Actual Use of a trademark may establish trademark rights under common law; however, if the actual use of the trademark is in interstate commerce (see definition below), then a trademark owner may apply for federal trademark protection with the USPTO. A successful federal trademark registration creates significant legal trademark rights compared to common law trademark protections.
Actual Use in Commerce
Section 45 of the Lanham Act defines what constitutes actual use in commerce. A trademark is deemed to be used in commerce when the trademark 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, or on documents associated with the goods or their sale, and the goods are sold or transported in commerce. With respect to services, a trademark is deemed to be used in commerce when placed on public displays or signs, brochures about the company’s services, advertisements promoting the company’s services, and in some situations business cards or letterheads showing the trademark in connection with the offered or advertised service. Use in commerce must be a bona fide use of a trademark in the ordinary course of trade, and not incidental use to reserve a right in the trademark.
It should be noted that a webpage is an acceptable form of “display associated with the goods.” To be acceptable, however, a webpage must meet three requirements: (1) the webpage includes a picture or verbal description of the goods, (2) it shows the trademark sufficiently near the picture or description of the goods for consumers to associate the trademark with the goods, and (3) it provides sufficient information for a consumer to order the goods.
The elements that must be met to create an enforceable trademark are: (1) a bona fide use of the trademark in the ordinary course of trade, and (2) actual use (i.e. use must not merely to reserve a right in the trademark). If a trademark fails to satisfy the use in commerce requirement, the trademark will lose its protection and be considered abandoned. A trademark is ruled abandoned when its use has been discontinued with no intent to resume the use. Non-use for three consecutive years is plain and clear evidence of abandonment. Thus, a trademark owner must be aware that a trademark registration may be deemed abandoned at anytime if the trademark is not actually used in commerce.
There are general guidelines that courts may consider when determining whether a sale or transport meets the definition of “actual use.”
Sale or Transport in Commerce
Not only must the goods contain the trademark on them, but the goods bearing the trademark must be sold or transported in commerce. The easiest way to satisfy this requirement is with a bona fide sale of the trademarked products in interstate commerce. This means that the products bearing the trademark should be mailed, shipped, or sent across state lines during the ordinary course of trade after a sale of the product. Saving the sales documents of the first sale, along with a check from the buyer, will show and establish the priority date of when actual use of the trademark began. These documents will be filed with a federal trademark application as proof of use in commerce.
Use in the Sale or Advertising of Services
Trademarks associated with a service (service trademarks) are given equal protection under the Lanham Act, allowing them to be registered and protected to the same extent as trademarks. To determine whether an entity provides a service is determined by whether or not the entity has performed some type of labor for the benefit of another. This means that the entity does not sell goods or products. Examples of providing a service is telephone companies, railroads, insurance companies, or law firms.
Just like a trademark associated with a product or good, a service trademark must be used in commerce. To satisfy use in commerce, a service trademark must be used or displayed in the sale or advertising of services and those services are rendered in commerce or in more than one state (in interstate commerce), and the person or business rendering the services is engaged in commerce in connection with those services.
Some examples on how to achieve this standard are: