Best of 2009: Keeping it real — the ultimate use in commerce
The TTABlog® reports, again, on the fraud issue, but that’s not what interests me here so much this time. Rather, it’s the question of the lifecycle of a trademark’s “use in commerce” status when plotted against that of a specific product which may no longer be manufactured, but which arguably may have trademark significance.
I have looked at this question in other contexts before, particularly in this post where I wrote about a company called River West Brands, that pokes through the junk-heap of “abandoned” consumer-products trademarks and tries to make money off them. The focus in that post was on trademarks for lines of goods that no
longer exist, and I linked to related items by Pam Chestek and, guess what, John Welch that dealt with the issue. But here there’s a twist: The trademark, WAVE, is very much alive in Bose’s successful line of high-end audio equipment. But, as befits a “fraud on the PTO” case, the focus here is on one particular product in the list of goods and service that is no longer in production. Can the trademark still be a trademark?
As John Welch explains, “The TTAB, in Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (TTAB 2007)…, found that Bose had committed fraud in its 2001 renewal of a registration for the mark WAVE for, inter alia, audio tape recorders and players.”
In other words, Bose was found to have committed “fraud” because the list contains the tape recorders and players, but by the time Bose renewed its mark in 2001 it should not have continued to seek trademark registration for a product it no longer sells.
Bose acknowledged that it stopped manufacturing and selling audio tape recorders and players in 1996-97. Nonetheless, it did not delete those goods from the WAVE registration when filing for renewal. Bose contended that the renewal was proper “because owners of audio tape recorders and players continue to send their previously purchased goods to opposer for repair services and upon completion of the repair services opposer ‘transports’ them back to the owner.
This is a great argument, but evidently the TTAB didn’t buy it because there was no case law to support it, according to John. As he says in a 2008 article:
The Board noted that Bose offered no case support for its theory that “transporting” a product back to its owner after repair constitutes use of a trademark on the product as contemplated by Section 45 of the Trademark Act. It acknowledged that a sale of goods is not necessary to establish trademark use; shipment of samples and prototypes may suffice, but the entity causing the shipment must be the owner of the goods at the time of transportation. Here, “the scenario presented by opposer does not constitute use sufficient to maintain a registration for goods.” The question then became “whether it was reasonable for opposer to believe that it did.” The Board found that it was not, because Bose “could not point to case law that supports” its interpretation of the statute.
I don’t have the appellate briefs, though I suppose an argument not made before the TTAB cannot be the basis of an appeal before the CAFC. But I wouldn’t have argued that “shipment” of merchandise is the trademark use that justifies continued registration. I would have argued that where, as here, (1) the trademark is still is very much in use by the company that manufactured the tape recorders and players not so long ago, and (2) consumers still have those machines and, indeed, are shipping them to Bose for repair, the trademark “use” was not the shipping but the repairing itself. The maintenance of the item by Bose to the level of quality deemed appropriate by Bose is certainly trademark use.
After all, it is now established law that a trademark holder retains “downstream” trademark rights with respect to altered goods or others that are materially different from what the trademark owner sells under its mark: “When unauthorized, down-stream sales of a trademarked [sic] item cause consumer confusion or dilution of a trademark, the purposes of trademark law have been frustrated, and the trademark owner is therefore entitled to relief.” Dan-Foam A/S v. Brand Named Beds, LLC, 500 F.Supp.2d 296, 317 (S.D.N.Y 2007) (just to pick a recent case from my neighborhood).
Based on that general principle, the Ninth Circuit explicitly held in Karl Storz Endoscopy America, Inc. v. Surgical Technologies,285 F.3d 848 (9th Cir. 2002) that an unauthorized repair shop, by completely rebuilding a product protected by trademark such that it constituted “a different product from that of the original manufacturer, was engaged in ‘use in commerce’ of the trademark under Lanham Act. The repair company, the court held, was “trading on the goodwill of, or association with, the trademark holder.”
If third party repairs of a branded item, premised on that item’s branded value which is protected by trademark, constitutes use in commerce giving rise to infringement by the third party, should the trademark holder’s analogous, but of course authorized, repair of its own trademark-protected product — premised on the same good will — be any worse?
Perhaps the response is that the registrations do not cover services, i.e., repairs of merchandise, so why should the provision of a service act to as use in commerce of a good? I would retort that servicing their own merchandise would indeed be a separate category of use in commerce, if they were claiming it, but the focus here is on the goods, not the service, and of necessity use will take the form of some activity.
The activity here that constitutes use in commerce is not servicing Bose products so much as keeping Bose products Bose products. And if hollowing out a Bose radio, or a Rolex watch, or an AC spark plug while keeping the brand on it qualifies as use in commerce for infringement purposes, the trademark owner’s own continued “ownership,” i.e., taking of responsibility of quality control, for one discontinued product among a set of still active related products should be use in commerce, too.
By doing so, Bose is doing exactly what the Lanham Act wants done: ensuring that Bose is a Bose is a Bose is a Bose.