Isabella Carter
Understanding what constitutes a trademark being used in commerce is essential for businesses to protect their intellectual property. In the US, a trademark is considered a source identifier for goods and/or services, and to establish trademark rights, the owner must generally be the first to use the mark in commerce on specific goods or services. This involves the bona fide use of the trademark in the ordinary course of trade, including the sale and transportation of goods across state lines or the provision of services to out-of-state customers. The interpretation of use in the ordinary course of trade varies across industries, and lawful use is required to establish trademark priority. The trademark application process includes specifying the dates of first use anywhere and in commerce, with the commerce type being regulated by Congress, such as interstate or territorial commerce.
| Characteristics | Values |
|---|---|
| Definition of "use in commerce" | Bona fide use of a trademark in the ordinary course of trade |
| Use in commerce for services | Use of the trademark in connection with the sale or advertising of services, and the services are rendered in commerce |
| Commerce type | Interstate commerce, territorial commerce, commerce within the District of Columbia, commerce with Indian tribes, or commerce between the U.S. and a foreign country |
| Lawful use | Without lawful use, trademark priority cannot be established |
| Goods used in commerce | Sold and transported within the United States in the ordinary course of trade |
| Trademark owner | Must be the first to use a mark in commerce on particular goods or services |
| Trademark use in advertising | Advertising does not constitute use in commerce unless there is an ability to perform a sale |
| Transportation | Requires goods to be available for public use |
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What You'll Learn
Bona fide use in the ordinary course of trade
The definition of "use in commerce" was amended by the Trademark Law Revision Act of 1988 (TLRA) to include the phrase "the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark." This amendment aimed to eliminate the practice of "token use," where a trademark was used solely to reserve rights in a mark. The meaning of "use in the ordinary course of trade" varies from one industry to another. For example, it might be ordinary for an industry that sells expensive or seasonal products to make infrequent sales. Similarly, a pharmaceutical company that markets a drug to treat a rare disease will make correspondingly few sales in the ordinary course of its trade.
To demonstrate Bona fide use, it is essential to show that the trademark is being used in conjunction with the sale of goods or services and that these goods or services are sold in interstate commerce. Courts consider whether a sale was made for the purpose of actually conducting business or simply satisfying the letter of the law to earn trademark rights. The latter are considered "Sham Transactions" and do not satisfy the Bona Fide Use requirement. Examples of sham transactions include promotional offerings, such as providing services at a nominal fee or free of charge.
It is important to note that trademark law is primarily concerned with whether a mark is a source identifier. In other words, when a consumer sees a trademark on a good or service, do they understand its source? If the mark is only being used casually and sporadically, it may not be considered a bona fide use in the ordinary course of trade.
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Lawful use
The lawful use of a trademark is an essential aspect of establishing trademark rights and registration. In the United States, trademark law defines "use in commerce" as the bona fide use of a trademark in the ordinary course of trade. This means that the trademark must be used in connection with the sale or advertising of goods or services, and the goods or services must be transported or rendered in commerce.
To be considered lawful, the use of a trademark must comply with the regulations set by Congress. This includes interstate commerce, territorial commerce (trade between the U.S. and its territories), commerce within the District of Columbia, commerce with Indian tribes, and commerce between the U.S. and foreign countries. The goods or services must be shipped across state lines or provided to customers across state lines, often referred to as "use in commerce."
In addition, the trademark must be used in good faith with the intention of conducting business. "Sham Transactions," where sales are made solely to satisfy the letter of the law and gain trademark rights, do not constitute lawful use. Examples of Sham Transactions include promotional giveaways, sales of items at a nominal fee, or providing services at a significantly reduced price.
The interpretation of "use in the ordinary course of trade" varies across industries. For example, in the pharmaceutical industry, shipping a drug to clinical investigators during the FDA approval process is considered ordinary, while in the travel industry, a hotel operating in one state can attract customers from other states, thus qualifying as interstate commerce.
To establish trademark rights, an applicant must provide the dates of first use of the mark, both anywhere and specifically in commerce. These dates refer to when the goods were first sold or transported or when the services were first rendered and advertised under the trademark. Lawful use of a trademark is crucial for establishing trademark priority, and failure to comply with relevant laws and regulations may result in the loss of trademark protection.
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Interstate commerce
To be eligible for trademark protection in the United States, commerce must be of a type that can be regulated by Congress. This includes interstate commerce, territorial commerce, commerce within the District of Columbia, commerce with Indian tribes, or commerce between the U.S. and a foreign country. Interstate commerce refers to the use of a trademark in connection with goods or services that are sold or transported across state lines. To be considered "used in interstate commerce," the trademark must be used in a way that demonstrates the trademark owner's use of the trademark in connection with the sale or transportation of goods or services in commerce capable of flowing across state lines.
For example, if a company produces and sells a product in one state to a customer in another state and then ships that product to the customer in the other state, the trademark used to identify the product is considered to be "used in interstate commerce". Similarly, if a company operates an e-commerce website that offers goods for sale to customers nationwide, the trademark used to identify the source of the goods sold is considered to be "used in interstate commerce". It is important to note that "used in interstate commerce" is a requirement for federal trademark registration on the Principal Register with the United States Patent and Trademark Office (USPTO). Trademarks that are not "used in interstate commerce" are not eligible for federal registration and cannot be protected under federal trademark law.
To register a trademark with the USPTO, an applicant must provide evidence that the mark is currently in use in interstate commerce. The applicant must submit a specimen or evidence of use showing how the mark is used in connection with the goods or services for which registration is sought. The specimen must show the actual use of the mark in commerce, such as a label, tag, packaging, or advertisement displaying the mark on the goods themselves or in connection with the sale or advertising of the goods. The USPTO has specific requirements for what constitutes an acceptable specimen or evidence of use, and these requirements can vary depending on the type of mark and the goods or services involved.
It is worth noting that intrastate use of a mark will usually not qualify as use in commerce unless the intrastate use is of a type that would, when taken in the aggregate, have a direct effect on interstate commerce. For example, the travel and hospitality industries often involve interstate commerce. A hotel operating in one state can entice customers from another state to utilise its services. Offering goods and services over the Internet has also been held to constitute use in commerce since the goods and services are available to consumers throughout the United States.
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Use in advertising and marketing
Advertising and marketing materials displaying a trademark must reference the services identified in the application. For example, a trademark used in a television or radio commercial, on a billboard, or in a paper or online advertisement or website, does not constitute use in commerce unless the trademark is connected to the sale of a good or service.
The trademark must be used in the ordinary course of trade, and not merely to reserve a right to the mark. For instance, if a website advertises a good or service without presenting an ability to purchase it, the trademark is not considered to be used in interstate commerce. Similarly, an internal distribution between a manufacturer and regional managers or a distributor is not a sale or use in commerce. The goods must be presented for public use to potential wholesale or retail customers.
The trademark must be placed on the goods, on the containers of the goods, displays associated with the goods, or on the tags or labels. If the nature of the goods makes the placement of the mark impracticable, then it must be placed on documents associated with the goods or its sale. The goods must be sold or transported in commerce.
In the case of services, there must be use of the trademark in connection with the sale or advertising of the services, and the services must be rendered in commerce. Offering services via the Internet constitutes use in commerce because the services are made available to consumers on a national or international level.
The meaning of "use in the ordinary course of trade" varies from industry to industry. For example, in the pharmaceutical industry, marketing a drug to treat a rare disease will result in few sales in the ordinary course of trade, and the company's shipment to clinical investigators during the Federal approval process will also be in its ordinary course of trade.
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Transportation
For local business owners, understanding trademark registration and transportation is essential. Federal trademark law in the United States derives its authority from the Commerce Clause of the Constitution. This means that for the U.S. Patent and Trademark Office (USPTO) to grant federal trademark registration, the trademark must be in use in commerce across state lines, between states, or between a state and a foreign country. Local businesses can achieve this by demonstrating that their customers or goods are transporting across state lines.
In the context of transportation, the goods must be available for public use. In-house experimentation, evaluation, or preparation do not constitute bona fide shipments. However, shipping goods to individuals or groups outside the company, such as sending a new drug to clinical investigators, may qualify as transportation use in commerce. Additionally, imported or exported goods typically meet the use in commerce requirement, and the mark owner must authorize transportation through interstate commerce.
It's important to note that intrastate commerce alone does not qualify as "use in commerce" under the Lanham Act (Federal Trademark Act). However, if an intrastate business affects commerce that Congress can regulate, it would qualify as "interstate commerce." For example, a local travel agency booking interstate or international travel would fall under this category. The mark must be present on the goods or associated with the offered services when they are sold or transported to the public.
To establish trademark rights, the trademark owner must generally be the first to use the mark in commerce on goods or services. The USPTO requires the date of first use in commerce, which is when the goods were first sold or transported or when the services were first rendered under the trademark. This date must be before the application filing date. Additionally, meaningful sales are essential, and token or sham sales, such as selling only to friends and family, are not sufficient to meet the "bona fide use in commerce" requirement.
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Frequently asked questions
According to Section 45 of the Trademark Act, "use in commerce" means the "bona fide use of a mark in the ordinary course of trade". This means that the trademark must be used in the transporting or selling of merchandise out of state or by providing services to customers who live out of state.
For goods, use in commerce means that the product is sold and transported within the United States in the ordinary course of trade. The trademark should be displayed on the product itself or on external materials such as packaging, tags, and labels.
For services, there must be use of the trademark in connection with the sale or advertising of the services, and the services must be rendered in commerce. Offering services via the internet constitutes use in commerce because the services are made available to consumers on a national or international level.
