In Aycock Engineering, Inc. v. Airflite, Inc., 530 F.3d 1350 (Fed. Cir. 2009), the Federal Circuit held that the “use in commerce” element of the Lanham Act is not met when a trademark applicant “uses a service mark in the preparatory stages of a service’s development, but never offers the service to the public.”
In the 1940’s, trademark Applicant William Aycock conceived of and began work on a service involving chartering flights in the air taxi industry. Specifically, Aycock intended, through his service, to allow solo air travel passengers to arrange flights on chartered aircraft for less cost. Aycock did not intend on operating the air taxi service himself. Instead, his goal was to act as a middleman between the customers and one of the air taxi service operators he contracted with to provide flights on an individual seat basis. To that end, in the mid - 1960’s Aycock formed Aycock Engineering and in March, 1970, Aycock invited almost all air taxi operators certified by the FAA to join his operation by distributing flyers with in-depth information about his proposed AIRFLITE service. In August 1970, Aycock filed for a trademark application for AIRFLITE, with a subsequent registration on the Supplemental Register issuing in April 1974 for “[a]rranging for individual reservations for flights on airplanes.”
In 2001, Airflite, Inc., the Petitioner-Appellee, filed a petition for cancellation of Aycock’s AIRFLITE registration alleging, inter alia, that Aycock had not used, prior to the filing of the application, the mark AIRFLITE in connection with the services identified in the registration. It is important to remember that at the time Aycock’s original application was filed, there were no “intent-to-use” provisions available to applicants and thus an application had to be based on actual use of the mark in commerce. The Trademark Trial and Appeal Board (“TTAB”) agreed with petitioner Airflite and cancelled Aycock’s registration on use requirement grounds. The Federal Circuit, reviewing the TTAB’s legal conclusions de novo and its factual findings for the existence of substantial evidence to support the conclusion, affirmed the TTAB’s decision to cancel the registration.
Before turning to the question of whether Aycock had actually used the AIRFLITE mark on the services set forth in his registration prior to the filing of the application, the court had to decide whether the TTAB had properly characterized the claimed services. Although the recitation of services set forth in the challenged registration were stated as “arranging for individual reservations for flights on airplanes”, the court agreed with the TTAB that the scope of that recitation was properly viewed in light of the prosecution history surrounding the recitation. In that light, the court agreed with the TTAB that the claimed services actually were “arranging for the transportation of a person from one place to another or providing a communication service between a person desiring custom air travel and an air taxi operator.” Thus, the court found that the services encompassed more than “the arranging of the network of air taxi operators”, which is what Aycock had repeatedly claimed to be his services during prosecution of the application.
Using the foregoing explanation Aycock’s services, the court turned to the question of whether Aycock had actually used his claimed AIRFLITE mark on such services prior to the filing of his application. The court explained that for service marks the “use in commerce” requirement is met when (1) a mark is “used or displayed in the sale or advertising of services”; and (2) either (i) the services are “rendered in commerce,” or (ii) the services are “rendered in more than one State or in the United States and a foreign country and the person rendering those services is engaged in connection with the services.” The court also explained that prior to the effective date of the Trademark Law Revision Act, U.S. trademark law allowed for “token use” (i.e., an applicant’s use of a mark for the sole purpose of obtaining registration). For applications filed after 1989, an applicant must establish a bona fide use of the mark prior to obtaining a registration. The Federal Circuit stated that for pre-1989 cases, without question “advertising or publicizing a service that the applicant intends to perform in the future will not support registration.” The “[m]ere adoption (selection) of a mark accompanied by preparations to begin its use are insufficient … for claiming ownership of and applying to register the mark.”
The court then discussed various cases that had explored the “use in commerce” provision for service marks and finally turned to the ultimate issue of the present case: whether Aycock had made an open and notorious rendering, or offering, of his service to the public prior to the filing of the application. The court agreed with the TTAB that he had not made such an offering because Aycock did not give a potential customer the chance to use his AIRFLITE service and he never arranged for a single flight between a customer and an air taxi operator. Further, Aycock’s activity of setting up two toll free phone numbers and contacting air taxi operators did not constitute a service that falls within the actual scope of his claimed services because such activities were not offers of the service, but rather his attempts to build the service’s infrastructure.
In affirming the TTAB’s decision to cancel the registration, the Federal Circuit found that Aycock’s AIRFLITE service mark application did not meet the use requirement when it was filed in 1970 and was thus void ab initio. The Court further concluded that Aycock did not satisfy the use requirement in connection with any of his subsequently-filed renewal applications.
Judge Newman dissented, noting that the registration was “unchallenged for decades, until an apparent later user, who selected the same word ‘Airflite’ as its trade name for a different business, brought this cancellation action”. She opined that “[i]f indeed a flaw in the registration is now discovered, after thirtyfive years, it should be clarified and corrected, not void ab initio.” Specifically, the Judge Newman took issue with the TTAB’s holding that AIRFLITE was not a registrable service mark because Aycock was using the mark to recruit air taxi operators and that such use did not constitute a registrable service because “[t]his issue was not raised in the cancellation proceeding, was not briefed by either party, and was not properly before the Board.”
Regardless, the Judge Newman opined that the TTAB erred by ruling that Aycock’s AIRFLITE services did not meet the requirement that a registrable service “must be performed to the order [of], or for the benefit of, someone other than the applicant” stating that “the air taxi operators who entered into contracts with Aycock, paying a fee, obviously had their own benefit in mind.” Finally, turning to the substance of the TTAB’s decision, the dissent pointed out that that it was not disputed that the services of recruiting air taxi operators and contracting with them was performed in commerce and that “the specimens filed with the application show display of the mark AIRFLITE in Aycock’s advertising of its services to air taxi operators nationwide, and the record states that Aycock obtained contracts with about a dozen air taxi operators.” Moreover, “[t]here was no finding of discontinuance or abandonment of the activity. Slow commercial progress, or absence of income or profit, is not a ground of cancellation of registration.”
Finally, Judge Newman discussed the prosecution history of the mark and the various iterations of services which ultimately led to the services that were accepted by the Examiner, concluding that “[t]he Lanham Act has traditionally been applied to support the commercial activity that is implemented through the marks of trade, with liberal opportunity to correct errors. It is a negation of these principles now to hold that the AIRFLITE registration of thirty-five years was void from the start, because the applicant acquiesced in a prosecution description that is now susceptible to misconstruction. It is incorrect to construe the description in a manner that invalidates it by ignoring the actual services that were performed.”