Trademark Use in Commerce: Everything You Need To Know
Trademark use in commerce is required to establish ownership of a trademark.3 min read
2. Establishing Use in Commerce
3. Token Use of a Mark
4. Use in Commerce for Software
Trademark use in commerce is required to establish ownership of a trademark. Historically, use in commerce is defined as a product, name, packaging, or another form of branding that is sold across state lines rather than just within a state.
Registering a Trademark
Although you own a trademark simply by using it in commerce, you may also want to register your trademark. You can do so before you begin using the trademark so that the desired name or mark is reserved. Some attorneys charge about $195 to file a trademark application.
Once the United States Patent and Trademark Office (USPTO) reviews and approves your trademark application, you will subsequently be required to show proof of its use in commerce.
Establishing Use in Commerce
Your federal trademark application will require you to note the date you first used the mark, as well as a later date when it was first used in commerce. What is considered use in commerce will depend if your trademark will cover products or services. For products, proof of use in commerce could include:
- Product packaging, labels, or tags
- The product itself with the mark displayed
- Brochure or retail display
Advertising and marketing materials alone are not considered proof of commercial use for products. However, they can be used for services as long as the mark is prominently displayed and services are described.
Because the Lanham Act states that commercial use of a trademark must be lawfully regulated by Congress, certain registration standards apply for federal trademarks. This has been defined by the USPTO and the courts as the need to offer goods or services across state lines or import them from abroad. Shipped products must bear the trademark in question. Selling products or services within your own state is not considered use in commerce because it is not congressionally regulated. However, with online commerce, this distinction is less important than it was in earlier years. Selling products to other nations is also considered use in commerce by federal law.
Token Use of a Mark
For a successful trademark application, use in commerce must go beyond token use. Although no threshold of dollars or units has been established as bona fide use, courts have considered one transaction, one shipment, or a handful of sold units as insufficient use. Before 1989, token use was considered acceptable for a federal trademark application. However, the company must also possess the intent to continue using the mark even if their initial product run or shipment was very small.
The main case supporting this token use was that of Fort Howard Paper Company, which used a six-box shipment to support its federal trademark application. Their mark was successfully registered, and they followed up with additional shipments after about two years. Other cases have also allowed token use in commerce in the presence of intent to continue use.
In most cases, sales made with the intent to establish a business, even on a small scale, serve as evidence of bona fide use that will suffice for a trademark application. Sham transactions, on the other hand, are not considered acceptable use. Some examples that were rejected by the USPTO as bona fide use include:
- One jar of salt sold by one corporate officer to another
- A single shipment sent to a partner company that was immediately returned
- A small shipment of juice to a shareholder company at no charge
- A single shipment of auto parts to a business owner's spouse
Nominal, casual, or sporadic bona fide commercial transactions are at USPTO discretion. Some examples that have been rejected include:
- Sale of a single jar of cold cream in one four-year period
- Monthly acne medication shipments to wholesalers with no evidence of end users purchasing the product
- One shipment of china in a seven-year period
- Sales of perfume over 20 years that resulted in less than $100 in profit
- Use of the mark only on shoes sold by a competitor
Use in Commerce for Software
For mobile apps and other software products, the launch of the app is typically considered use in commerce. Beta testing may or may not be considered sufficient depending on the extent of the testing.
If you need help with trademark use in commerce, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.