Court Opinion

ID: 9481493
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:20:46.986931+00
Date Added: 2024-06-11T17:48:21.302536
License: Public Domain

PAULINE NEWMAN, Circuit Judge,
dissenting.
This appeal raises questions of procedure and law, in both of which the Trademark Trial and Appeal Board erred. I respectfully dissent from this court’s endorsement of those errors.
I

Procedure

Particularly in an administrative proceeding of the Trademark Board, where the entire record is documentary and the factual premises few, there is scant benefit to imposing the strictures of Federal Rule 56 when there are material facts in dispute. The public and governmental interest in prompt and final resolution of disputes by administrative agencies is not served by too facile application of the rules governing summary judgment, with its required inferences and presumptions and burdens. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Indeed, in this case the Board incorrectly adopted the movant’s version of disputed facts, and improperly shifted the burden of proof on summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).
This case turns on the material and disputed fact of the effect on interstate commerce of the restaurant services at Bozo’s Bar-B-Que Restaurant of Mason, Tennessee. Finding this fact is predicate to determination of whether the restaurant services were “rendered in commerce” in terms of Section 45 of the Lanham Act:
15 U.S.C. § 1127 [Section 45],
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*667The word “commerce” means all commerce which may lawfully be regulated by Congress.
* * * * * *
For purposes of this chapter, a mark shall be deemed to be in use in commerce—
(2) 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.
It was undisputed that Bozo’s Restaurant services were not rendered in more than one state or in this and a foreign country. Thus the applicant was required to show that the services were “rendered in commerce”. In connection with that showing the parties disputed, inter alia, the factual issue of the extent of patronage of Bozo’s Restaurant by customers from other states. This issue was material to determination of whether the restaurant’s services were “rendered in commerce”.
The Board erred in accepting, on summary judgment, the movant’s version of this fact. The Board also erred in law, in holding that “some” contact with interstate commerce suffices to cause single-location restaurant services to be “rendered in commerce” within the meaning of the Lanham Act. The Board’s explanation, that it would be burdensome on the trademark examination system to ascertain the actual effect on commerce of such intrastate services, is insufficient reason to depart from the Lanham Act, with its balances, safeguards, and reasoned jurisprudence.
II

Single-Location Restaurant Services

Unlike the interstate movement of goods for purposes of trademark registration, the services of a single-location restaurant do not move across state borders. Federal registration of such service marks invokes other criteria, all of which relate to the extent of interstate contact of the local service establishment. With sufficient interstate contact, services provided entirely intrastate .may indeed satisfy the Lanham Act requirements. A useful body of deci-sional law has developed, providing legal analysis and guidance in the context of statutory intent and public policy.
A
Precedent is sparse for single-location restaurants. The only court decision cited is In re Bookbinder’s Restaurant, Inc., 240 F.2d 365, 44 CCPA 731, 112 USPQ 326 (1957), wherein the CCPA held that the applicant did not make a sufficient showing to establish that its services were rendered in commerce within the meaning of the Lanham Act, the court holding that attorney argument alone was insufficient. Id. 240 F.2d at 368, 112 USPQ at 328. In In re Smith Oil Corp., 156 USPQ 62 (TTAB 1967) the Board authorized registration of the service mark of a single-location restaurant located on an interstate highway, where “many, if not the majority” of the patrons were from out-of-state. Id. at 62.
For services other than restaurants there is substantial authority, accompanied by edifying analysis. In In re Gastown, 326 F.2d 780, 51 CCPA 876, 140 USPQ 216 (1964) federal registration was granted for the service mark of a chain of automobile and truck service stations located only in Ohio; the CCPA held that the location of some of these stations on interstate highways, the frequent patronage by out-of-state vehicles and persons engaged in interstate commerce, the road service provided to disabled vehicles from out-of-state, and the extension of credit and out-of-state billing, were sufficient to show that the services rendered had a “direct effect” on commerce. Id. 326 F.2d at 784, 140 USPQ at 218.
In In re Silenus Wines, Inc., 557 F.2d 806, 194 USPQ 261 (CCPA 1977) the CCPA discussed its holding in Gastown, explaining that a service mark is used in commerce when the services “directly affect interstate commerce”. Id. 557 F.2d at 808 & n. 3, 194 USPQ at 263 & n. 3. The court *668stated that such direct effect requires that two elements pertain, i.e., “when the services are sold intrastate to persons moving in interstate commerce, and the services are of the type necessary for the accomplishment of the interstate commerce.” Id. The court held that Silenus Wines’ trademark was used in commerce because it was affixed to bottles of wine that were imported from France and sold intrastate, remarking that “appellant’s sale within Massachusetts was so intimately involved with foreign commerce as to become a ‘use in commerce’ as defined in the Lanham Act”. Id. at 809, 194 USPQ at 264. As applied to the case at bar, I can not agree with the panel majority that Silenus Wines supports a broadened scope of the Lanham Act.
To the contrary, in accord with the Silenus Wines discussion of the criteria for service mark registration, the Board refused registration of the service mark of a beauty shop, In re Conti, 220 USPQ 745 (TTAB 1983), and a service mark for housing development and real estate services, In re U.S. Home Corp. of Texas, 199 USPQ 698, recon. denied, 201 USPQ 602 (TTAB 1978). In Conti the Board rejected the applicant’s argument that its local beauty salon services were rendered in commerce for purposes of the Lanham Act because it was a public accommodation regulable under the Civil Rights Act. 220 USPQ at 747. In U.S. Home the Board rejected the argument that because the real estate services were governed by the Federal Fair Housing Act that bars discrimination in housing, the services were rendered in commerce for purposes of the Lanham Act. Id., 199 USPQ at 701-02. These cases correctly implement the premise that the criterion for registration under the Lanham Act is whether the services are rendered in commerce.
B
Federal service mark registration is a statutory grant, enlarging common law rights. The requirement of the words “rendered in commerce” is of carefully delineated scope, and is not identical to the scope of different words in other statutes. See the discussion in United States v. Gillies, 851 F.2d 492, 493, 494 (1st Cir.), cert. denied, 488 U.S. 857, 109 S.Ct. 147, 102 L.Ed.2d 119 (1988), of such statutory usages as “in commerce”, “engaged in commerce”, and “affecting commerce”. Thus in U.S. Home the Board correctly held that the effect of prohibited discrimination on commerce does not mean that the accompanying local service mark is registrable under the Lanham Act. These are different issues, and the issue of applicability of the Lanham Act turns on whether Congress intended to authorize nation-wide registration of the service marks of local restaurants when Congress used the phrase “services ... rendered in commerce”; not whether it has the power to do so under the Constitution.
The distinction between the power to legislate, and the intended scope of a specific act of Congress, pervades judicial decisions. The Supreme Court summarized the truism that not all legislation based on the Commerce Clause invokes the full power of Congress:
The phrase “in commerce” does not, of course, necessarily have a uniform meaning whenever used by Congress.
United States v. American Building Maintenance Industries, 422 U.S. 271, 277, 95 S.Ct. 2150, 2155, 45 L.Ed.2d 177 (1975) (holding that the usage “engaged in commerce” of the Clayton Act was not intended to be coextensive with the reach of congressional power under the Commerce Clause, and was intentionally narrower than the usage “affecting commerce”).
Thus the determination of how much interstate contact is required to transform a single-location restaurant’s local services into services rendered in commerce must be decided in view of the statute governing federal service mark registration. Congress was not silent as to its intent that intrastate commerce shall be excluded. The legislative history of the Lanham Act clearly shows the purpose to deny federal registration to marks for “local matters *669that affect or hamper interstate commerce”:
Senator PEPPER: Mr. Kelley [testifying for the Federal Trade Commission] ... would you mind suspending at this point so that we may get a statement from Miss [Daphne] Robert [testifying for the American Bar Association] as to whether it is her opinion that it is the intent of Congress that this bill shall apply to any sort of intrastate commerce?
Mr. KELLEY: Yes, Sir.
Miss ROBERT: That is not my understanding of it, Senator.
Senator PEPPER: It is your understanding that it is the intent of the bill, and if enacted will be the intent of Congress, to apply only to commerce among the States?
Miss ROBERT: That is my understanding — and foreign commerce.
Senator PEPPER: Very well. Is that the general opinion of the people who are here today as proponents of it? * * *
Senator PEPPER: I should like the record to show that, by their silence, those who are here today as proponents of the bill have agreed to the statement of [Congressman] Lanham, the author of the bill, and of Miss Robert, who has been regarded as one of the able spokesmen for it, that it is the intention of the bill to apply only to commerce among the States and to foreign commerce.
Mr. KELLEY: And not to local matters that affect or hamper interstate commerce. That is the point, I think.
Senator PEPPER: That is correct.
Hearings on HR. 82 before a Subcommittee of the Senate Committee on Patents, 78th Cong., 2d Sess. at 138 (1944).
Thus the courts and the trademark registration authorities have required, for registration of local service marks, more than “some” contact with interstate commerce. Shortly after enactment of the Lanham Act, the Assistant Commissioner for Trademarks, stating that the Act required that registrable services be “actively rendered in interstate commerce”, denied federal registration to the service mark of an automobile paint shop despite its location on an interstate highway serving cars with out-of-state license plates and its advertising in newspapers with interstate circulation. In re Gill, 87 USPQ 274, 275 (Comm’r Pat. 1950). Subsequent rulings did not depart from this standard.
C
The Board held that the provision at Bozo’s Bar-B-Que Restaurant of services to some interstate travellers, accompanied by a few free mentions in out of state publications, satisfied the "rendered in commerce” requirement of the Lanham Act.
The parties disputed the extent of interstate patronage, the applicant estimating that fifteen percent of its customers were from out-of-state, and the opposer observing that during a busy lunchtime there were no cars at all with out-of-state licenses. Bozo’s Restaurant had received four or five mentions by newspaper columnists in other states and in a cookbook, but all but one of these instances occurred after the filing date of the application for federal registration. Use in commerce, to support a trademark application, must be made before the filing date of the application. 15 U.S.C. § 1051(a) [Section 1 Lanham Act].
Further, an unsolicited mention in an article is not “use” in commerce. Such evidence has served with varying success to support a claim to priority, but not to support registration. See Old Swiss House, Inc. v. Anheuser-Busch, Inc., 569 F.2d 1130, 1133, 196 USPQ 808, 810 (CCPA 1978) (references to a mark “buried in the body of the articles” is “not the type of public exposure of a mark that would be expected to have any significant impact on the purchasing public.”) The Board erred in relying on this evidence.
Other factual circumstances that were generally undisputed add weight to the strictly local nature of Bozo’s Restaurant: It was not on an interstate highway or near a state line. It was not listed in any travel guide. It was not listed in any restaurant guide. It was not advertised in any out-of-*670state media. It had no liquor license, accepted no credit cards, and took no reservations. It was closed on Sundays.
Even if the rules governing summary judgment were correctly ignored by the Board, these facts do not meet the threshold criterion of services “rendered in commerce”, as defined by law and policy.
This court can not ignore the potential impact on all commerce of authorizing national registration of local marks based on reduced standards for determining use in commerce: the issue on which Senator Pepper sought assurance from Congressman Lanham and Miss Robert. The Lanham Act does not and need not apply to predominantly local services. The state trademark registrations of fifty states are designed for this purpose.
I would reverse the Board’s grant of summary judgment, and remand for development of an adequate evidentiary record and application of the correct law to the found facts.