Applicant Artivent Corporation (“Applicant”) filed an intent-to-use application with the U.S. Trademark Office to register the trademark “Save” for various medical devices, including ventilators in Class 10. Automedx, Inc. (“Opposer”) opposed the application on the grounds of priority of use and likelihood of confusion. Specifically, Opposer alleged that it had used the substantially identical mark “SAVe” on portable ventilators since prior to Applicant’s filing date and that Applicant’s mark “Save” for ventilators so resembled Opposer’s previously used “SAVe” mark for identical goods so as to be likely to give rise to confusion in the marketplace.
In its defense, Applicant attacked Opposer’s priority, arguing, inter alia, that the sales made by Opposer prior to Applicant’s filing date had been made for testing purposes only and had been made prior to Opposer having received approval from the Food & Drug Administration to commercially market the devices for human use. As such, Applicant argued that Opposer could not, in fact, demonstrate the necessary priority to succeed in the opposition.
Arguing in support of its alleged priority of use, Opposer relied on its sales of the subject ventilators prior to Applicant’s October 10, 2006 filing date. The background relating to such sales was as follows: Opposer’s Chairman, through a related company, created the ventilator sold by Opposer under the SAVe name, and granted Opposer license rights in and to the patents, trade secrets and technical know-how relating thereto. Opposer presented testimony and evidence that Opposer’s Chairman had proposed the idea of a simplified automated ventilator to the Air Force and the Air Force committed $200,000 to the idea. After the U.S. Air Force and Opposer’s Chairman entered a contract, Opposer assumed responsibility for executing that contract and developing the product. Opposer delivered its first prototypes of the ventilator to the Air Force in April 2005 and filled a second order for the ventilators in August 2006. All ventilators in these two shipments were labeled with the SAVe mark and displayed Opposer’s name. Because the ventilators shipped in April 2005 and August 2006 were not FDA approved for human use, they were designated as “prototypes” or “demonstration units”, and were labeled not for human use. Indeed, these initial sales were test models to perfect the SAVe ventilator for human use. Relying on these markings and the facts surrounding the initial sales, Applicant contended that such use was neither bona fide nor lawful use, and thus that such use could not form the basis of Opposer’s priority claim.
Addressing Applicant’s arguments, the Board reviewed the meaning of “use in commerce”. Section 45 of the Trademark Act defines “use in commerce” 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 Board explained that use in commerce should be interpreted with flexibility to account for different industry practices. Relevant here, the legislative history of the 1988 Revision Act states that “a company’s shipment to clinical investigators during the Federal approval process” is considered in the ordinary course of trade.
The Board concluded that notwithstanding the fact that the initial sales to the Air Force were of products not yet approved forof business. Indeed, the Board found that Opposer’s April 2005 and August 2006 sales to the Air Force were for legitimate business reasons (i.e., to test and refine the ventilators) and not merely for Opposer to reserve the right to register the mark. In sum, each of Applicant’s arguments as to why Opposer’s mark was not a bona fide commercial use was rejected by the Board because, for among other reasons, (1) Opposer sold the prototype units to the Air Force for a legitimate commercial purpose, i.e., to test and evaluate the technology and to allow the Air Force to decide whether or not they were interested in buying more units for human use in the future; (2) the sales were arm’s length transactions in which the “SAVe” ventilators, albeit for testing and not human use, were sold and transported in commerce; and (3) oral testimony, if sufficiently probative, is normally satisfactory to establish priority of use in a trademark proceeding.
The Board was also not persuaded by Applicant’s argument that Opposer violated FDA regulations because the sales to the Air Force were sales of medical devices not approved for human use. The Board concluded that such sales, under the facts of record, were not a per se violation of any law or FDA regulation.
In ultimately sustaining the opposition and refusing to register Applicant’s mark, the Board concluded that in light of Opposer’s priority and in light of Applicant’s failure to proffer any evidence or argument on the issue of likelihood of confusion, there was essentially no question as to whether Applicant’s registration of the “Save” mark for ventilators would be likely to give rise to confusion. Thus, although Applicant denied that confusion was likely, Applicant’s failure to put forth evidence in this regard taken in light of Opposer’s priority permitted the Board to conclude, without hesitation, that Applicant’s mark was not entitled to registration. human use, such sales nonetheless constituted sales made in the ordinary course