Trademark Use in Commerce

In order for a trademark to be registered with the USPTO, the owner must declare that the trademark is being used in commerce in connection with all of the applied for goods and/or services.

 

The main purpose of trademark law is to allow consumers to identify the maker of products or the business offering services by a symbol, word, phrase or anything that allows consumers to know the source of goods or services. For example, when drivers see the famous golden arches of McDonald’s, they know who is offering a service (McDonald’s) and what to expect from that service (delicious fast food or gross food for those who do not like McDonald’s).

 

McDonald’s famous golden arches are often a sight for sore eyes for weary travelers looking for a spot for quick, easy and cheap food. By displaying signs bearing their service marks, McDonald's is using their service marks in commerce.

 

Bona Fide Use in Commerce

 

In order to be protected by common law trademark rights or to be a registered trademark, a trademark must be used in commerce. In order for consumers to be able to identify a trademark as a source identifier, consumers need to actually be able to see the trademark in use. Common places consumers encounter trademarks in use are in stores, magazines, newspapers, while driving, online, or pretty much anywhere there is a company trying to sell a product or service to consumers.

 

Section 45 of the Lanham Act defines use in commerce as:

The key phrase in the definition above is “bona fide use in the ordinary course of trade.” This has been interpreted by courts to mean the trademark has been used in connection with sales that were made in good faith to develop the business. In other words, mere token or sham use of the trademark in commerce is not bona fide use in commerce.

 

A common issue is for trademark owners to use the trademark in commerce just once so they can claim use, i.e. there is no bona fide use in commerce. In other words, the use was merely a sham so the trademark owner can say the trademark is in use. Some examples of sham trademark use in commerce include:

  • Selling a few dollars worth of clothing to a company who immediately returned the clothing to the seller;

  • Giving away a product to a company shareholder with the trademark on it at no actual charge to the shareholder;

  • Shipping goods to the spouse of a company owner, when she did not even ask for the goods;

  • Shipment of goods to friends of the company, at no costs; and

  • A sale of $2.50 followed by instructions not to use the product.

Another common area where business owners improperly claim use in commerce is by only using the trademark in inhouse documents or presentations and not presenting the trademark to consumers. For example, an internal marketing phrase of a sales team, such as “always be selling,” would not be considered used in commerce because the consumers do not see or hear the phrase used.

 

Use in Commerce Must be Commerce Congress can Regulate

 

In order to receive a United States Patent and Trademark Office (USPTO) trademark registration, the use in commerce must be use that Congress can regulate. Generally speaking, Congress can regulate any interstate or transnational sales, or commerce in Washington D.C.

 

For services, Congress can regulate services provided by one company, in one state, to an out of state resident. So if a restaurant in Ohio serves a family on vacation from Michigan, Congress can regulate that business because of the interstate nature of the transaction. Congress has broad authority to regulate service industries.

 

What Congress can regulate in terms of goods is a little more restricted. Congress can regulate goods made in one state and sold or shipped to another state. However, merely selling a product made in one state and sold in that same state to an out-of-state resident is probably not something Congress can regulate. For trademark owners of goods, shipping a sold product across state lines will satisfy the use in commerce that Congress can regulate requirement.

 

Use in Commerce Checklists

 

With a general outline of what constitutes use, here are somethings to know and avoid:

  • Extended periods of non-use can lead to trademark abandonment and loss of rights;

  • Make sure there is interstate use in commerce, i.e. goods are shipped across state lines or services are rendered to people from out of state;

  • Do not merely use your trademark internally;

  • For every good and/or service listed in a trademark application, there must be bona fide use in commerce or fraud has been committed on the USPTO;

  • Sell your goods and services to people other than board members, stockholders, company officials etc…, offer the goods and services to the relevant consuming public; and

  • When in doubt whether bona fide use in commerce has occurred, wait until after more sales to apply for a trademark application.

 

Do you have any questions about use in commerce for trademark law? Leave a comment below or contact us today and we will answer your question as best we can.

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