of a patent document having enabling description and the best of way of making or practicing the invention at the time of you filing the patent.  Think of it this way—the only reason a property right is attached to a patent is because the government provides you the access to the court system and its enforcement power to exclude others from practicing your patent without your permission.  Otherwise, a patent is just a piece of paper with technical descriptions and a bunch of oddly worded phrases titled “Claims.”

Savvy business guys are often familiar with the term “priority date” and “prior art” in the context of patents.  They often understand that they should file a patent application before public disclosure of an invention (as a public sale or publication).  However, these concepts are not necessarily applicable to the trademark system.  For example, one CEO once told me that he need to file a trademark application as soon as possible because the company was going to release the product soon.  Well, he was confusing the patent system with the trademark system.  Public use of a trademark will never bar your trademark application; however, public use/disclosure of an invention will bar the filing of a patent application 12 months from the first public use/disclosure date.

Another CEO once provided me a list of suggested countries that he wanted the company’s trademark to be filed in.  Several of the suggested countries were raw material supply countries—however, I know that the particular form of the consumer goods will not be sold in these countries.  I asked him why the selection of these countries and was told that he wanted to stop any potential infringer from manufacturing these goods.  When I asked him whether the consumer goods, which would be sold under the trademark, would ever sold in these countries.  The answer was no. 

This CEO is confusing trademark rights with patent rights.  You can prevent a manufacturer from making a patented goods without a patent license.  However, you cannot prevent the same manufacturer from making the goods as long as the manufacturer does not sell the goods under your trademark.  If the goods will never be sold or used in a country, there is really no value in filing a trademark application in the country.

In summary, for trademark strategy, you should always file in countries that the goods would be sold to your target consumers but not more; and for patent strategy, you should file in any country that your goods will be made, transported, distributed, sold, or used.

Thanks for reading.

Connie

cwan@patentonomy.com