Trademarks: Use in Commerce Requirement

Introduction

As a law firm that specializes in intellectual property in the Houston-area, we are asked quite frequently about patents and trademarks.  While we routinely liaison with companies that have been successful in business for years, we also hear from startups and new entrepreneurs - we are happy to speak with startups and entrepreneurs, and even offer a free consultation with one of our IP Specialists.

With individuals or companies that are new to or have not previously considered intellectual property, I often hear the phrase “I want to trademark something.”  After a bit of discussion, what becomes apparent is that what was meant was: “I want to register my trademark”.  Or put another way, the user has already acquired a trademark by using a ‘mark’ in connection with a good or service ‘in commerce’.  This common law trademark protection can be enhanced by seeking a federal registration.

Registration - Use in Commerce

However, there are a few barriers to federal registration that need initial consideration prior to filing a registration application.  The primary and most obvious consideration is whether there is an already existing registration or pending application to which the Applicant might be denied registration via a ‘likelihood of confusion’ rejection.  Assuming this not to be a problem, the next consideration typically pertains to whether an Applicant can satisfy an ‘in use’ requirement[1].

Because Congress was not specifically designated with original power to create legislation around trademarks (as compared in contrast to the powers to regulate patents and copyrights expressed in Article 1, Section 8 of the Constitution), Congress passed the Lanham Act under the authority bestowed upon it via the Commerce Clause.  And thus resulting in the ‘in commerce’ requirement in order to receive a federal registration.

While ‘in commerce’ might seem an easy concept on the face of it, it can actually be a bit of a mirage.  Still, in most instances, some form of a bonafide use of a Mark in connection with a good or a service in interstate (i.e., state-to-state) commerce would typically be sufficient to satisfy the burden because Congress has the clear and unmistakable power to regulate interstate commerce.  So asking a Client, ‘What date did you send your goods and packaging (in connection with the Mark thereon) across state lines?’ would result in the date I would use to establish the first date of ‘use in commerce’.

However, while interstate transport and sale of goods might be still be the best course of action to establish ‘use in commerce’, it is possible to establish requisite commerce with intrastate (i.e., in-state) commerce.

Keeping the Faith

Recently the U.S. Court of Appeals for the Federal Circuit (CAFC) looked at the question of whether an intrastate sale (and a small number of sales at that - just two) could constitute sufficient ‘use in commerce’.  In Christian Faith v. Adidas AG, the CAFC determined that an intrastate sale of two hats was sufficient to satisfy the ‘use in commerce’ requirement for registration.  The Court clarified that the power of Congress to regulate commerce was broader than just that of interstate commerce, and that the test is really whether the sale activity, even if just local, could exert “a substantial economic effect”, be it directly or indirectly, on interstate commerce.

So now my question to a Client is not whether there has been an interstate sale or transport of a good, but instead whether there has been a sale or transport, in-state or out-of-state, that could have an economic effect on interstate commerce.  In theory, this has reduced the barrier of the ‘in use’ requirement, and now even local and intrastate trademark activity can be grounds for registration.

At Rao DeBoer Osterrieder, our goal is to help you understand aspects related to trademarks.  If you have questions on what you need to do to acquire trademark rights, or enhance the right you already have, you can schedule an initial Q&A by accessing our consult page.

We look forward to speaking with you!

 

© 2017 John M. DeBoer  

John DeBoer is an attorney admitted with the Texas State Bar.  He is a Partner with Rao DeBoer Osterrieder, a law firm in Houston, Texas specializing in intellectual property law. Contact John via Email.

The views expressed in this article are those of the author and do not reflect the views of Rao DeBoer Osterrieder, PLLC, or any of its clients. All rights reserved.

[1] At the time of filing for a 1(a) 'in use' basis, or after receiving an allowance for a 1(b) 'intent to use' basis