The Federal Circuit Doubles Down On "In Commerce” Requirement For Obtaining Trademarks and Service Marks

Earlier this month the Court of Appeals for the Federal Circuit – a federal appeals court that specializes in intellectual property matters – held that a “use-based” trademark must be canceled if the trademark owner did not consummate a sale of the goods or services associated with the mark prior to applying for the mark.  Rather, if the applicant is not already selling goods or services associated with the mark it seeks, the applicant must file an “intent-to-use” application.  Like the name suggests, an “intent-to-use” application requires only that the applicant “intend” to use the mark in the future.  This distinction may seem like (and is) common sense.  But the Court’s ruling – that the consequence of filing the wrong application is losing your trademark – is significant.

 

In the case at issue, Couture v. Playdom, Inc., a gentleman named David Couture filed a use-based application to register the service mark PLAYDOM in connection with television and movie production services (a service mark is analogous to a trademark, only it is used to mark services instead of goods).  At the time Mr. Couture filed for the mark, his only use of PLAYDOM was his operation of a website hosted at www.playdom.com.  The website included a single page on which Mr. Couture advertised his production services and encouraged prospective clients to engage him.

 

Approximately one year later, Playdom, Inc. filed an application to register the identical PLAYDOM mark.  In conjunction with its application, Playdom, Inc. argued that Mr. Couture’s PLAYDOM mark should be canceled because Mr. Couture had not actually sold his production services to any clients at the time he filed for his service mark.  This, according to Playdom, Inc., rendered Mr. Couture’s PLAYDOM mark void because use-based applications for service marks must be denied if the services associated with the mark are not actually being sold at the time the application is filed.

 

The Federal Circuit agreed with Playdom, Inc.’s argument.  In its decision affirming the cancelation of Mr. Couture’s mark, the Court emphasized that use-based applications for trademarks and service marks should only be granted if the mark is actually being “used in commerce” at the time the application is filed.  Under the law, “used 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.”  The Court held that preparations to use a mark, such as advertising on a web site, do not constitute “use in commerce.”

 

The Couture v. Playdom, Inc. decision is an important reminder to trademark applicants that failure follow rules can have disastrous consequences.  Mr. Couture could have filed an “intent-to-use” application or waited to apply for his service mark until he was actually selling his services to clients.  Instead, Mr. Couture filed the wrong type of application, did not comply with the legal requirements, and lost his rights in the PLAYDOM mark.

 

Like with many things in life, when filing applications for intellectual property rights it is important to look before you leap and to know at what you are looking.

 

Article written by Michael Keenan, associate attorney with Hinman, Howard & Kattell, LLP.  To contact Mr. Keenan directly, please email mkeenan@hhk.com or call (607) 723-5341.

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