Court: One Sale Is Enough to Show Trademark Use in Commerce

Clients seeking trademark registrations often ask how much use of a mark in interstate commerce is needed for success. Earlier this month the Federal Circuit answered that question when it reversed a decision by the Trademark Trial and Appeal Board (“TTAB”) that cancelled a trademark of a church in Zion, Illinois at the behest of apparel giant Adidas.

Trademark registration applicants submit evidence of “bona fide use of the mark in interstate commerce,” which generally means commercial use of the mark between two states. The bona fide use must be in the ordinary course of trade, and not a transaction made merely to reserve a right in a mark.

Adidas suffered a rejection of its application in 2009 for the phrase “Adizero” based on a likelihood of confusion with the existing mark “Add a Zero.” The “Add a Zero” mark is used on caps and other apparel sold by the Christian Faith Fellowship Church. With the attitude of any Goliath, Adidas decided to file a cancellation proceeding instead of starting from the creative drawing board with a new mark.

In the cancellation proceeding the TTAB rejected the Church’s evidence of the sale of two “ADD A ZERO” hats to a Wisconsin resident for $38.34 before the date of filing, and held that the one sale of the goods was de minimis and “insufficient to show use that affects interstate commerce.”

On appeal, the cancellation was reversed. The court first looked at the meaning of “commerce” in relation to trademark registration and held that the Lanham Act defines “commerce” as “all commerce which may lawfully be regulated by Congress.” The court also said that it previously refused to adopt a de minimis test for the “use in commerce” requirement, and that the TTAB’s reliance on any precedent requiring a trademark registration applicant to engage in commercial activity beyond the Commerce Clause’s minimum threshold was in error.

The take away for small business owners: when goods are involved in a trademark registration, it is the quality, not the quantity, of the commercial activity that matters. Make sure that the evidence of use offered was not a sham transaction consummated outside of the ordinary course of business and done only while attempting to secure the mark.

Photo by Darksteel (who says on Wikimedia Commons “I created this work entirely by myself”); Public domain, via Wikimedia Commons.