CAFC Addresses “Use in Commerce” in Playdom Decision

Date: April 15, 2015

On March 2, 2015, The U.S. Court of Appeals for the Federal Circuit (“CAFC” or “the Court”) addressed directly for the first time whether the offering of a service, without the actual provision of a service, is sufficient to constitute use in commerce under Lanham Act § 45. In deciding that it is not, the Court clarified that a registrant must both (1) offer as well as (2) provide the service at issue. Ultimately the Court affirmed the decision of the Trademark Trial and Appeal Board (“the Board”) that appellant’s registration was void ab initio. 

On May 30, 2008, David Couture (appellant) filed an application to register the service mark PLAYDOM pursuant to Lanham Act §1(a).  Also on May 30, 2008, appellant had created a website. It was one page and bore the notice: “Website Under Construction.” Significantly, no services under the mark were provided until 2010. The PLAYDOM mark was registered by the United States Patent and Trademark Office (“PTO”) on January 13, 2009.

On February 9, 2009, appellee filed an application to register the identical mark – PLAYDOM.  Appellant’s registration was cited by the examining attorney as a ground for rejecting appellee’s application. On June 15, 2009, appellee filed a petition to cancel the registration of appellant’s mark, arguing, inter alia, that appellant’s registration was void ab initio because appellant had not used the mark in commerce as of the date of the application. On February 3, 2014, the Board granted the cancellation petition, and the appeal to the CAFC followed.

To apply for registration under Lanham Act § 1(a), a mark must be “used in commerce.”  A service mark is used in commerce when “(1) it is used or displayed in the sale or advertising of services and (2) 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." 15 U.S.C. § 1127. In reviewing the statute, the Court held that, “[o]n its face, the statute is clear that a mark for services is used in commerce only when both (1) ‘it is used or displayed in the sale or advertising of services and (2) the services are rendered...'" (emphasis original).

Interestingly, appellant also argued on appeal that the Board erred in failing to allow him to amend the basis of the application to Lanham Act §1 (b) (which permits registration where “[a] person … has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce …”).  Noting that the procedures for substitution of a basis in an application applies only to the pendency of an application, and not after registration, the Court affirmed the Board’s refusal to permit appellant’s request to amend the basis of the application. The decision highlights the importance of obtaining guidance from qualified counsel early in the trademark application process.  


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