Using Trademark in Categories Other than the One as Filed May Result in Abandonment

Tang O. Tang | August 15, 2012

LENS.COM, INC. v. 1-800 CONTACTS, INC.

August 3, 2012

Panel:  Newman, Linn and Moore.  Opinion by Linn.

Summary

Lens.com, Inc. (“Lens.com”) appeals a decision of the Trademark Trial and Appeal Board (“Board”) granting a motion for summary judgment by 1-800 Contacts, Inc. (“1-800 Contacts”) and ordering the cancellation of Lens.com’s registration for the mark LENS due to nonuse.  The mark was filed to be used in connection with computer software, but the business of Lens.com is in the field of retail sales of contact lenses.  The issue at dispute is whether software incidentally distributed in connection with retail business in the context of an internet service constitutes a “good in commerce.” The court applies a three-prong test established in non-internet-related case law to the current case in finding nonuse of the mark, and distinguishes the current case from an Eleventh Circuit decision.

Lens.com公司就商标裁决上诉委员会批准关于注销 LENS 商标登记的动议提出上诉。 该动议由1-800 Contacts公司提出,称lens.com已停止使用该商标。该商标注册为“计算机软件相关业务”的商标,而Lens.com仅在隐形眼镜零售领域开展业务。该案中的争议问题是互联网零售业务中偶尔附带发送的软件是否构成“商品”。法院利用了建立在非互联网相关案件的判例法上的“三因素测试”认定该商标已停止使用, 并且将本案与第十一巡回法庭判决的一个互联网相关案件加以对比区分。

Background

The dispute is over the trademark “LENS” with a Registration No. 2,175,334 (“’334 Registration”), which was first issued to a non-party Wesley-Jessen on July 21, 1998. The mark as originally filed was to be used in connection with “computer software featuring programs used for electronic ordering of contact lenses in the field of ophthalmology, optometry and opticianry.” A procedural history is summarized below:

  1. PTO issued ’334 Registration to Wesley-Jessen on 07/21/1998.
  2. Lens.com applied for the mark LENS in 01/2001, to be used in “retail store services featuring contact eyewear products rendered via a global computer net-work.”
  3. PTO denied the application of Lens.com on 09/18/2001, for the reasons of “likelihood of confusion” and “merely descriptive.”
  4. Lens.com initiated a cancellation proceeding against Wesley-Jessen regarding the ’334 Registration on 03/18/2002.
  5. Wesley-Jessen assigned its ’334 Registration to Lens.com on 09/12/2002 (according to a settlement agreement.) Lens.com obtained the mark as it was originally filed.
  6. 1-800 Contacts filed Cancellation No. 92,049,925 on 09/2008, on the grounds that Lens.com “fraudulently obtained” or “abandoned” the mark LENS.
  7. The Board granted summary judgment against Lens.com on 05/18/2010, and denied Lens.com’s motion for reconsideration.
  8. PTO issued a cancelling order of the ’334 Registration on 01/26/2011

Details

The Lanham Act allows any party to initiate “[a] petition to cancel a registration of a mark . . . may . . . be filed . . . (3) at any time if the registered mark . . . has been abandoned.” See 15 U.S.C. § 1064. It is further explained that “[a] mark shall be deemed to be ‘abandoned’ . . . (1) When its use has been discontinued with intent not to resume such use. . . . Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. ‘Use’ of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.” See 15 U.S.C. § 1127. The statute defines “use in trade” as “the bona fide use of a mark in the ordinary course of trade . . . . [A] mark shall be deemed to be in use in commerce – (1) on goods when – *** (B) the goods are sold or transported in commerce. See 15 U.S.C. § 1127.

The Cancellation petition filed by 1-800 Contacts alleged that Lens.com never sold or otherwise engaged in the trade of computer software.  The Board found the software distributed by Lens.com “[was] merely incidental to its retail sale of contact lenses, and is not a ‘good in trade,’ i.e., ‘solicited or purchased in the market place for [its] intrinsic value.’” See 1-800 Contacts, Inc. v. Lens.com, Cancellation No. 92,049,925, slip op. at 8, 10 (T.T.A.B. May 18, 2010).

In appeal, Lens.com did not dispute that software was incidental to its retail sale of contact lens, but argued that:

  1. Board erred in granting summary judgment because “use in commerce” does not require the actual sale of the goods.
  2. The definition of “use in commerce” should be interpreted with flexibility so as to encompass genuine, but less traditional, trademark uses. “Distribution of . . . Software for end-users over the Internet satisfies the ‘use in commerce’ jurisdictional predicate” for a mark for software.
  3. No public awareness is required. But to the extent public awareness is required, “summary judgment was improper because there was no evidence presented on the mindset . . . of the internet users when they visited the Lens.com website.”

The appellee 1-800 Contacts maintained that Lens.com do not offer software to consumers as a good in trade, because “[i]f there is any ‘software’ to speak of, it is only ancillary to [Lens.com]’s online retail services”, and “[the] customers are completely unaware . . . that they are the recipient of downloaded ‘software’ . . . [, and] could not possibly associate the LENS mark with a source of software.” See Appellee’s Br. 12.

Court’s Approach

The Court recognizes that “the statute is clear that the actual sale of goods is not required to satisfy § 1127’s “use in commerce” requirement, provided that the goods are ‘transported’ in commerce,” but states that “not every transport of a good is sufficient to establish ownership rights in a mark.”  The court further points out that “[i]n assessing rights stemming from transportation, courts and commentators have required an element of public awareness of the use.” See Gen. Healthcare, 364 F.3d at 335.

The Court articulates a test for “good in trade” established by case law.  A “good in trade” is:

(1) simply the conduit or necessary tool useful only to obtain applicant’s services. (See Shareholders Data, 495 F.2d at 1361;)

(2) so inextricably tied to and associated with the service as to have no viable existence apart therefrom. (See In re Compute-Her-Look, Inc., 176 U.S.P.Q. 445, 446-47 (T.T.A.B. 1972);) and

(3) neither sold separately from nor has any independent value apart from the services. (See Ex Parte Bank of Am. Nat’l Trust & Sav. Ass’n, 118 U.S.P.Q. 165, 165 (Comm’r Pats. 1958).)

The Court acknowledges that the above test and related case law did not come from the context of an internet service, and notes in Planetary Motion, the Eleventh Circuit held that“[t]he distribution of . . . Software for end-users over the Internet satisfies the ‘use in commerce’ jurisdictional predicate.”  See 261 F.3d at 1194-95. However, the Court finds the current case distinguishable from Planetary Motion in whether consumers actually associate a mark with software, which basically satisfies the public awareness requirement.   In Planetary Motion, “there [was] evidence that members of the targeted public actually associated the mark Coolmail with the Software to which it was affixed.”

None of the factors in the three-prong test need necessarily be dispositive, but each may shed light on whether an applicant’s software is an independent good being “sold or transported in commerce.” The Court applies the three-prong test to the current case and finds each of the three factor works against Lens.com.

Takeaway

  1. A mark considered to be “arbitrary and fanciful,” which can be used for trademark purpose in one class may be deemed as “generic” and barred from registration as a mark in another class.
  2. In application for a mark, Applicant should carefully choose the class or classes of the mark according to their true business purposes. Using a mark in a non-registered class may lead to abandonment

Full Opinion

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