In a precedential decision by the Trademark Trial and Appeal Board (TTAB) of the U.S. Patent and Trademark Office, opposer AutoMedx Inc. (AutoMedx), represented by Hogan Lovells, was granted protection for its SAVe mark on portable ventilators after establishing its priority of use over the mark SAVE for similar goods sought to be registered by Applicant ArtiVent Corporation. The TTAB held that AutoMedx's sale of portable ventilator prototypes to the Air Force for demonstration and testing purposes prior to receiving approval from the U.S. Food and Drug Administration (FDA) for use of the device on human subjects qualified as a bona fide use of the mark in commerce sufficient to establish priority of use.
On 10 October 2006, ArtiVent Corporation filed an intent to use application for the mark SAVE in connection with medical devices, namely ventilators. AutoMedx opposed the registration on grounds of priority of first use and likelihood of confusion, but the issue in the case turned on priority of use. AutoMedx argued that it obtained a priority interest in its mark before ArtiVent's actual or constructive use when AutoMedx used its SAVe mark in commerce to identify portable ventilators sold to the Air Force prior to the filing date of ArtiVent's trademark application.
Through deposition testimony, AutoMedx demonstrated that sales to the military made in April 2005 and August 2006 for five prototype ventilators, while small in quantity, were typical in the medical device industry due to the need for continued experimental testing, and therefore constituted a legitimate use in the ordinary course of trade. To establish which party had prior use of the mark, the TTAB relied on the definition of "use in commerce" in Section 45 of the Trademark Act. Under the Act, "use in commerce" is defined as the "bona fide use of a mark in the ordinary course of trade, and not merely to reserve a right in a mark." The TTAB noted the definition should be construed broadly based on legislative intent that "use in commerce" be interpreted based on what is "typical in a particular industry." The TTAB agreed with case law recognizing test marketing as a sufficient and bona fide use of a mark, even despite resulting small sales volumes.
The TTAB recognized that AutoMedx's sales for testing purposes were commercially reasonable in the field of medical devices because the purpose for the sales was to test and refine the product and not solely to reserve a right to register a mark. The initial ventilators were designed as test models to demonstrate to potential customers in the military the efficacy and utility of the device for battlefield applications in advance of receiving FDA approval for use of the devices on human subjects. Thus, the purpose of the sales was for testing and not for human consumption. This constituted a legitimate business purpose for the sales because it confirmed that the purpose of the sales was not to reserve the mark for future registration. FDA approval for the sales was not required to show a bona fide use, nor did the absence of FDA approval negate an actual use in commerce. A showing of a bona fide use of the mark for legitimate business purposes was sufficient to establish AutoMedx's priority of use in commerce and was sufficient grounds for rejecting ArtiVent's trademark application for its confusingly similar mark.