Trademarks Require “Use in Commerce” – But What If You Need Regulatory Approval Before Selling Your Product?

| Tom CowanIan W. Gillies

The U.S. Patent and Trademark Office (USPTO) allows for a trademark application to be filed on an “Intent to Use” basis to establish a priority date before the mark is actually “used in commerce.” However, such use in commerce must happen before the trademark application will register with the USPTO. If your company markets pharmaceutical cosmetics, beauty devices, or other fashion related goods or services that require regulatory approval, the use in commerce requirement presents unique issues.

Typically, use in commerce is established when the goods affiliated with the trademark application are shipped between two states or to a foreign country, and with a label or packaging showing the trademark on the goods. For most industries, use of a trademark “in preparation” of sales will not suffice to satisfy the use in commerce requirement. Additionally, a trademark owner is only given three years to use the mark in commerce and provide evidence of such use after the USPTO determines the application is otherwise ready for registration. If the owner does not submit proof that it has used the mark by the deadline, the application is deemed abandoned. Three years seems like ample time for many trademark owners, but anyone who has needed regulatory approval for a product knows the process can stretch well beyond these three years. How does one deal with this conundrum?

You may think that you should wait to file your trademark application so that you don’t run out the three-year clock. But this may allow competitors to swoop in and file intervening trademark applications. If the USPTO believes your mark is confusingly similar to the mark in a competitors’ prior application or registration, it could prevent you from being able to register your mark.

With few exceptions, the best strategy is to file your trademark application as soon as possible. Fortunately, the law provides an accommodation for trademark registrants with goods and services that require regulatory approval. Legislators recognized the fact that “commerce” varies in different industries. For instance, while some companies can sell products as soon as they are ready for market, others must undergo testing to get a stamp of approval prior to marketing or selling their products. This latter group can include pharmaceutical cosmetics and aesthetic device companies. These and other devices may require pre-market approval (PMA) or a 510(k) approval from the U.S. Food and Drug Administration (FDA), which can take many years.

Lawmakers revised the definition of “use in commerce” to state that such requirement “be interpreted to mean commercial use which is typical in a particular industry. Additionally, the definition should be interpreted with flexibility so as to encompass various genuine, but less traditional, trademark uses, such as those made in test markets, infrequent sales of large or expensive items, or ongoing shipments of a new drug to clinical investigators by a company awaiting FDA approval …” Senate Judiciary Committee Report on S. 1883, S. Rep. No. 100-515, p. 44-45 (Sept. 15, 1988).”

This expanded meaning of “use in commerce” has been generally adopted by the USPTO and the courts. Therefore, shipments across a state line that include use of the mark for testing, investigation, studies, and similar efforts may satisfy the “use in commerce” requirement within industries that require regulatory approval. This may be true even if regulatory approval and sales to customers are many years down the road.

A key factor is whether the use is genuine. A token “use” just to obtain a trademark registration will not suffice for any industry. But if there are legitimate efforts being undertaken for getting a product ready for the market, and your company falls within one of these regulatory carve-outs that provide for earlier use in commerce, you should consider using your company’s mark as soon as possible in connection with all pre-approval activities. Whether such use is sufficient to constitute “use in commerce” under the law will depend on the particular facts of each situation. Even if you are unable to submit evidence of use prior to the PTO deadline, however, you will have prevented others from registering confusingly similar trademarks during the pendency of your application. In addition, you may file a new application for the same mark prior to the expiration of the first application. This will give you additional time to begin using the mark in commerce. You should consult with legal counsel for guidance with your particular facts.

Editor: Catherine Holland