Opinion ID: 75576
Heading Depth: 2
Heading Rank: 1

Heading: Prior Use in Commerce

Text: Under common law, trademark ownership rights are appropriated only through actual prior use in commerce. Tally-Ho, Inc. v. Coast Community College Dist., 889 F.2d 1018, 1022 (11th Cir.1989) (citation omitted). Under the Lanham Act,5 the term use in commerce is defined in relevant part as follows: the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.... [A] mark shall be deemed to be in use in commerce ... on goods when (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce .... 15 U.S.C. § 1127.6 The district court found that because the statute is written in the disjunctive (i.e., sale 4 Courts may use an analysis of federal infringement claims as a measuring stick in evaluating the merits of state law claims of unfair competition. See Investacorp, Inc. v. Arabian Inv. Banking Corp. (Investcorp) E.C., 931 F.2d 1519, 1521 (11th Cir.), cert. denied, 502 U.S. 1005, 112 S.Ct. 639, 116 L.Ed.2d 657 (1991). 5 In the absence of registration, rights to a mark traditionally have depended on the very same elements that are now included in the statutory definition: the bona fide use of a mark in commerce that was not made merely to reserve a mark for later exploitation. Allard Enters., Inc. v. Advanced Programming Res., Inc., 146 F.3d 350, 357 (6th Cir.1998). Common law and statutory trademark infringements are merely specific aspects of unfair competition. New West Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194, 1201 (9th Cir.1979) (citing, inter alia, Dresser Indus., Inc. v. Heraeus Engelhard Vacuum, Inc., 395 F.2d 457, 461 (3d Cir.), cert. denied, 393 U.S. 934, 89 S.Ct. 293, 21 L.Ed.2d 270 (1968)). 6 Appellants appear to have conceded that if Darrah sent out original programs and related manuals, this would satisfy the affixation requirement: MR. GIGLIOTTI [counsel for Techsplosion]: [The mark] has to be on the product or on the associated documentation. It is on neither. THE COURT: It is not on the associated documentation[?] How about the original programs Darrah sent out and manuals that went with it, and all that material, wasn't that enough for affixation? MR. GIGLIOTTI: Yes, Your Honor, that is affixation; however, he did not meet the sale requirement. or transport), Darrah's wide distribution of the Coolmail software over the Internet, even absent any sales thereof, was sufficient to establish ownership rights in the CoolMail mark. Appellants contend that transport in commerce alone—here, Darrah's free distribution of software over the Internet with no existing business, no intent to form a business, and no sale under the mark—is insufficient to create trademark rights. Appellants' Brief at 13. Appellants' argument lacks merit. The parties do not make clear the two different contexts in which the phrase use in commerce is used. The term use in commerce as used in the Lanham Act denotes Congress's authority under the Commerce Clause rather than an intent to limit the [Lanham] Act's application to profit making activity. United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc., 128 F.3d 86, 92-93 (2d Cir.1997) (citation omitted), cert. denied, 523 U.S. 1076, 118 S.Ct. 1521, 140 L.Ed.2d 673 (1998); U.S. Const., Art. I, § 8, cl. 3. Because Congress's authority under the Commerce Clause extends to activity that substantially affects interstate commerce, United States v. Lopez, 514 U.S. 549, 559, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995), the Lanham Act's definition of commerce is concomitantly broad in scope: all commerce which may lawfully be regulated by Congress. 15 U.S.C. § 1127. See also Steele v. Bulova Watch Co., 344 U.S. 280, 283-84, 73 S.Ct. 252, 97 L.Ed. 319 (1952); Larry Harmon Pictures Corp. v. Williams Rest. Corp., 929 F.2d 662, 666 (Fed.Cir.) (allowing registration for an intrastate provider of restaurant services with an undefined interstate clientele), cert. denied, 502 U.S. 823, 112 S.Ct. 85, 116 L.Ed.2d 58 (1991). The distribution of the Software for end-users over the Internet satisfies the use in commerce jurisdictional predicate. See, e.g., Planned Parenthood Fed'n of Am., Inc. v. Bucci, 42 U.S.P.Q.2d 1430, 1434, 1997 WL 133313 (S.D.N.Y.1997) (The nature of the Internet indicates that establishing a typical home page on the Internet, for access to all users, would satisfy the Lanham Act's 'in commerce' requirement.), aff'd, 152 F.3d 920 (2d Cir.), cert. denied, 525 U.S. 834, 119 S.Ct. 90, 142 L.Ed.2d 71 (1998). Nevertheless, the use of a mark in commerce also must be sufficient to establish ownership rights for a plaintiff to recover against subsequent users under section 43(a). See New England Duplicating Co. v. Mendes, 190 F.2d 415, 417-18 (1st Cir.1951) (after finding use in commerce jurisdiction predicate satisfied, court noted that [t]he question remains whether the plaintiff has established that he was the 'owner' of the R3-85-19 to 20. In any case, the affixation requirement is met because the Software was distributed under a filename that is also the claimed mark, was promoted under the same mark, was accompanied by a user manual bearing the mark, and was sold in a compilation under the mark. mark, for under [15 U.S.C. § 1051] only the 'owner' of a mark is entitled to have it registered.). The court in Mendes set forth a two part test to determine whether a party has established prior use of a mark sufficient to establish ownership: [E]vidence showing, first, adoption,7 and, second, use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark, is competent to establish ownership, even without evidence of actual sales.8 Id. at 418. See also New West, 595 F.2d at 1200.9 Courts generally must inquire into the activities surrounding the prior use of the mark to determine whether such an association or notice is present. See, e.g., Johnny Blastoff, Inc. v. L.A. Rams Football Co., 188 F.3d 427, 433 (7th Cir.1999) (The determination of whether a party has established protectable rights in a trademark is made on a case by case basis, considering the totality of the circumstances.), cert. denied, 528 U.S. 1188, 120 S.Ct. 1241, 146 L.Ed.2d 100 (2000). Under the totality of circumstances analysis, a party may establish use in commerce even in the absence of sales. [A]lthough evidence of sales is highly persuasive, the question of use adequate to establish appropriation remains one to be decided on the facts of each case .... New West, 595 F.2d at 1200 (quoting Mendes, 190 F.2d at 418). The court in New West recognized that mere advertising by itself may not establish priority of use, but found that promotional mailings coupled with advertiser and distributor solicitations met the Mendes public identification ownership requirement. Id. at 1200. Thus, contrary to Appellants' assertions, the existence of sales or lack 7 It is uncontested that Darrah adopted the mark Coolmail before Appellants' use of the mark in connection with their e-mail service. 8 This ownership test is not for the purpose of establishing the use in commerce jurisdictional predicate of the Lanham Act. See, e.g., Univ. of Fla. v. KPB, Inc., 89 F.3d 773, 776 n. 4 (11th Cir.1996). See supra discussion in text. 9 This ownership requirement parallels the statutory definition of trademark: any word, name, symbol, or device, or any combination thereof ... used by a person ... to identify and distinguish his or her goods ... from those manufactured or sold by others .... 15 U.S.C. § 1127. The Seventh Circuit has held that a higher quantum of use may be necessary to establish ownership rights under common law than under the statute because the notice function of registration is lacking. See Zazu Designs v. L'Oreal, S.A., 979 F.2d 499, 503-04 (7th Cir.1992). In addition, the continuity of a user's commercial activities in connection with the mark is also relevant to determining whether use is sufficient to establish common law ownership. Circuit City Stores, Inc. v. CarMax, Inc., 165 F.3d 1047, 1054-55 (6th Cir.1999) (A party establishes a common law right to a trademark only by demonstrating that its use of the mark was 'deliberate and continuous, not sporadic, casual or transitory.' ). thereof does not by itself determine whether a user of a mark has established ownership rights therein.10 Compare Marvel Comics Ltd. v. Defiant, 837 F.Supp. 546, 549 (S.D.N.Y.1993) (finding announcement of Plasmer title to 13 million comic book readers and promotion at annual trade convention sufficient to establish trademark ownership rights, notwithstanding lack of any sales) with WarnerVision Entm't Inc. v. Empire of Carolina Inc., 915 F.Supp. 639, 645-46 (S.D.N.Y.) (finding toy manufacturer's promotional efforts insufficient to establish priority of use where only a few presentations were made to industry buyers, even though one resulted in a sale to a major toy retailer), aff'd in part, vacated in part, 101 F.3d 259 (2d Cir.1996).11 Similarly, not every transport of a good is sufficient to establish ownership rights in a mark. To warrant protection, use of a mark need not have gained wide public recognition, but [s]ecret, undisclosed internal shipments are generally inadequate. Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260, 1265 (5th Cir.1975).12 In general, uses that are de minimis may not establish trademark ownership rights. See, e.g., Paramount Pictures Corp. v. White, 31 U.S.P.Q.2d 1768, 1772-73 (Trademark Tr. & App. Bd.1994) (finding no bona fide use in ordinary course of trade where mark was affixed to a game consisting of three pieces of paper and distributed for the purpose of promoting musical group). We find that, under these principles, Darrah's activities under the Coolmail mark constitute a use in commerce sufficiently public to create ownership rights in the mark. First, the distribution was widespread, and there is evidence that members of the targeted public actually associated the mark Coolmail with the Software to which it was affixed. Darrah made the software available not merely to a discrete or 10 Appellants cite Future Domain Corp. v. Trantor Sys. Ltd., 27 U.S.P.Q.2d 1289, 1293 (N.D.Cal.1993) for the proposition that there must be a sale in order to satisfy the use in commerce requirement. Future Domain, however, turned not on the existence of sales but whether the extent of the purported mark owner's activities created a public association between the mark and the product. There, the court determined that a computer software manufacturer's promotion of a mark at a trade show—where at most 7,000 persons actually received or requested information about the mark and where no orders were taken—was not sufficient to create such an association. Id. at 1293-95. 11 Courts applying the totality of circumstances approach routinely have found evidence of a few sales of goods to which the mark had been affixed insufficient to establish trademark ownership. For example, in Zazu Designs, 979 F.2d at 503-04, the plaintiff hair salon had sold a few bottles of shampoo bearing the mark Zazu both over the counter and mailed over state lines. The court found that such limited sales neither link the Zazu mark with [the plaintiff's] product in the minds of consumers nor put other producers on notice. Id. at 503. 12 In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit prior to October 1, 1981. select group (such as friends and acquaintances, or at a trade show with limited attendance), but to numerous end-users via the Internet. The Software was posted under a filename bearing the Coolmail mark on a site accessible to anyone who had access to the Internet. End-users communicated with Darrah regarding the Software by referencing the Coolmail mark in their e-mails. Appellants argue that only technically-skilled UNIX-users made use of the Software, but there is no evidence that they were so few in number to warrant a finding of de minimis use. Third, the mark served to identify the source of the Software. The Coolmail mark appeared in the subject field and in the text of the announcement accompanying each release of the Software, thereby distinguishing the Software from other programs that might perform similar functions available on the Internet or sold in software compilations.13 The announcements also apparently indicated that Darrah was the Author/Maintainer of Coolmail and included his e-mail address. The user manual also indicated that the Software was named Coolmail.14 The German company S.u.S.E. was able to locate Darrah in order to request permission to use his Software in its product under the mark Coolmail. Appellants do not assert 13 Darrah testified that [m]ost of the source files ... have [the mark] in them. Also there's a copyright notice included with the software that has the name Coolmail. And the name of the executable file itself is Coolmail. R2-47-Exh. 3 at 67. 14 Darrah: The Coolmail name always comes with the documentation that comes with the software.