So, rendering (offering) your services in multiple states satisfies this requirement. Yet also it seems that the requirement can be met without offering your services in multiple states or in multiple countries, by “rendering your services in commerce.”

Rendering Trademarked Services in Commerce

So what the heck does rendering the services in commerce mean? Well, only trademarks used in interstate commerce are entitled to federal trademark registration, because the federal government only has the power to regulate interstate commerce (it’s in the Constitution!). “In commerce” here is differentiated from commerce in multiple states or in the U.S. and a foreign country, so it mean intrastate service that nevertheless qualifies as “interstate” commerce.

Intrastate Hotel, Dining, and Automotive Services Are Interstate Commerce

The TMEP explains: “if intrastate use directly affects a type of commerce that Congress may regulate, this constitutes use in commerce within the meaning of the Act.” TMEP § 901.03. Thus, automotive, restaurant, and hotel services are generally considered to be used in commerce because they are available to customers traveling interstate on federal highways, and thus are subject to federal regulation.

Intrastate Services That Target or Serve Out-of-State Customers Qualify As Interstate Commerce

Other services offered in only a single state may also be considered to be rendered in commerce if a sufficient inter-state nexus can be shown. Evidence that the services are advertised in multiple states or are used by residents of different states is effective in demonstrating that the services have been rendered in commerce.

Internet Services Are Interstate Commerce

Services offered over the Internet are considered interstate commerce, “since the services are available to a national and international audience who must use interstate telephone lines to access a website.” TMEP § 901.03

Summary

In order to register your trademark with the United States Patent and Trademark Office, you must use your trademark in connection with services offered in interstate commerce. That means the services must either be offered in multiple states, or in the U.S. and a foreign country, or that the services are offered in a single state, but to out-of-state customers.

And if your services do not fall under any of those possibilities, but you can think of another way to tie your services to interstate commerce, the Trademark Office could allow your trademark to be registered as well.

So what does it mean to use a trademark “in commerce”? Is it sufficient to use your trademark on your website? The answer is, sometimes yes and sometimes no. It depends on whether your mark is a plain old trademark or a service mark. A service mark is a trademark that is used to sell services, rather than physical products.

To register a service mark, you must show that you have used the mark in the advertisement or sale of a service to prospective customers and that you were prepared to provide the service at the time of the advertisement.

The Rule Regarding Use in Commerce of a Service Mark

TMEP § 901.01 states that “a mark shall be deemed to be in use in commerce… on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.”

In other words, for a service mark use in commerce requires:

1. Display of the service mark in the sale or advertisement of services, and
2. Rendering the services in commerce or in multiple states or the U.S. and a foreign country

Let us ignore the second part of #2 for now (it’s a doozy) and parse the rest of that.

1) Display of the Service Mark in the Sale or Advertising of Services

To successfully claim use of your service mark and achieve a federal registration, you must show that you have used your mark in an advertisement or sale of your services. This is generally an easy requirement to fulfill. Display of your service mark on your website, where your website advertises your services, generally is sufficient to satisfy it, and is the most popular way to do so.

Advertisements Are Not Sufficient to Show Use in Commerce For Trademarks

Note that this is in contrast to the rule for trademarks (used on goods/products), where use in an advertisement is NOT sufficient and therefore use on a website often does NOT satisfy the requirement. Many business owners get in trouble with this distinction and do not understand why their website is not sufficient to show use. Nevertheless, it usually is not (consult your attorney to find out for sure).

Mere Preparation to Use Is Not Sufficient to Show Use in Commerce of  a Service Mark

What does not satisfy this requirement is preparation to use the service mark. “[m]ere adoption (selection) of a mark accompanied by preparations to begin its use are insufficient . . . for claiming ownership of and applying
to register the mark.” Aycock Engineering, Inc., v. Airflite, Inc., (Fed. Cir. 2009) (citing Intermed, 197 USPQ at 507).

Such acts as soliciting the support of others, issuing a detailed announcement using the service mark to inform and update individuals about the service’s status, and hiring a fundraising firm to raise money for the service are insufficient.

Use in Commerce Requires Advertisement or Sale to Customers

Advertising your service to potential partners, investors, or affiliates is not sufficient to show use in commerce. Rather, “there must be an open and notorious public offering of the services to those for whom the services are intended.” Aycock Engineering, Inc., v. Airflite, Inc., (Fed. Cir. 2009) (citing Intermed, 197 USPQ at 507)(emphasis added).

2) Rendering the Services

Mere advertisement of your services, in and of itself, is not sufficient to satisfy the federal trademark registration requirement of use in commerce for service marks. You must also actually be prepared to provide the services you are advertising.

Advertising a Service You Will Soon Provide is NOT Sufficient

“Without question, advertising or publicizing a service that the applicant intends to perform in the future will not support registration. Instead, the advertising or publicizing must relate to ‘an existing service which has already been offered to the public’… The use in advertising which creates a right in a service mark must be advertising which relates to an existing service which has already been offered to the public.” Aycock Engineering, Inc., v. Airflite, Inc., (Fed. Cir. 2009) (citing Greyhound Corp. v. Armour Life Ins. Co., 214 USPQ 473, 474 (TTAB 1982))

The Services Advertised and Rendered Must Be The Services Listed in Your Trademark Application

Be careful when listing the services you provide or intent to provide. You will have to show that you have advertised and are ready to perform THOSE services. The listed services (or goods) can be changed, but only to narrow or clarify what you have listed, and never to broaden the list.

Thus, going from “Clothes” to “shirts” is okay, but going from “shirts” to “clothes” is not. That is one reason to leave your listing of services broad if you can, particularly if you are uncertain exactly how to describe the services you are offering or what service you actually will provide.

In Aycock Engineering, the registrant’s federal trademark registration was canceled because his activities did “not constitute a service that falls within the scope of our definition of the recitation of services.” Mr. Aycock’s listed services covered  “only the arranging of flights between an air taxi operator and a passenger”, whereas his activities involved “efforts to arrange a network of air taxi operators.”

Conclusion

The failure to properly show use in commerce of your trademark can result in rejection of your application for registration or cancellation of your federal registration years later. Do not take chances with formalities like these, work with a trademark attorney early on to ensure the strength of your trademark rights, and learn from the mistakes of others.

A trademark registration expires after ten years. If you wish to keep your trademark registration active, you must file an Application for Renewal of your registration under § 9 (See TMEP § 1606 ) before the expiration of this ten year period.

The window for filing this Renewal opens one year before expiration of the mark and a Renewal may also be filed within six months after the expiration of your mark (the “grace period”) with an additional fee. Thus, you may file a Renewal any time between nine and ten years after registration, or between ten and ten and a half years after registration with payment of the additional fee. A declaration or affidavit of continued use under § 8 must also be filed within the same period as the Application for Renewal of registration (See TMEP § 1604).

Each Renewal extends the life of the registration for ten years, thus a new Renewal must be filed before the end of twenty years after registration, thirty years, etc., if you do not wish for your registration to expire.

Reinstating a Trademark Registration

If you forget about the renewal and miss the ten-and-a-half year deadline, your registration will expire. In that case, there is no way to revive or reinstate it. Your registration is simply gone and if you want another one, you will have to file a new application and undergo examination once again. Examiners are not bound by previous registration decisions of the Trademark Office, so you could encounter some difficulty with your new application.

The only time that a trademark registration can be reinstated once it has expired for failure to file a renewal application or declaration of use is if you did file the required documents and the expiration was due to a Trademark Office error (See TMEP § 1712.02). If, for example, the Trademark Office lost the paperwork, you would be able to reinstate your registration.

In that case, a request for reinstatement  must be filed within two months of receiving notice that your registration was canceled.

So, be careful not to miss any deadlines! The Trademark Office will not warn you when they are approaching. Consider using a trademark attorney or trademark management company to keep track of the deadlines for you.

What should you do? Do you have to drop the name? Change it? Contact First User? Or can you just go ahead with your registration and marketing plans as if nothing had changed? There are a few factors you must weight when making that decision:

1. What First User can do to you if they find out you are using a similar trademark
2. How likely First User is to find out or decide to go after you
3. Just how good the name you came up with is

The first factor is the potential cost to you of using the trademark, the second is the probability of incurring that cost, and the third factor is the benefit from using that trademark. You can then make the classic calculation: is the potential cost multiplied by the probability of incurring that cost greater than the expected benefit to you?

1) Penalties for Trademark Infringement

If you decide to begin using a trademark (business name, logo, brand name, etc.) that is confusingly similar to the trademark of another business in the U.S., that other business can cause you a lot of problems. It can stop you from registering your trademark and it may be able to stop you from using the trademark.

• Preventing You From Registering Your Trademark

Trademark Examining Attorney Refusal to Register

The Trademark Office will not register a trademark if it is confusingly similar to another registered trademark. Therefore, if First User has registered their trademark, it may be difficult for you to get your application allowed by the PTO. The Trademark Examining Attorney assigned to your application is likely to refuse registration of your mark.

Trademark Opposition / Cancellation

Even if the PTO allows your trademark application, First User can oppose your registration, regardless of whether it has a registration and regardless of where in the U.S. it is located. A trademark opposition is an administrative proceeding before the Trademark Trial and Appeal Board (TTAB) and is essentially a mini-trial.

To go all the way through an opposition you can expect to spend $50,000 to $100,000, depending on what law firm you use. If First User can prove that your mark is confusingly similar to theirs and that it began using the mark in commerce before you, it is likely to succeed in preventing your registration.

Even if your mark is successfully registered without an opposition, First User can come back and petition to cancel your registration up to five years later. A cancellation proceeding is very similar to an opposition in expense, etc.

• Preventing You From Using Your Trademark

Although registering your trademark is very important, the right to use your trademark is even more important. If First User has registered their trademark, they have exclusive rights to that mark nationwide. Regardless of whether you are operating in the same geographic area, your use of a confusingly similar mark in the United States constitutes trademark infringement.

In that case, First User can sue you and, if it can prove confusing similarity, force you to stop using your trademark. You would then have to redo your marketing materials and marketing campaign and devote a lot of money to rebranding.

As you are probably beginning to understand, it is generally a bad idea to use a trademark that seriously conflicts with an existing registered trademark. More frequently, you will have to make a decision regarding a trademark that is used by another business, but not registered. In that case, you can only be sued for trademark infringement if you do business in the same geographic area as First User, and only in state court. First User will have to prove confusing similarity and first use.

Defending a trademark infringement lawsuit can easily run six figures. Monetary damages could also be awarded against you, although they are uncommon.

2) Likelihood That Trademark Infringement Will Be Discovered or Prosecuted

Whether First User is likely to discover your use of a similar mark or pursue you if they do depends on a number of factors, including:

• Is First User big or small?
• Is First User brand-focused?
• How close are the marks / how strong is First User’s legal position?
• Does First User do business in your geographic area?
• Do you have a significant web presence?
• Is First User a direct competitor?
• How big will your business become, and how fast?

These factors will be discussed in more depth in a subsequent post. Generally, large corporations are very likely to find out about trademark infringement and take action, whereas very small businesses are very unlikely to.

If you are able to register your trademark and keep that registration for five years, your registration will become incontestable, meaning that First User will no longer be able to cancel it for confusing similarity to their own mark. Your registration will also allow you to prevent First User from expanding beyond their geographic area.

3) How Important Is It To Keep Your Trademark?

Finally, you should consider the importance of the trademark you have selected. Are you wedded to it? Would you be open to tweaking it in order to differentiate it from First User’s trademark? If there are good alternatives and you have nto spent much money on putting together your branding materials, often it is better to avoid potential conflicts by choosing a new trademark.

On the other hand, if you have a really good and meaningful trademark that you have spent money to develop and build a marketing campaign around, it may be worth taking the risk of going ahead with it. This is particularly true when the risk is low, for example if First User is a small business that is not a direct competitor and is unlikely to discover the similarity.

]]> http://patents101.com/2010/01/trademark-business-name-in-use/feed/ 0 http://patents101.com/2009/11/trademark-basics-for-businesses/ http://patents101.com/2009/11/trademark-basics-for-businesses/#comments Fri, 13 Nov 2009 23:23:47 +0000 Clifford D. Hyra http://patents101.com/?p=505 I recently recorded the following video for Legal River concerning the basics of trademarks for business owners (and others!)