Trademark Usage: Commerce And Legal Boundaries

The term use in commerce is a crucial concept in trademark law, referring to the bona fide use of a trademark in the ordinary course of trade. This means that a trademark must be employed in the sale or transportation of goods across state lines or in the provision of services to out-of-state customers. While there is no exact sales figure specified, the key standard is the applicant's good faith effort to establish trade. This can include infrequent sales of expensive items, test market sales, or ongoing shipments of a new drug to clinical investigators. Intrastate commerce does not typically qualify for trademark registration, except in cases where it affects commerce regulated by Congress, such as travel or online services. To register a trademark, applicants must provide evidence of its use in commerce, including specimens and dates of first use. Intent-to-use applications are also available for marks not yet used, allowing applicants to claim priority and more time to establish sufficient use.

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Bona fide use of a trademark

The concept of bona fide use ensures that trademark applications are not merely speculative or deceitful. Applicants must demonstrate their bona fide intent to use the trademark commercially and link it to specific goods or services. This intent must be significant and supported by evidence, such as emails, marketing materials, packaging designs, business plans, and research. The absence of documentary evidence can lead to a trademark application being rejected or opposed.

To establish bona fide use, the trademark must be used in the sale, advertising, or rendering of services, and the services must be made available or rendered in commerce. This includes offering services online, as the internet is inherently interstate. The use of the trademark must be lawful, and the goods must be sold or transported in commerce, including interstate, territorial, or international commerce.

It's important to note that the interpretation of bona fide use can vary across industries. For example, infrequent sales of large or expensive items, test market sales, or ongoing shipments of drugs awaiting regulatory approval may be considered bona fide use. However, sham transactions, such as promotional sales or providing services at a nominal fee, do not satisfy the requirement.

In summary, bona fide use of a trademark refers to the genuine and good faith use of a trademark in the ordinary course of trade, backed by evidence of an applicant's intention to commercially employ the trademark in connection with specific goods or services.

Ordinary course of trade

The definition of "use in commerce" is outlined in Section 45 of the Trademark Act as a "Bona Fide Use of a trademark in the ordinary course of trade". This means that the trademark is used in connection with the sale or advertising of goods or services, and these goods or services are sold or rendered in commerce.

The use of a trademark in commerce must be lawful and made in good faith. This means that the sale of goods or services must be made with the intention of conducting business, rather than satisfying the letter of the law to earn trademark rights. The latter is considered a "Sham Transaction" and would not meet the Bona Fide Use in Commerce Requirement. Examples of this include the sale of promotional items, the sale of goods at a nominal fee for promotional purposes, or providing services at a significantly reduced rate.

The meaning of "use in the ordinary course of trade" varies depending on the industry. For instance, it is common for an industry that sells expensive or seasonal products to make infrequent sales. Similarly, a pharmaceutical company that markets drugs to treat rare diseases will make few sales in the ordinary course of its trade.

Intrastate commerce does not provide a basis for federal trademark registration. However, if commerce in one state affects a type of commerce that Congress can regulate, this would satisfy the Trademark Act. For example, a hotel operating in one state may attract customers from another state. Offering services via the internet is also considered use in commerce as the services are made available to consumers on a national or international level.

Interstate commerce

"Use in commerce" is a term used to define the usage of a trademark in connection with goods or services that are sold or transported across state lines. This means that 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 that can flow across state lines. Interstate commerce is a requirement for federal trademark registration 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 being used in interstate commerce. This can be done by submitting a specimen or evidence of use, 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 specimen must show the actual use of the mark in commerce. Additionally, the applicant must provide the dates of the first use of the mark anywhere and the first use in commerce. The date of first use in commerce is the date when the branded goods were first sold or transported, or the services were first rendered and the mark was first used in the sale or advertising of the services.

It is important to note that the nature and extent of activity between the first use of the mark anywhere and the first use in commerce should be consistent. The only difference is that the first use anywhere can be outside the US, while the first use in commerce must take place within the country. The use in commerce must also be lawful; without lawful use, trademark priority cannot be established. For example, a pharmaceutical company selling a product without proper FDA approval may lose its trademark protection since selling a product without proper licensing is not deemed lawful use.

The definition of "use in the ordinary course of trade" can vary from one industry to another. While there is no specific quantity that constitutes meaningful sales, token or sham sales are not sufficient to meet the "bona fide use in commerce" requirement. Examples of token or sham sales include providing services for little or no money, selling only to friends and family, or selling items that are all returned. However, if there is a good faith effort to establish a trade, a small number of sales and free promotional offerings are acceptable, as long as proper documentation is provided.

Offering services online or through e-commerce websites can also constitute use in interstate commerce, as the internet, by definition, is "interstate". This means that companies that provide services to customers in multiple states through the internet or e-commerce platforms can relatively easily demonstrate use in commerce.

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Intent to use

A trademark is deemed to be "in use in commerce" when it is placed on goods, containers, packaging, or displays associated with the goods, or on the tags or labels. The trademark may also be placed on documents associated with the goods or their sale if the nature of the goods makes the placement of the mark impracticable. Additionally, the goods must be sold or transported in commerce, and this 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.

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 is considered use in commerce as the services are made available to consumers on a national or international level.

An Intent-To-Use trademark application (ITU application) allows you to apply to register a mark before using it in commerce. This is useful if you have not yet sold any goods or services under your desired mark but want to secure an early filing date. The ITU application provides a "priority date," which can be a significant advantage as it prevents later-filed applications for similar marks from blocking your application.

To show a good faith/bona fide intention to use your mark in commerce, you must provide a sworn statement in your application. This statement will be evaluated if the application record contradicts it, and it may be questioned if another person takes legal action to prevent your mark from registering. Therefore, it is important to document your efforts to start your business, including research and development, market research, and steps to acquire distributors or obtain government approval.

After filing an ITU application, you must eventually submit evidence of use of the trademark by filing a Statement of Use within specific time frames. This includes submitting examples of your relevant goods or services being sold in connection with your mark. The deadline for submitting evidence of trademark usage, including a signed declaration and specimens of use, is six months from the date of the Notice of Allowance, with the option to request six-month extensions for up to three years.

Lawful use

The lawful use of a trademark in commerce is a prerequisite for establishing trademark priority. Bona fide use of a trademark in the ordinary course of trade is essential, as defined in Section 45 of the Trademark Act. This means that the trademark should be used in connection with the actual sale or advertising of goods or services, and not merely to reserve rights.

For goods, this involves placing the trademark on the products, packaging, or associated displays and tags. The goods must be sold or transported in commerce, specifically interstate commerce, territorial commerce, or commerce with foreign countries. Intrastate commerce is generally not eligible for trademark registration, except when it affects commerce regulated by Congress, such as in the travel industry or online services.

When it comes to services, the trademark must be used in the sale, advertising, or rendering of those services, and the services must be provided in commerce. Offering services via the Internet constitutes use in commerce due to the national or international reach.

The interpretation of "ordinary course of trade" varies across industries. Courts consider the degree of good faith effort to establish trade, differentiating between actual business transactions and "sham transactions" intended solely to earn trademark rights. Examples of sham transactions include promotional sales, nominal fees, and services provided at a fraction of market value.

To register a trademark, applicants must provide evidence of lawful use, including specimens demonstrating how and when the trademark is used in commerce. This can be done through an Intent-to-Use (ITU) application, which allows for an earlier filing date and more time to establish sufficient trademark use.

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