In Couture v. Playdom, Inc., the Federal Circuit answered the long unsettled question of whether “the offering of a service, without the actual provision of a service, is sufficient to constitute use in commerce” to support a service mark in-use application. No. 2014-1480 (Fed Cir. Mar. 2, 2015). Building upon its opinion in Aycock Eng’g, Inc. v. Airflite, Inc., 560 F.3d 1350, 1353 (Fed Cir. 2009), where it held that the use in commerce requirement is not met when an applicant merely uses a service mark in the preparatory stages of a service’s development, but never offers the service to the public, the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (“TTAB”) recent decision to cancel the mark at issue for failure to actually render the services advertised. These recent decisions make clear that a future applicant must actually offer and provide the service to the public before submitting an in-use application for a service mark.

David Couture’s (“Couture”) service mark PLAYDOM was registered by the United States Patent and Trademark Office (“USPTO”) on January 13, 2009. Couture’s application was based on use in commerce under the Lanham Act, 15 U.S.C. § 1051(a)(1) (the “Act”). Under the Act, a mark is used in commerce when “it is used or displayed in the sale or advertising of services and the services are rendered in commerce.” 15 U.S.C. § 1127. To show use, Couture submitted a screenshot of a www.playdominc.com, a website he launched in May 2008. The single page website stated: “Welcome to PlaydomInc.com. We are proud to offer writing and production services for motion picture film, television, and new media. Please feel free to contact us if you are interested: playdominc@gmail.com.” The USPTO registered the mark on January 13, 2009, and, while the website offered services, Couture did not actually render any services under the mark until 2010.

In February 2009, Playdom, Inc. (“Playdom”), a subsidiary of Walt Disney, filed an application to register PLAYDOM. Playdom’s application was denied because of Couture’s existing registration, and the company filed a petition with the USPTO to cancel Couture’s registration. Playdom claimed that Couture’s application for registration was void ab initio because he had not rendered any services on or before the filing date of the application.

The TTAB agreed with Playdom, and cancelled Couture’s mark. In its opinion, the TTAB noted Couture’s misunderstanding of the technical definition of use in commerce. While Couture thought that advertising or offering services was sufficient to establish that he was rendering the services, according to the Board, Couture’s website advertising his services was irrelevant, because the advertisements failed to address whether “[Couture] had actually made technical use of his service mark sufficient to support registration as of the filing date of his application.” Merely creating a website advertising his “readiness, willingness and ability to render said services” was insufficient to support an in-use application. Couture appealed the TTAB’s decision to the Federal Circuit.

Unfortunately for Couture, the Federal Circuit agreed with the TTAB. First, the Federal Circuit revisited its Ayock opinion in which it stated that “at the very least, in order for an applicant to meet the use requirement, there must be an open and notorious public offering of the services to those for whom the services are intended.” The Federal Circuit, however, clarified that the above language did not suggest that an open and notorious public offering alone is sufficient to establish use in commerce. Rather, the Federal Circuit held that the advertising or publicizing of a service alone will not support registration unless it relates to an existing service actually being rendered. The court also cited several Courts of Appeals’ decisions for support. Importantly, the Federal Circuit denied Couture’s attempt to revise his original application to an intent-to-use application, holding that a substitution of basis may only occur before a mark registers.

Playdom highlights the importance of choosing the correct basis when filing a service mark application. Had Couture filed an intent-to-use application, Couture would likely have avoided cancellation of the mark if he waited to show use until the services were actually rendered, as a person can file for an intent-to-use based mark so long as there is “a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce.” 15 USCS § 1051(b)(1). Such intent was evident here. In the end, Couture’s misunderstanding of the use in commerce requirements cost him his mark. Therefore, when in doubt as to whether a service mark is in use, it is probably advisable to file an intent-to-use application.

 

Julie A. Hopkins holds a B.A. in Biology from Smith College and a J.D. from the University of Maryland Carey School of Law.  She is a Partner and Chair of the Intellectual Property Practice Group at Tydings & Rosenberg, LLP and practices all areas of intellectual property law including patents, trademarks, and copyrights.   Ms. Hopkins serves as Chair-Elect and Programs Chair of the Maryland State Bar Association IP Section.  She would like to thank Thomas Joraanstad and Jacob Byrne for their assistance writing this article.