IP Law Bulletin

With the increased use of technology and the ease of advertising on the Internet, it is becoming more common for manufacturers to promote their products or services before they are available to the public. Trademark owners often file marks immediately when a promotion begins—that is, before the good or service is offered for sale. The question, then, for both trademark owners and the USPTO is whether this constitutes “use” of the trademark. Historically, courts have answered this question differently for a goods mark and a service mark.

For a goods mark, use can be shown if the advertising campaign or taking of orders for a product that will soon be on the market associates the mark and goods in the minds of the public. T.A.B. Systems v. PacTel Teletrac, 77 F.3d 1372 (Fed. Cir. 1996). Accordingly, a website that displays the mark, the product, and a means to buy the product has been held to be sufficient to establish use of a goods mark. In re Quantum Foods, Inc., 94 U.S.P.Q.2d 1375, 1380 (T.T.A.B. 2010). Of course, a determination of whether use has been shown may depend on the type of good for which the mark is being used. For example, pharmaceuticals present a special issue on use of a trademark in commerce. Pharmaceuticals require regulatory approval before being sold commercially, but before the product is approved it undergoes clinical trials and testing. Because clinical trials and testing are in the “ordinary course of trade,” some courts have held that this is sufficient use for a pharmaceutical product. At least one court has noted that the “ordinary course of trade” varies in each industry. See G.D. Searle & Co. v. Nutrapharm, Inc., No. 98-6890 (S.D.N.Y. Oct. 29, 1999); see also Automedx, Inc. v. Artivent Corp., 95 U.S.P.Q. 2d 1976 (T.T.A.B. 2010) (finding use where sales were made for purposes of testing and prior to FDA approval).

For a service mark, the issue is more complex. In 2009, the Federal Circuit held that the use in commerce requirement is not met when an applicant uses a service mark in the preparatory stages of development, i.e., advertising, but never offers the service to the public. See Aycock Eng’g, Inc. v. Airflite, Inc., 90 U.S.P.Q.2d 1301 (Fed. Cir. 2009). Then, in 2015, the Federal Circuit again rejected an argument concerning “use” for a service mark where the service was only advertised and had actually never been rendered. In Couture v. Playdom, Inc., David Couture filed an “actual use” application for the mark “Playdom,” even though he only had a website advertising educational services and was not, in fact, rendering any services at the time. 778 F.3d 1379 (Fed. Cir. Mar. 5, 2015). The Trademark Trial and Appeal Board (TTAB) canceled Couture’s registration for lack of actual use and the Federal Circuit affirmed. The Federal Circuit held there was no evidence showing that Couture had rendered services to customers, and, during depositions, he admitted that he did not begin rendering services using the mark until about two years after filing the application. The Federal Circuit clarified that rendering services is necessary to demonstrate use, and “merely post[ing] a website advertising . . . readiness, willingness, and ability to render said services” is not enough.

For now, the standard for demonstrating use of a service mark appears to be higher than for a goods mark. For a service mark, the services must be rendered at the time of alleged use to establish use, and mere advertising is not enough. For goods, it is acceptable if the public associates the mark and the goods, even if the goods are merely being advertised for an approaching distribution. Of course, if a trademark applicant is unsure about whether actual use has occurred, the applicant may file an intent to use trademark application to stake claim to the early priority date. It is generally recommended to be conservative in claiming use, especially when it comes to service marks, because an improper claim of use can result in a loss of trademark rights. Accordingly, a conservative approach may ultimately afford the strongest trademark protection.

This update was prepared by Nutter's Intellectual Property Department. For more information, please contact your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.