In order to register a service mark—a trademark used to promote and sell services, as opposed to goods—with the United States Patent and Trademark Office (USPTO), the owner of the service mark must be using the mark in interstate commerce. A service mark is “used in commerce” when “it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.” Lanham Act, 15 U.S.C. § 1127.
On March 2, 2015, in Couture v. Playdom, Inc., the United States Court of Appeals for the Federal Circuit ruled that the owner of a service mark who has used the mark only to advertise its services cannot prove use in commerce. Instead, the service mark owner must both use the mark in its advertising and promotion of the services and make good on its advertising offer through actual sales of those services. When deciding this issue, the Federal Circuit considered a registration for the service mark PLAYDOM, obtained by David Couture in January 2009. In his application for registration, Couture claimed he used the mark in commerce as least as early as May 30, 2008, and based this claim on his ownership of a single-page website, which stated, “[w]elcome to PlaydomInc.com. We are proud to offer writing and production services for motion picture film, television, and new media. Please feel free to contact us if you are interested: firstname.lastname@example.org.” At this time, Couture had not actually sold any of his services. His first sale did not occur until 2010.
In February 2009, Playdom, Inc., applied to register PLAYDOM with the USPTO. The USPTO denied the PLAYDOM application, saying that because Couture already had a registration for the same mark on similar services, Playdom, Inc.’s PLAYDOM was likely to be confused with Couture’s PLAYDOM. Thereafter, Playdom, Inc., petitioned to cancel Couture’s registration, arguing that because Couture had not actually sold his services as of May 30, 2008, his application was void ab initio, or from its inception.
The Federal Circuit agreed with Playdom, Inc., and found Couture’s application void ab initio because, as of May 30, 2008, Couture had not actually sold his services. In doing so, the Federal Circuit clarified earlier case law and clearly stated that an “open and notorious public offering of services,” while required, is not sufficient alone to establish the use necessary to obtain a service mark registration. Rather, “a mark for services is used in commerce only when both “ it is used or displayed in the sale or advertising of services and  the services are rendered.” The Federal Circuit canceled Couture’s registration, paving the way for Playdom, Inc., to secure its own registration.
The takeaway: when it comes to service mark use, actions speak louder than words. You must have rendered your services to obtain a registration. The corollary to this is that you should always save copies of any purchase orders, invoices, receipts, etc., from your first sales, as these can be very important for defeating a challenge to the first use date of your service mark.
Of course, had Couture filed an intent-to-use application, rather than a use-based application, the case may have had a different outcome. Once his application was approved, he would have had three years to actually start using the mark. Assuming he then did use the mark, a registration would have been issued and his filing date would have become his constructive first use date, thereby trumping the later use/filing by Playdom, Inc. This highlights the importance of seeking good trademark counsel when creating and then protecting a brand.