Disney Draws Distinction

Written by Dennis Collins

On March 2, 2015, the Federal Circuit ruled that when using a service trademark, the “mere intent to use” was not “actual use in commerce”. In the case Couture v Playdom, Inc. 778 F.3d 1379, the court held that merely offering to provide a service does not support the “actual use” basis when filing during the application process.

In 2008, the Plaintiff, David Couture, applied to register the mark “Playdom” for as he described, “educational and entertainment services”. He filed his application under the Lanham Act, 15 U.S.C. 1051 Section 1 (a), which requires that the applicant establish the mark is being “used in commerce” in order to receive approval from the United States Patent and Trademark Office (USPTO). Use in commerce includes any tangible evidence of the mark having been a part of any transaction. By contrast, intent to use, as defined by the Federal Circuit, is having the plan of immediate use after receiving approval of the mark from the USPTO. Couture received approval from the USPTO and registered the mark. Immediate is not defined by the court, but it is expected that the trademark recipient should begin practice with the mark within a reasonable amount of time.

Couture maintained the mark on a website page which simply stated:

Welcome to PlaydomInc.com. We are proud to offer writing and production services for motion picture, film, and new media. Please feel free to contact us if you are interested.

This site indicated that it offered the services; however, there was no indication of the services actually being rendered.

In 2009, a company named Playdom attempted to register its name as a trademark, but was denied due to David Couture’s reservation of the mark. Walt Disney Company, which purchased the company Playdom in 2010, challenged the use of the mark and petitioned to cancel the mark held by Couture on the grounds of insufficient evidence of commercial use. The Trademark Trial and Appeal Board (TTAB) sided with Walt Disney Company based on the lack of evidence. The TTAB found in 2014 that Couture had still not used the mark in any commercial transaction and was only advertising a service. The advertisement of this service was moot, because the website was under construction and any potential interested customers didn’t have the ability to contact Mr. Couture.

The holding from the Federal Circuit, ultimately, hinged on the application and registration process for securing a trademark, and which was the correct section to complete. Under the Lanham Act, the applicant seeks to register a mark which they are currently using or intend to use in the future in order to reserve that mark. The distinction lies in Section 1 (a), “use in commerce” or in Section 1 (b), “bona fide intention . . . to use a trademark in commerce.” Robert Couture applied his trademark under Section 1 (a) despite having no evidence of any prior commercial transactions. There were no sales reflective to the purchase of the services selected in the registration, and in fact, there was not ever any ability to request the services. While these are not the only two options when applying for a trademark, they are the two options when seeking to file for a domestic trademark in the United States.

Implications

            If an applicant is filing for a mark under the “use in commerce” section of the Lanham Act, the mark must actually be in use. In the case of David Couture, his mark was invalidated due to the lack of the service actually being rendered. Those seeking to file for a service mark with the purpose of future use should file under the intent-to-use application. The Federal Circuit has drawn a distinction and now requires more “use in commerce” than just an advertisement for those services such as actual sales of the services (or goods) cited in the registration. David Couture’s case is currently being appealed to the Supreme Court to determine what the term “use” means in the internet age.

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