Trademark use in Commerce: To register a trademark, the trademark must be used either internally or internationally. Only trademarks that are used to sell goods/services that involve different U.S. states or countries other than the U.S. may be registered as a trademark. The trademark must be used in connection with the goods/services offered. Acceptable use is generally defined as follows:
In the case of goods: the mark must appear on the goods, the container for the goods or the displays associated with the goods, and the goods must be sold or transported on a commercial basis. The product must be sold/sent across national lines to qualify as an interstate trade. The product must be sold/sent to another country to qualify for international trade.
For services: the mark must be used or displayed when the services are offered or advertised, and the services must be provided on a commercial basis. To qualify as an interstate trade, the service must be provided to those in another state, or the service must have an impact on interstate trademark use in commerce (for example, hotels or gas stations). The service must be offered to those in another country who are eligible for international trade.
How much use is enough for that?
Examples of inadequate usage may involve the use of tokens or limited use for the sole purpose of promoting a trademark use in commerce application. While there is no bright-line test as to whether a unit or dollar amount is sufficient to support bona fide use in the ordinary course of trade, the courts have been able to find insufficient use in cases such as a single shipment, a single sale of a handful of units, a single transaction over years, etc.
Historically, the word “usage in trade” refers to the selling of goods or services that have crossed national (interstate) boundaries as opposed to sales made within the state (intrastate). Today, the distinction between interstate and intrastate is less important in the light of e-commerce and the widely accepted theory that even intrastate transactions may affect interstate trade.
Sales to foreign countries may also be considered for commercial use.
What’s with the pre-sales activity?
In the case of software products such as mobile apps, commercial use generally refers to the launch of the product as opposed to mere marketing. Beta testing may be sufficient to qualify as commercial use, depending on the level of activity.
Crowdfunding projects are likely to be deemed pre-sales practices that do not meet the criteria of sales or transport.
What if there’s no need yet?
The applicant should file an Intent-to-Use application for a trademark that has not yet been used. In the case of borderline rates of operation, filing an ITU application is a better option as it gives the applicant an earlier filing date (i.e. ‘priority’) and more time to make appropriate use of the mark before sending proof of usage to the USPTO.
What is the difference between the date of first use elsewhere and the date of first use in trade?
The date of first use somewhere in the day when:
- Goods were first sold or transported, or services were first rendered under the trademark;
- Such usage was legitimate and in the ordinary course of trade
The date of first use requires use in foreign countries.
The date of first commercial use generally has the same two requirements as above, except that the activity must have taken place in the USA.
TRADEMARK USE Includes Substantial SALES IN COMMERCE
A fundamental provision in trademark law is that the use of the trademark must include Bona Fide Sales of Goods / Services; Bona Fide Sales, which means, of course, a large number of sales. The idea here is that the mere sale of a single product does not constitute a trademark as a source identifier worthy of conferring trademark rights on the applicant. After all, one sale of a single product hardly cements the consumer’s mind that the product originates from a single manufacturer, That is the crux of the concept of trademarks. In the case-law of trademarks, a single sale of a single product is considered to be “Token Use” and is therefore not sufficient to justify the protection of a trademark.
Ironically, until 1989, the PTO did agree that the nominal use of a trademark was necessary to grant federal trademark rights. Therefore, in this definition, selling a single t-shirt (with the trademark on the shirt tag) to your friend who lives in another state will be appropriate to gain federal trademark rights. However, after 1989, the Trademark Act no longer accepts Token Use as a “Use in Commerce” and merely selling a single item would no longer comply with the statutory definition of “pure use of a trademark in the ordinary course of trade and not merely reserved a trademark right.”
Unfortunately, the USPTO has never provided an exact number of sales that must be made to comply with the ‘Bona Fide use in the ordinary course of trade’ requirement, but the key standard is the degree to which the applicant makes a ‘good faith effort to establish a trade.’ Practically, the Courts consider whether or not a sale has been made to conduct business or to comply with the letter of law to obtain trademark rights. The latter is considered to be “Sham Transactions” and would therefore not satisfy the Bona Fide Use in trademark use in commerce Requirements. Here are some examples of what would be called “Sham Transactions.”
- Delivery of a single promotional item to a prospective customer free of charge
- Sale of many pieces of clothing at a small price for promotional purposes only.
- Provision of accounting services at 100th of the normal market value price
Critically, even if the applicant made a sale of the goods by Bona Fide, such sales can not be too sporadic or nominal unless they fall short of the “ordinary course of trade” requirement. Remember, trademark law is primarily concerned with the question of whether or not a trademark is a Source Identifier; when a consumer sees a trademark attached to goods or services, the consumer understands the source of that goods or services. If the symbol is used only lightly and sporadically, the answer (at least from the Courts and the USPTO) may be no.
WHAT IS NOT A BONA FIDE USE IN COMMERCE
Note, the criterion is whether or not the trademark is a “bona fide usage of the ordinary course of trade” of compliance with the Trademark Act. The following is a short, non-comprehensive list of what is unlikely to meet the statutory definition:
- “Sales” to friends or family;
- One shipment of goods;
- a single sale of an item with a fraction of its market value;
- An instance where the first collection of sales is accompanied by an exceptionally long pause (unless this superficial abnormality is a common procedure in the applicant industry);
- The labels used on the product were “handmade” rather than professionally rendered in a manner appropriate to the commercial character of the product;
- The applicant has never tried to sell or encourage the products.