FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CREAGRI, INC., a California 

corporation,

Plaintiff-counter-claim- defendant- No. 05-15305 Appellant,

D.C. No.

v.  CV-03-3216-MMC

USANA HEALTH SCIENCES, INC., a OPINION Utah corporation,

Defendant-counter-claimantAppellee. 

Appeal from the United States District Court

for the Northern District of California

Maxine M. Chesney, District Judge, Presiding

Argued and Submitted

December 6, 2006—San Francisco, California

Filed January 16, 2007

Before: John T. Noonan, Michael Daly Hawkins, and

Sidney R. Thomas, Circuit Judges.

Opinion by Judge Hawkins

557
COUNSEL

Robin M. Pearson (argued) and Antonio Valla, Gilliss,Valla

& Dalsin, Lafayette, California, together with Katheryn C.

Ashton, Hancock, Rothert & Bunshoft, San Francisco, California, for the plaintiff-counter-claim-defendant-appellant. 

James W. Kinnear (argued), Holme, Roberts & Owen, San

Francisco, California, for the defendant-counter-claimantappellee. 

OPINION

HAWKINS, Circuit Judge: 

In a contest involving competing products claiming trademark priority, the district court determined, in order to acquire

priority, a “use in commerce” means a lawful use—here, a use

compliant with federal labeling requirements. We agree. 

BACKGROUND

In the spring of 2001, Appellant CreAgri, Inc. (“CreAgri”)

began selling Olivenol, a dietary supplement containing an

apparently beneficial antioxidant found in olives called

hydroxytyrosol. At the time, Olivenol’s label indicated that

each tablet contained 25mg of hydroxytyrosol, the product’s

primary active ingredient.1 Although the scientist who devel1Olivenol is now sold not only in tablet form, but also in capsule and

liquid forms. As there is no relevant difference between the three dosage

methods for purposes of this appeal, we will use “tablet” to refer to all

three forms. 

560 CREAGRI, INC. v. USANA HEALTH SCIENCES
oped Olivenol claimed no standardized method to accurately

measure a substance’s hydroxytyrosol content was yet available, neither he nor CreAgri applied for an exemption from

the Food, Drug, and Cosmetic Act’s (“FDCA”) labeling

requirements due to this technological limitation,2 apparently

content with the results of CreAgri’s own testing and the testing done by two outside companies selected and paid for by

CreAgri. 

One year later, however, Olivenol’s label had changed. It

had been brought to CreAgri’s attention that its 25mg

hydroxytyrosol measurement might be in error; thus, CreAgri

ordered further testing, which suggested that each Olivenol

tablet contained only 5mg of hydroxytyrosol. CreAgri

changed the Olivenol label accordingly but—despite its contention that a standardized measurement method was still

unavailable—again failed to apply for an exemption from the

FDCA’s labeling requirements and, in fact, claimed on Olivenol’s label that the 5mg measurement was “HPLC Certified.”

3

CreAgri now admits that each tablet contains at most 3mg

of hydroxytyrosol and that Olivenol was, therefore, inaccurately labeled in both instances. Indeed, as a result of this

lawsuit—which prompted CreAgri to test Olivenol again,

using what Olivenol’s developer admits to be a more accurate

testing method than the methods previously used—Olivenol’s

label was again changed in February 2004 to accurately

reflect the product’s contents.4 By this time, CreAgri’s appli2Dietary supplements like Olivenol are required to be sold in compliance with the labeling regulations detailed in 21 C.F.R. §§ 101.9 and

101.36; however, one may apply for an exemption from these regulations

—which the Food and Drug Administration (“FDA”), in its discretion,

may grant or deny—when it believes compliance would be impracticable

under the circumstances. 21 C.F.R. § 101.36(f)(2). 

3HPLC or High Performance Liquid Chromatography is a standard

method of testing the characteristics of food supplements and additives. 

4This new label makes no claim about the product’s hydroxytyrosol

content, but instead claims that each Olivenol tablet contains 5mg of

polyphenols, of which hydroxytyrosol is just one variety. USANA does

not dispute the accuracy of this label. 

CREAGRI, INC. v. USANA HEALTH SCIENCES 561
cation to register “Olivenol” on the principal register had been

denied,5 but—upon CreAgri’s October 9, 2002 amended

application—“Olivenol” had been listed on the supplemental

register.6

On June 18, 2002—more than a year after CreAgri began

selling Olivenol—Appellee USANA Health Sciences, Inc.

(“USANA”) filed an intent to use application with the Patent

and Trademark Office (“PTO”) asserting that it intended to

begin selling a series of vitamins, minerals, and nutritional

supplements containing an ingredient called Olivol, which—

like Olivenol—is an olive extract containing apparently beneficial polyphenols. USANA began selling these products in

August 2002, the PTO granted USANA’s application, and

“Olivol” is now listed on the principal register with a priority

date of June 18, 2002.7 The present suit arises because,

5The principal register is the primary register of trademarks in the

United States. Marks on the principal register receive a variety of evidentiary benefits, including presumptions of validity and ownership, as well as

a presumption that the registrant has the “exclusive right to use the registered mark in commerce.” 15 U.S.C. § 1057(b). CreAgri’s principal register application was denied based on its representation to the Patent and

Trademark Office that the word “Olivenol” translated to the German for

“olive oil,” making Olivenol—which contained no olive oil—deceptively

misdescriptive. See id. § 1052(e) (prohibiting registration of deceptively

misdescriptive marks). Although CreAgri now rescinds its prior representation, the fact remains that Olivenol does not appear on the principal register and is therefore ineligible for its evidentiary benefits. Id. § 1057(b).

6

“All marks capable of distinguishing applicant’s goods or services and

not registrable on the principal register” can be registered on the supplemental register. 15 U.S.C. § 1091(a). However, “registrations on the supplemental register shall not . . . receive [some of] the advantages”

extended to marks registered on the principal register. Id. § 1094. In particular, unlike principal registration, supplemental registration is not

“prima facie evidence of the validity of the registered mark . . . , of the

registrant’s ownership of the mark, [or] of the registrant’s exclusive right

to use the registered mark in commerce.” Id. § 1057(b). 

7Under 15 U.S.C. §§ 1051(b), 1051(d), and 1057(c), as long as an applicant’s mark is eventually granted registration on the principal register, and

as long as the applicant does, in fact, use the mark in commerce within a

set period of time thereafter, the filing of an intent to use application constitutes “constructive use of the mark, conferring a right of priority,

nationwide in effect.” 

562 CREAGRI, INC. v. USANA HEALTH SCIENCES
according to CreAgri, the name of USANA’s Olivol ingredient is confusingly similar to the name of its own Olivenol

product and, therefore—despite the June 18, 2002 priority

date attached to Olivol’s principal registration—USANA is

infringing upon the trademark rights CreAgri acquired when

it began selling Olivenol more than a year earlier. 

PROCEDURAL HISTORY

Shortly after USANA began distribution of its product,

CreAgri brought an action for trademark infringement, unfair

competition, unjust enrichment, and a number of related

claims. USANA counterclaimed requesting declaratory relief

as to all of CreAgri’s claims, as well as cancellation of the

Olivenol mark from the supplemental register. 

Following briefing, the district court granted USANA’s

motion for summary judgment. The court concluded that,

even viewing the evidence in the light most favorable to

CreAgri, the Olivenol mark had not been lawfully used in

commerce prior to USANA’s priority date—a prerequisite to

all of CreAgri’s claims against USANA. Accordingly, the district court dismissed CreAgri’s claims, entered declaratory

judgment in favor of USANA on its counterclaims, and

ordered “Olivenol” cancelled from the supplemental register.

CreAgri appeals this final judgment. 

DISCUSSION

“We review the district court’s grant of summary judgment

de novo.” Klamath Siskiyou Wildlands Ctr. v. Boody, 468

F.3d 549, 554 (9th Cir. 2006). For CreAgri to ultimately prevail on its trademark infringement claims, it must have

acquired trademark rights to “Olivenol” before USANA had

acquired trademark rights to “Olivol.” See Sengoku Works

Ltd. v. RMC Int’l, Ltd., 96 F.3d 1217, 1219 (9th Cir. 1996)

(“It is axiomatic in trademark law that the standard test of

CREAGRI, INC. v. USANA HEALTH SCIENCES 563
ownership is priority of use.”).8

 Because “Olivol” was registered on the principal register with a priority date of June 18,

2002—and CreAgri does not challenge the lawfulness of that

registration—the question becomes whether CreAgri had

acquired trademark rights to “Olivenol” prior to that date. See

15 U.S.C. § 1057(b) (“[R]egistration of a mark upon the principal register . . . shall be prima facie evidence of . . . the registrant’s ownership of the mark, and of the registrant’s

exclusive right to use the registered mark in commerce.”). 

If “use in commerce” were the only requirement for acquiring trademark rights,9

 then CreAgri would have an easier path

to establishing priority of its mark because it began selling

Olivenol more than one year before USANA’s intent to use

application was filed. See 15 U.S.C. §§ 1051(a)(1), 1127

(requiring “use in commerce” to establish trademark rights);

Cal. Bus. & Prof. Code §§ 14207, 14209 (mirroring federal

law). 

[1] But the inquiry does not stop with use in commerce. It

has long been the policy of the PTO’s Trademark Trial and

Appeal Board that use in commerce only creates trademark

rights when the use is lawful. See, e.g., In re Midwest Tennis

& Track Co., 29 U.S.P.Q.2d 1386, 1386 n.2 (T.T.A.B. 1993);

Clorox Co. v. Armour-Dial, Inc., 214 U.S.P.Q. 850, 851

(T.T.A.B. 1982); In re Pepcom Indus., Inc., 192 U.S.P.Q. 400,

401 (T.T.A.B. 1976); In re Stellar Int’l, Inc., 159 U.S.P.Q. 48,

51 (T.T.A.B. 1968). At least one circuit has adopted and

applied this rule. See United Phosphorus, Ltd. v. Midland

Fumigant, Inc., 205 F.3d 1219, 1225 (10th Cir. 2000). A

question of first impression in this circuit, we also agree with

8As the district court correctly noted, the success of CreAgri’s other

claims rises or falls with its success on its trademark infringement claims.

9We assume, for discussion purposes, that CreAgri’s mark is eligible for

trademark protection—i.e., that it is inherently distinctive or has acquired

distinctiveness through secondary meaning. See KP Permanent Make-Up,

Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 602 (9th Cir. 2005). 

564 CREAGRI, INC. v. USANA HEALTH SCIENCES
the PTO’s policy and hold that only lawful use in commerce

can give rise to trademark priority. 

[2] The rationale for this rule is twofold. First, as a logical

matter, to hold otherwise would be to put the government in

the “anomalous position” of extending the benefits of trademark protection to a seller based upon actions the seller took

in violation of that government’s own laws. See In re Stellar,

159 U.S.P.Q. at 51. It is doubtful that the trademark statute—

passed pursuant to Congress’s power under the Commerce

Clause—“was . . . intended to recognize . . . shipments in

commerce in contravention of other regulatory acts promulgated [by Congress] under [that same constitutional provision].” Id. Second, as a policy matter, to give trademark

priority to a seller who rushes to market without taking care

to carefully comply with the relevant regulations would be to

reward the hasty at the expense of the diligent. 

[3] Here, it is undisputed that, at all times prior to

USANA’s priority date, Olivenol’s labels were not in compliance with the labeling requirements of 21 C.F.R.

§ 101.9(g)(4)(i) and, thus, Olivenol was being sold in violation of 21 U.S.C. §§ 331(a), 343(a) (prohibiting sale of misbranded food as determined by reference to the relevant

regulations). By CreAgri’s own admission, each tablet sold

under the Olivenol name before June 18, 2002 contained, at

most, 3mg of hydroxytyrosol, while Olivenol’s label claimed

that each tablet contained either 25mg or 5mg of this nutrient.

21 C.F.R. § 101.9(g)(4)(i), however, requires that the actual

amount of a nutrient added to a product be “at least equal to

the value for that nutrient declared on the label.”

10 Because

10This is the standard for a Class I vitamin, which we agree with the district court is the correct categorization for hydroxytyrosol. Although

hydroxytyrosol may naturally be found in olives, it is not naturally found

in Olivenol, but rather is added to Olivenol, which is manufactured pursuant to a patented method. Compare 21 C.F.R. § 101.9(g)(3)(i) (Class I

vitamins are “[a]dded nutrients in fortified or fabricated foods”), with id.

§ 101.9(g)(3)(ii) (Class II vitamins are “[n]aturally occurring (indigenous)

nutrients”). 

CREAGRI, INC. v. USANA HEALTH SCIENCES 565
the actual amount of hydroxytyrosol (at most 3mg) was less

than the values for hydroxytyrosol declared on Olivenol’s

labels (25mg and 5mg), CreAgri’s product was, at all relevant

times, in violation of 21 C.F.R. § 101.9(g)(4)(i).11

CreAgri seeks to avoid the consequences of its noncompliance in three ways: first, by arguing that the nexus

between its labeling violation and its use of the Olivenol mark

is too attenuated to justify depriving “Olivenol” of trademark

protection; second, by contending that it was technologically

infeasible to accurately measure the content of hydroxytyrosol

when Olivenol was mislabeled and that, because the regulations provide for an exemption in such circumstances, sale of

Olivenol was not actually unlawful; and third, by asserting

that its violation was not material, citing General Mills, Inc.

v. Health Valley Foods, 24 U.S.P.Q.2d 1270, 1274 (T.T.A.B.

1992). We are not persuaded by these arguments.

Nexus 

The nexus requirement springs from decisions of the Trademark Trial and Appeal Board: “There must be some nexus

between . . . use of [a] mark and [an] alleged violation before

it can be said that the unlawfulness of [a] sale or shipment has

resulted in [a trademark’s] invalidity . . . .” Satinine Societa

in Nome Collettivo v. P.A.B. Produits, 209 U.S.P.Q. 958, 967

(T.T.A.B. 1981) (Kera, concurring); General Mills, 24

U.S.P.Q.2d at 1274 (adopting this rule). CreAgri argues that

its labeling violation was collateral to its use of the Olivenol

11Even if Olivenol were more leniently categorized as a Class II vitamin, “the [hydroxytyrosol] content of [Olivenol would have to be] at least

equal to 80 percent of the value for [hydroxytyrosol] declared on the

label” to comply with the FDCA regulations. See 21 C.F.R.

§ 101.9(g)(4)(ii). Olivenol’s actual hydroxytyrosol content (at most 3mg)

is only 60 percent of the hydroxytyrosol content (5mg) declared on Olivenol’s more recent label. Thus, at all relevant times, Olivenol’s labels

would have been in violation of section 101.9(g)(4)(ii), as well. 

566 CREAGRI, INC. v. USANA HEALTH SCIENCES
mark and, thus—under the Satinine rule—the former should

not render the latter “unlawful.” 

[4] We neither adopt nor reject the Satinine rule because,

even if the rule were adopted, CreAgri could not benefit from

it. While it may be possible to conceive of a situation in

which violation of a law in connection with a trademarked

product would have no effect on the rights inuring in that

trademark, the nexus between a misbranded product and that

product’s name, particularly one designed for human consumption, is sufficiently close to justify withholding trademark protection for that name until and unless the

misbranding is cured. 

Indeed, the concurrence in Satinine cuts against CreAgri’s

position: 

[W]e should not refuse registration or order the cancellation of a registration because of some purely

collateral defect such as the use of a container which

did not comply with an ICC regulation or the failure

of a party to pay an excise tax. . . . [But, as] a general

proposition, subject to qualification as the facts of

particular cases require, I may venture to say that a

registration should be refused or cancelled when it is

unlawful to ship the goods in commerce (either

because any shipment is forbidden or because

required prior approval was not obtained) or when

the contents of the labelling [sic], of which the mark

is a part, are unlawful.” 

209 U.S.P.Q. at 967 (Kera, concurring) (emphasis added). 

[5] Without expressing an opinion as to whether the examples given in Satinine establish the appropriate dividing line

between collateral and non-collateral defects, the labeling

defect in this case was sufficiently related to the Olivenol

mark so as to satisfy the nexus requirement. Cf. Clorox, 214

CREAGRI, INC. v. USANA HEALTH SCIENCES 567
U.S.P.Q. at 851 (finding unlawful use in commerce when

product label did not comply with the FDCA); In re Pepcom,

192 U.S.P.Q. at 401 (same); In re Stellar, 159 U.S.P.Q. at 51

(same). 

Potential Exemption

We also reject CreAgri’s argument that, because there was

no accepted method for determining the hydroxytyrosol content of a given substance at the time Olivenol’s labels were in

error, Olivenol was exempt from the FDCA’s labeling

requirements. See 21 U.S.C. §§ 331(a), 343(a) (requiring that

dietary supplements be sold in accordance with the FDCA’s

labeling regulations, including 21 C.F.R. §§ 101.9 and

101.36); 21 C.F.R. § 101.36(f)(2) (allowing a seller to apply

for an exemption from these regulations if it is technologically infeasible or otherwise impracticable to comply with

them). 

[6] While it is unclear, as a factual matter, whether appropriate testing was technologically feasible at the time, section

101.36(f)(2) does not provide for an automatic exemption but,

rather, expressly requires sellers to apply for and receive an

exemption from the FDA. CreAgri did neither. Cf. Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 15 F. Supp. 2d

389, 397 (S.D.N.Y. 1998) (noting that “[a]n investment

adviser is exempt from registering with the SEC” under 15

U.S.C. § 80b-3(b)(3) if the adviser has certain characteristics;

the adviser need not apply in order to qualify). As per the

clear language of 21 C.F.R. § 101.36(f)(2) (emphasis added):

When it is not technologically feasible, or some

other circumstance makes it impracticable, for firms

to comply with the requirements of this section,

FDA may permit alternative means of compliance or

additional exemptions to deal with the situation in

accordance with § 101.9(g)(9). Firms in need of such

special allowances shall make their request in writ568 CREAGRI, INC. v. USANA HEALTH SCIENCES
ing to the Office of Nutritional Products, Labeling

and Dietary Supplements (HFS-800), Food and Drug

Administration, 5100 Paint Branch Pkwy., College

Park, MD 20740. 

[7] Thus, if CreAgri had applied for, and if the FDA had

exercised its discretion by granting, an exemption on the basis

of technological infeasibility, then CreAgri’s violation of section 101.9(g)(4) would be properly excused. CreAgri, however, offered no evidence to show that it so much as applied

to the Office of Nutritional Products for an exemption pursuant to the procedures set forth in 21 C.F.R. § 101.36(f)(2),

much less that the FDA granted CreAgri “special allowances”

from the FDCA’s labeling requirements. As such, sale of Olivenol until at least June 18, 2002 was unlawful and was not

excused by CreAgri’s hypothetical eligibility for an “uponapplication-only” exemption for which CreAgri never

applied. Cf. 21 C.F.R. § 101.36(h) (providing automatic

exemptions from § 101.9’s labeling requirements in other circumstances); Lane, 15 F. Supp. 2d at 397.

Materiality

CreAgri’s final argument with respect to the apparent

unlawfulness of its use of “Olivenol” in commerce prior to

USANA’s priority date is that the labeling defect was so

harmless or de minimis that it should be excused as “immaterial” under General Mills, 24 U.S.P.Q.2d at 1274 (holding

that a labeling defect is “material” only when it is “of such

gravity and significance that the usage must be considered

unlawful—so tainted that, as a matter of law, it [can] create

no trademark rights”). 

General Mills involved a dispute between Health Valley

Foods (seller of Fiber 7 Flakes cereal) and General Mills, Inc.

(seller of Fiber One cereal), in which the former accused the

latter of not having lawfully used “Fiber One” in commerce

CREAGRI, INC. v. USANA HEALTH SCIENCES 569
when the latter applied for trademark registration.12 Id. at

1271-72. Although the first eighteen boxes of Fiber One—

indeed, all boxes sold before General Mills applied for trademark registration of the Fiber One mark—were mislabeled

under the FDCA, General Mills noticed the error, promptly

corrected it, and then sold over 600,000 correctly labeled

boxes to consumers before Health Valley Foods even applied

to register “Fiber 7 Flakes.” Id. at 1271-73 & n.1. Under these

facts, the Trademark Trial and Appeal Board concluded that

cancelling Fiber One’s registration based on the original eighteen mislabeled boxes would be “Draconian.” Id. at 1273. 

This case is categorically different. Whereas General Mills

corrected its labeling error before its competitor’s priority

date—thus eventually establishing the “lawful use in commerce” necessary for trademark protection—CreAgri did not

correct its labeling error before USANA’s priority date, and

thus, there is not a single instance of “lawful use in commerce” prior to June 18, 2002 upon which CreAgri can base

its claim of priority. Accordingly, we need not decide whether

to adopt the General Mills test for materiality; by any definition, Olivenol’s defect—which existed as to every bottle of

Olivenol sold prior to the competing registrant’s priority date

—was material. 

CONCLUSION

[8] Because CreAgri’s admitted violation of 21 C.F.R.

§ 101.9(g)(4) cannot be deemed collateral to use of the Olivenol mark under Satinine, 209 U.S.P.Q. at 967 (Kera, concurring), excused under 21 C.F.R. § 101.36(f)(2), or

12At the time, failing to lawfully use a mark in commerce before applying for trademark registration would render the mark ineligible for such

registration. The “intent to use” system has since supplanted the system

that was in place when General Mills’ application was processed. See Pub.

L. No. 100-667 § 103, 102 Stat. 3935 (1988) (codified as amended at 15

U.S.C. § 1051). 

570 CREAGRI, INC. v. USANA HEALTH SCIENCES
overlooked as immaterial under General Mills, 24 U.S.P.Q.2d

at 1274, it follows that the Olivenol mark was not lawfully

used in commerce prior to Olivol’s June 18, 2002 priority

date. As such, USANA’s mark has priority over CreAgri’s

mark, and a trademark infringement action by CreAgri against

USANA cannot stand. The district court correctly granted

summary judgment in favor of USANA on CreAgri’s trademark infringement claims.13

[9] Additionally, the district court correctly cancelled “Olivenol” from the supplemental register. A mark is only eligible

for supplemental registration if it was in “lawful use in commerce” prior to the date on which the holder applied for such

registration. 15 U.S.C. § 1091(a); In re Pepcom, 192 U.S.P.Q.

at 401. As explained above, “Olivenol” was not lawfully used

in commerce prior to June 18, 2002, and CreAgri admits that

Olivenol’s labels on October 9, 2002—when CreAgri filed its

amended application for registration on the supplemental

register—were no different from those in use on June 18,

2002. Thus, the Olivenol mark was properly cancelled from

the supplemental register.14

AFFIRMED.

13Summary judgment was also properly granted as to CreAgri’s nontrademark-infringement claims and USANA’s request for declaratory

judgment, as these claims also hinged on Olivenol’s trademark priority—

or lack thereof—over Olivol. 

14It should be noted that cancellation of Olivenol’s current supplemental registration does not necessarily render “Olivenol” forever incapable of

being registered on either the principal or supplemental registers. 

CREAGRI, INC. v. USANA HEALTH SCIENCES 571