WHAT IS A “USE IN COMMERCE” FOR TRADEMARK PURPOSES?

Ivan Hoffman, B.A., J.D.

 


In order to obtain trademark registration under United States laws, the applicant must allege and demonstrate that it has used the claimed mark “in commerce.”   Although it is possible to obtain what is called a Notice of Allowance as to a mark that has been filed on the basis of a bona fide intention to use (meaning that it has not yet been used but has otherwise cleared the “hurdles” in terms of examination by the USPTO and has not received any opposition during the period of publication), that Notice of Allowance is not a registration.  Until the mark is actually used “in commerce,” no registration can issue.

 The Constitutional Mandate

The power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;” comes from the United States Constitution, Article I, Section 8, subsection 3.  Over the centuries, this “commerce” clause has been given a very broad interpretation by the Courts. 

The trademark legislation that has been enacted and that currently exists codifies this Constitutional mandate in 15 U.S.C. section 1051 (a) (1).  The statute goes on to define “commerce” as “all commerce which may lawfully be regulated by Congress.” (15 USC section 1127).  This in general terms requires a transaction between or among the states or with foreign nations.   Congress cannot regulate that is strictly within the borders of one state (although there are many cases in which what seems to be purely intrastate occurrences are deemed to have interstate implications and are thus subject to federal laws—see discussion below) and thus such a use would not be a basis for the federal registration of the claimed mark.  Often these are determinations made on a case by case situation and are subject to interpretation. 

The statute goes on to state: 

The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce—

(1) on goods when—

(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and

(B) the goods are sold or transported in commerce, and

(2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

However, as indicated, what seems to be only an intrastate use may actually be a “use in commerce.”  The Trademark Manual of Examining Procedure, section 901.03, states: 

Purely intrastate use does not provide a basis for federal registration.  However, if intrastate use directly affects a type of commerce that Congress may regulate, this constitutes use in commerce within the meaning of the Act.   See Larry Harmon Pictures Corp. v. Williams Rest. Corp., 929 F.2d 662, 18 USPQ2d 1292 (Fed. Cir. 1991) (mark used to identify restaurant services rendered at a single-location restaurant serving interstate travelers is in "use in commerce"); In re Silenus Wines, Inc.,557 F.2d 806, 194 USPQ 261 (C.C.P.A. 1977) (intrastate sale of imported wines by importer constitutes "use in commerce," where goods bearing labels supplied by applicant were shipped to applicant in United States); In re Gastown, Inc., 326 F.2d 780, 140 USPQ 216 (C.C.P.A. 1964) (automotive service station located in one state was rendering services "in commerce" because services were available to customers travelling interstate on federal highways); U.S. Shoe Corp. v. J. Riggs West, Inc., 221 USPQ 1020 (TTAB 1984) (billiard parlor services satisfy the "use in commerce" requirements, where the record showed that applicant’s billiard parlor services were advertised in both Kansas and New York); In re G.J. Sherrard Co., 150 USPQ 311 (TTAB 1966) (hotel located in only one state has valid use of its service mark in commerce because it has out-of-state guests, has offices in many states, and advertises in national magazines); In re Federated Dep't Stores, Inc.,137 USPQ 670 (TTAB 1963) (mark used to identify retail department store services located in one state was in use in commerce, where the mark was used on credit cards issued to out-of-state residents, and on catalogs and advertisements shipped to out-of-state customers).

In some cases, services such as restaurant and hotel services have been deemed to be rendered in commerce because they are activities that have been found to be within the scope of the 1964 Civil Rights Act, which, like the Trademark Act, is predicated on the commerce clause.   See In re Ponderosa Motor Inns, Inc., 156 USPQ 474 (TTAB 1968) ; In re Smith Oil Corp.,156 USPQ 62 (TTAB 1967).

Goods or Services 

There is difference in “use in commerce” depending on whether you are seeking registration as to goods or services.   But any use must be a bona fide use, not a use created solely to be able to obtain a registration. 

Thus, if you are operating from a physical location and selling goods only locally within a state, your use may not be sufficient.   But what constitutes a bona fide use between states may be subject to interpretation as discussed above and in the case that follows. 

In Christian Faith Fellowship Church v. adidas AG, the Court had to determine whether a given use was a use in “commerce” that could be the basis for a federal trademark registration.  This was a case involving the sale of “goods.” 

The Court summarized the facts as follows: 

Christian Faith Fellowship Church is located in Zion, Illinois, within five miles of the Illinois–Wisconsin border. Being located so close to the border, the Church's parishioners include both Illinois and Wisconsin residents. In January 2005, the Church began selling apparel, both caps and shirts, emblazoned with the phrase “ADD A ZERO.” The Church sold the “ADD A ZERO”-marked apparel as part of a fundraising campaign to pay off the debt on its church facility and the associated 40–acre tract of land. Illinois-based Icon Industries supplied the Church with the “ADD A ZERO”-marked apparel, which the Church sold in its bookstore.

The Church sought a federal trademark for the “ADD A ZERO” mark at the U.S. Patent and Trademark Office in March 2005. The Church filed two clothing-based trademark applications, one for use of “ADD A ZERO” in standard characters and another for a stylized design of the phrase. The Church's applications relied on actual use of the marks in commerce, not intent to use the marks in commerce. The Office granted the Church's applications and registered the marks as U.S. Registration Nos. 3,173,207 and 3,173,208.

The claimed “use in commerce” was that the Church sold 2 caps containing the claimed mark within Illinois to resident of Wisconsin. 

The Court reviewed prior cases and determined that there is no “threshold” to determine whether there is a substantial effect on commerce.  The Court ruled: 

Moving to the facts of this case, it is clear in light of the foregoing precedent that the Church's sale of two “ADD A ZERO”-marked hats to an out-of-state resident is regulable by Congress under the Commerce Clause and, therefore, constitutes “use in commerce” under the Lanham Act. We reach this conclusion without defining the outer contours of Congress's Commerce Clause powers because the transaction at issue falls comfortably within the bounds of those powers already sketched for us by the Supreme Court. The Lanham Act is a comprehensive scheme for regulating economic activity—namely the marking of commercial goods—and the “use in commerce” pre-registration requirement is an “essential part” of the Act. Lopez, 514 U.S. at 561. Further, it cannot be doubted that the transaction at issue—the private sale of goods, particularly apparel, to an out-of-state resident—is “quintessentially economic.” Raich, 545 U.S. at 25; see United States v. Morrison, 529 U.S. 598, 611 (2000) ( “[I]n those cases where we have sustained federal regulation of intrastate activity based upon the activity's substantial effects on interstate commerce, the activity in question has been some sort of economic endeavor.”). This transaction, taken in the aggregate, would cause a substantial effect on interstate commerce and thus it falls under Congress's Commerce Clause powers. Taylor, 136 S. Ct. at 2080–81; Raich, 545 U.S. at 17; Wickard, 317 U.S. at 125. The Church did not need to present evidence of an actual and specific effect that its sale of hats to an out-of-state resident had on interstate commerce. Nor did it need to make a particularized showing that the hats themselves were destined to travel out of state. See Taylor, 136 S. Ct. at 2081.

  

“[I]t makes no difference under our cases that any actual or threatened effect on commerce in a particular case is minimal.”

The standard is a little different when it comes to “services.”  Services are set forth in the list of international classification numbers separate and apart from the list of specific goods.  As the statute discussed above indicates, a “display” of the mark may also be sufficient in regard to services.  As a practical matter, this may mean that use of a mark on a web site may suffice for a use in commerce as to services even though as to goods, this might not suffice.   The TMEP in the same section above states: 

Offering services via the Internet has been held to constitute use in commerce, since the services are available to a national and international audience who must use interstate telephone lines to access a website.   See Planned Parenthood Fed'n of Am., Inc. v. Bucci, 42 USPQ2d 1430 (S.D.N.Y. 1997) , aff'd, 152 F.3d 920 (2d Cir. 1998) (Table). 

Conclusion

These are matters that should be addressed by an attorney with experience in the trademark area of the law.  Trying to “do it yourself” can lead to a rejection by the USPTO, an opposition by another claimant as in the above case, losing the trademark and other legal and financial consequences.  Remember one of the Hoffmanisms: Help me is almost always cheaper than fix me.” 

Copyright © 2016 Ivan Hoffman.  All Rights Reserved.

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This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation. 

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