Satisfaction of Lanham Act Use “in Commerce” Requirement Does Not Require Much
In a decision addressing the use “in commerce” requirement under the Lanham Act, the US Court of Appeals for the Federal Circuit reversed and remanded a Trademark Trial and Appeal Board (TTAB) decision cancelling a trademark registration, explaining that the registrant’s de minimis use of the trademark in commerce prior to filing its use-based trademark applications was not a failure to use the registered mark in commerce. Christian Faith Fellowship Church v. Adidas AG, Case No. 16-1296 (Fed. Cir., Nov. 14, 2016) (Stoll, J).
In March 2005, Christian Faith Fellowship Church (CFFC) filed two use-based applications for the mark ADD A ZERO (standard characters and stylized) for certain clothing items. Four years later, adidas AG (Adidas) sought to register the trademark ADIZERO for clothing. The US Patent and Trademark Office refused to register Adidas’s mark because of a likelihood of confusion with CFFC’s registered marks. Adidas then petitioned the TTAB to cancel CFFC’s registrations on several grounds, including that CFFC’s de minimis use constituted a failure to use the trademarks in commerce before they were registered, and that CFFC had abandoned its trademarks through non-use.
The TTAB granted Adidas’s petition, holding that CFFC’s use of the mark only twice in interstate commerce did not satisfy the use “in commerce” clause under the Lanham Act. The Lanham Act defines “commerce” as “all commerce which may be lawfully regulated by Congress,” meaning all commerce subject to Congress’s power under the Commerce Clause. Congress’s Commerce Clause power, in turn, includes the power to regulate interstate commerce. The Supreme Court of the United States has broadly interpreted the Commerce Clause to include not only purely interstate transactions, but also transactions that have a substantial effect on interstate commerce. CFFC appealed.
On appeal, the Federal Circuit found that the single sale in interstate commerce (a sale of two hats from CFFC’s Illinois store to a Wisconsin resident) constituted sufficient use “in commerce” to support CFFC’s use-based trademark applications. The Court stressed that this “transaction . . . fell comfortably within the bounds of the [Commerce Clause] powers already sketched out by the Supreme Court.” The Court criticized the TTAB’s reasoning that the sale was de minimis and not sufficient to prove use “in commerce,” stating that such a determination ran counter to the Supreme Court’s prior Commerce Clause decisions—namely, Gonzales v. Raich, which held that the “de minimis character of individual instances” subject to the Commerce Clause “is of no consequence.” The Court made clear that its reasoning regarding the in commerce requirement applied equally to trademarks (for goods) and service marks. To the extent that earlier decisions of the TTAB held that the Lanham Act required commercial activity beyond what was sufficient to be subject to Congress’s Commerce Clause power, the Court stated they were “incorrect.” “[T]he definition of commerce in the Lanham Act means exactly what the statute says, i.e., ‘all commerce which may lawfully be regulated by Congress.’”
The Federal Circuit thus reversed the TTAB’s cancellation of CFFC’s registrations and remanded the matter to the TTAB to address Adidas’s other grounds for cancellation—namely, whether CFFC had abandoned the trademark through non-use.
Practice Note: This decision confirms what many already believed: almost any bona fide transaction will qualify as use in commerce. Trademark owners should keep records of the use that is the basis for their use-based trademark application in the event their registrations are challenged on this ground. Once a trademark registration is secured, trademark owners must be careful to not abandon their trademark by failing to continue to make bona fide use of their mark.