Cancelation of Trademarks due to First Actual Use After ApplicationMarch 4, 2015

Federal registration of a trademark provides a number of benefits to the trademark owner, including protection throughout the entire country, advantageous litigation position—for example presumption of validity and enhanced monetary damages—and enlistment of the U.S. Customs Service to stop importation of counterfeit goods. The federal trademark system provides two separate avenues for protecting a mark: (1) registration of a mark that is already used in commerce, and (2) certification of a bona fide intent to use the mark in commerce (ITU application), followed by a later demonstration of actual use. However, failure to use the correct registration scheme can result in invalidation of the registration, and loss of the benefits of federal protection.

In its recent decision in Couture v. Playdom, the Federal Circuit Court of Appeals held that a trademark that was registered under the standard (i.e. non-ITU) system, but was not actually used in commerce until after the registration, was void. The mark owner filed a registration including, as a specimen showing use of the mark, a screen capture of the mark owner’s website. At the time of filing, the website was a single page that advertised the mark owner’s readiness, willingness and ability to render services. The mark owner did not, however, provide any services under the mark until after the mark had been registered. The mark was the subject of a cancelation proceeding, and the Trademark Trial and Appeal Board (TTAB) canceled the registration as void from the time of filing because the owner had not used the mark in commerce as of the date of the application.

On appeal, the Federal Circuit affirmed the TTAB’s cancelation. The court held that “use in commerce” for registration requires actual use in conjunction with the services described in the application, and not merely offering services. The court further noted that, although ITU applications are available, and procedures for substitution of an ITU application for a standard application are available, such substitution is specifically provided for prior to publication and registration. As a result, once a standard trademark application is published, it can no longer be converted into an ITU application.

This case highlights the need for mark owners to understand when and how they use their marks. For the incautious, failure to fully consider and communicate these use issues may result in loss of trademark rights.

The full opinion is available here.