More Than Zero: Under the Lanham Act, One Interstate Sale Qualifies as Actual Use of a Trademark in Commerce

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In 2009, the U.S. Patent and Trademark Office rejected shoe manufacturer Adidas’s application to trademark the phrase “ADIZERO,” due to a likelihood of confusion with an existing mark: “ADD A ZERO,” a clothing trademark held by the Christian Faith Fellowship Church of Zion, Illinois.  The Church used the phrase on caps and other apparel that it sold for fundraising purposes.

 

Adidas then petitioned the Trademark Trial and Appeal Board (the “TTAB”) to cancel the “ADD A ZERO” marks, arguing that the Church had relied on actual use of the marks in commerce when filing its trademark applications, but had failed to actually use the marks in commerce before the March 2005 filing date.  In order to obtain a federal trademark registration, the applicant must submit evidence of bona fide use of the mark in interstate commerce.  Interstate commerce typically refers to commercial use of the mark between two states, between the U.S. and a foreign country, or commerce within a territory of the United States.  The bona fide use requirement establishes that such commercial use must be in the ordinary course of trade, and not made merely to reserve a right in a mark.

In response, the Church proffered evidence of the sale of two “ADD A ZERO” hats to a Wisconsin resident for $38.34 in February 2005. The TTAB ruled in Adidas’s favor and canceled the Church’s trademarks, holding that the one sale of the goods was de minimis and “insufficient to show use that affects interstate commerce.”  The Church appealed the TTAB’s decision to the Federal Circuit.

On November 14, 2016, the Federal Circuit reversed, holding that the Lanham Act defines “commerce” as “all commerce which may lawfully be regulated by Congress,” and noting a line of cases dating back to Wickard v. Filburn, 317 U.S. 111, 125 (1942), that speak to the breadth of Congress’s power under the Commerce Clause.  The Federal Circuit further noted that it had previously refused to adopt a de minimis test for the Lanham Act’s “use in commerce” requirement, and held that the TTAB had erred to the extent that it relied on case law suggesting the Lanham Act requires a trademark applicant to engage in additional commercial activity beyond the Commerce Clause threshold.

While this ruling helps to settle the question of how much “actual use in commerce” is needed to register a trademark, the question remains as to how much use is required to avoid abandoning a trademark, which was one of the other arguments that Adidas raised in the cancellation.  Adidas also argued that the Church’s marks’ fail to function as trademarks.  The Federal Circuit remanded the case to the TTAB for further proceedings.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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