Trademark Use Must Be Lawful Use in Commerce

In order for a trademark to qualify for federal registration the mark must be used lawfully in interstate commerce. If the goods or services are illegal under the law, the mark will not be able to be registered. This issue arises from time to time at the United States Patent & Trademark Office. Recently, in a precedential decision the lawful use in commerce issue was addressed in Scott Stawski v. John Gregory Lawson, 129 USPQ2d 1036 (TTAB 2018) [precedential]. The applicant was seeking a concurrent use registration for wines. The Lanham Act has been interpreted to require lawful use of a trademark in commerce prior to the filing date of a trademark application based on use.

The applicant in Scott Stawski v. John Gregory Lawson claimed he used the mark in commerce by adopting the mark as an assumed business name, and using the mark in a domain name. Using a term as your company name or trade name is not sufficient to support trademark registration; nor is it sufficient to use the term in a domain name. Since the applicant was seeking a mark to use in connection with wines, there were special requirements under the law that had to be adhered to before sales in commerce could occur. The Federal Code specifies that wine cannot be sold in commerce unless a Certificate of Label Approval (COLA) is acquired from the U.S. Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau. The Trademark Trial and Appeal Board ("TTAB" or the "Board") recently confirmed that the failure to obtain COLA from the appropriate government agency while selling alcoholic goods would be evidence that there was no lawful trademark use in commerce. Since the applicant did not acquire a Certificate of Label Approval, the use was not lawful. The Board denied the applicant's concurrent use registration.

Commercial use that constitutes a violation of a federal statute is not lawful, and cannot establish priority for trademark rights. The USPTO and Board also confront this issue with cannabis related trademark applications. See In re PharmaCann LLC, 123 USPQ2d 1122 (TTAB 2017) [precedential], where the Board affirmed refusals to register two trademarks because the recited services were prohibited by federal statute. In that case, the applicant identified the following services, "retail store services featuring medical marijuana" and "dispensing of pharmaceuticals featuring medical marijuana." The applicant alleged a bona fide intent to use the mark with the goods. But the Board concluded that the applicant could not allege a bona fide intent to make lawful use of the trademarks because the services involved the distribution of cannabis, a controlled substance. Distribution of cannabis is illegal under the Federal Controlled Substance Act.

See my blog post entitled, Trademarks And Marijuana Related Goods and Services, for more on this topic, and to understand how to protect other goods and services related to cannabis businesses. Of course, trademark registrations may be pursued in cannabis friendly states. However, keep in mind that intent-to-use applications are not accepted on the state level. But the good news is that common law rights will develop once you start using your mark in commerce. Since common law rights are limited to the geographic scope of your use, entrepreneurs will therefore benefit if they offer their goods and services on a broad basis. However, on the federal level an applicant will still need to comply with the lawful use requirement. Trademark examining attorneys are trained not to question an applicant as to whether the use is lawful. Therefore, the issue of lawful use typically arises only in cases where there is a priority dispute. If you have questions pertaining to lawful use in commerce or other trademark related questions, please contact the firm for a courtesy consultation.