Trademark Protection Based on Trademark Use: Nuances to Defining Trademark Use

The moment you begin using a trademark in U.S. commerce to identify the source of your goods or services, you establish what are known as “common law” rights in the trademark. What constitutes a “use in commerce” is legally defined. A “use in commerce” is defined as “the bona fide use of a mark in the ordinary course of trade.” 15 U.S.C. § 1127. As used throughout this article, and often in trademark law, a “use” of a trademark refers to the legally defined term “use in commerce.”

Determining whether your trademark is in use in commerce and the date of first use is important for 1.) determining what basis to file your trademark application under, 2.) avoiding obtaining a registration that is subject to cancellation based on non-use or fraud, and 3.) assessing your priority of use relative to any third-party user of an identical or similar mark.

A use in commerce for goods occurs when a 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, then on documents associated with the goods or their sale” and “the goods are sold or transported in [U.S.] commerce.” 15 U.S.C.  1127. Until the goods are sold or transported within the U.S. (and its territories), under the trademark, the trademark is not yet in use. A sale made as part of a usual product or service launch is sufficient, including test market sales (even sales of a few trademarked prototypes). See Nature of use necessary to support a trademark registration—Quantum of use necessary for federal registration: post-November 16, 1989 applications—A greater quantum of use is required, 2 McCarthy on Trademarks and Unfair Competition (“McCarthy”) § 19:109, 111 (5th ed.). For transportation of goods to constitute a use, the resulting use must be an open or public use. See id. at § 19:118. For example, purely intra-company shipments only for in-house experimentation, evaluation or preparation do not constitute a “use in commerce,” while a shipment of a prototype to an investor or director in an applicant company for the investor/director to use and to demonstrate to others is a bona fide transaction that supports a use-based application to register See id. Pre-ordering of goods that are not yet manufactured would not constitute a use in commerce. See id.

A use in commerce for services occurs when a trademark “is used or displayed in the sale or advertising of services” and “the services are rendered in commerce.” 15 U.S.C. § 1127. “The use of a mark in connection with advertising, promotion and preparatory activities for services to be available at some time in the future cannot support registration.” In re the Port Authority of New York, 3 U.S.P.Q.2d 1453, 1987 WL 124284 (T.T.A.B. 1987). For example, selling tickets and advertising for services that will be rendered in the future is not sufficient to support a use in commerce. See McCarthy at § 19:103. The actual performance of the services must occur for the trademark to be considered in use with such services. See id.

If you obtain rights to a trademark from a prior owner and previously licensed the trademark, your prior licensed use of the trademark may not constitute a use in commerce. Instead, your use of the trademark may commence when you begin using the trademark as the owner and not as the licensee. In particular, it is common for license agreements to say that any goodwill arising from a licensee’s usage of a trademark inures to the benefit of the licensor. If such goodwill inures to the benefit of the licensor, such licensed use of a trademark cannot constitute a use in commerce on behalf of the licensee. See Miss United States of Am. LLC, DBA United States of Am. Pageants, Cancellation No. 9207181, 2024 WL 2315710, at *10 (Mar. 8, 2024).

You can file a trademark application i.) once you are using a trademark, which is called a use-in-commerce application under Lanham Act § 1(a), or ii.) before you are using a trademark, as long as you have a bona fide intention to use the mark in commerce, which is called an intent-to-use (“ITU”) application under Lanham Act § 1(b).

If you file a use-in-commerce trademark application under a section 1(a) basis, it is important that you are in fact using the mark as of the application filing date. If you are not using the mark on or before the application filing date, any resulting registration is void ab initio and therefore subject to cancellation. The application may also be subject to cancellation for fraud if you falsely claim use of a trademark on or before the filing date, but in fact do not use the mark until after filing the application. It is also important that you do not misrepresent your date of first use on the application, though an incorrect date of first use is not detrimental to your registration so long as you were at least using the trademark prior to filing the application.

If you file an ITU trademark application under a section 1(b) basis, you obtain a “constructive use” date as of the application filing date, which confers the same legal effect as the earliest actual use of a trademark at common law. See McCarthy at § 16:17. A “constructive use” establishes priority over anyone who began use of a similar or identical mark after the constructive use date. See id. When filing an ITU application, it is important that you in fact have at least a bona fide intent to use the trademark in U.S. commerce as of the application filing date. Since this “bona fide intention” to use the mark in commerce “may be the subject of a later challenge to the validity of the resulting registration and its constructive use priority, or…the subject of a charge of fraud,” it is prudent to retain any objective evidence of such intent, which can include evidence of any steps taken to actually produce and/or advertise a new product or service or “evidence in the form of a written plan of action for a new product or service, a new line of goods, or for the re-branding of an existing line of goods or services.” See McCarthy at § 19:14.

Be careful to consistently use your trademark with your goods and services to avoid abandonment of your trademark. A trademark is deemed “abandoned” if “its use has been discontinued with intent not to resume such use.” 15 U.S.C. § 1127. In particular, nonuse for three consecutive years constitutes prima facie evidence of abandonment. See id. If you resume use of your trademark after it is abandoned due to three consecutive years of non-use, such resumption of use represents a new, separate use with a new date of first use of your trademark. See McCarthy at § 17:3.

As outlined above, there are various nuances to defining your first use of a trademark. It is therefore recommended to seek the assistance of a trademark attorney, who can help assess your trademark use and properly secure your trademark rights and priority.