Federal Circuit Precedential Decision: Use in Commerce Requires Sales and Rendering of Services, Advertising Alone is Insufficient

In a precedential ruling last week, the Federal Circuit issued a decision clarifying that services must be sold and rendered in order to satisfy the "use in commerce" requirement for registration under the Lanham Act. In Couture v. Playdom, the Federal Circuit held that advertising and offering services without rendering those services does not satisfy the "use in commerce" requirement for registration. In this case, the Appellant, Mr. Couture, filed an application to register the PLAYDOM mark on a pro se basis without the assistance of trademark counsel, using as a specimen of use a printout of a website promoting the services that included the designation—Website Under Construction." Appellee, Playdom, Inc., filed an action to cancel the PLAYDOM trademark on the basis that Mr. Couture had not actually sold or rendered services in connection with the mark when he filed the use-based application. Discovery proved this to be true. The Trademark Trial and Appeal Board cancelled the PLAYDOM registration and the Federal Circuit affirmed that decision on appeal, noting:

We have not previously had occasion to directly address whether the offering of a service, without the actual provision of a service, is sufficient to constitute use in commerce under the Lanham Action §45, 15 USC §1127.

While this decision is not particularly surprising given the plain meaning of the Lanham Act, it is notable that the Federal Circuit had not previously had the opportunity to clarify this point. There are also some interesting issues lingering on the sidelines in this case. For example, should it have any bearing that the USPTO issued the registration even though the website clearly included the disclaimer "Website Under Construction," and the Examining Attorney did not question whether sales had actually commenced? Should it have any bearing that Mr. Couture filed the use claim based on his good faith belief that he was in compliance with the requirements of the Lanham Act when he filed the application on a pro se basis and the Federal Circuit had not previously clarified its position on this issue? In fraud cases, a registration will not be cancelled if it issued based on a filing that contained false representations. The representations here were made based on a good faith, albeit mistaken, understanding of USPTO requirements, and that belief proved fatal—should there be some accommodation when circumstances demonstrate a good faith misunderstanding about USPTO use in commerce requirements? And, finally, how does the decision to cancel the registration ultimately affect Mr. Couture's ability to continue using this mark? Will Playdom now be enabled to secure a registration and pursue an infringement action against Mr. Couture based on its prior use of the mark despite the fact that Mr. Couture had been using the mark in connection with selling services under for more than four years?