Obtaining trademark registration requires that a mark be used with its associated goods or services in interstate commerce. Businesses selling from locations in two or more states, or with locations in the United States and internationally clearly meet the interstate commerce use requirement. However, can a business located only within a single state and providing products or services only in that state also meet the commerce requirements for federal trademark protection?
A party doing business in a single state meets the interstate commerce use requirement if its activities have a “direct impact” on interstate commerce. While this rule sounds simple, the determination of whether there has been a direct impact is based on a highly factual, case-by-case review. In analyzing this issue, Courts have gone either way—sometimes finding interstate commerce use, and other times not.
Recently, the Trademark Trial and Appeal Board illustrated the depth of factual analysis applied in this issue. In Doctor’s Associates Inc. v. Janco, LLC , Janco sought to register FLATIZZA for pizza. It had opened two fast service, Italian style restaurants in Bothell and Kirkland, Washington where it sold pizza and other food. Janco believed it had a direct impact on interstate commerce. Doctor’s Associates argued that Janco had not used its mark in interstate commerce.
Out-of-State Customers
The Federal Circuit has previously held that a restaurant with one location in one state is operating in the interstate commerce if its mark has been used in connection with serving out-of-state customers. In Larry Harmon Pictures Corp. v Williams Rest. Corp., the Court reviewed the facts associated with a restaurant that was located within an hour’s drive of a major population center comprised of the territories of three states—Tennessee, Mississippi, and Arkansas. The restaurant applicant also demonstrated it had served customers from out-of-state and had been featured in publications from New York to Florida. The applicant estimated that 15% of its business came from out of state, and submitted affidavits from out-of-state customers to support this claim. The court found that the restaurant’s services provided to out-of-state customers had a sufficient impact on interstate commerce to qualify for registration.
In Doctor’s Associates, however, Janco claimed, but did not provide any evidence that out-of-state customers had been served, and introduced no evidence that the mark had been featured in out-of-state advertising or restaurant guides.
Proximity to Interstate Highways
Courts have also looked to proximity to interstate highways, where some of the travelers on the highways don’t live in the state, but are driving through it. For example, in In re Gastown, the applicant operated a chain of car and truck service stations throughout Ohio, with some of them located along interstate highways. Evidence showed that the applicant had provided repair services to out-of-state vehicles and also included billing records for customers from outside of Ohio. The court found this sufficient to establish a direct impact on interstate commerce.
Janco claimed, without introducing evidence, that its restaurant located in Bothell was located three miles from Interstate 5. However, the Board found this unpersuasive, distinguishing Gastown by noting that while the Bothell restaurant was three miles from I-5, interstate travelers would be required to drive in a reverse direction from the highway, or take side roads to actually get to the restaurant.
Internet Exposure
Janco also argued that it had a national Internet presence through a website, web advertising, Facebook and Twitter accounts, and Yelp reviews from customers as far away as Arizona and New York. However, Janco did not introduce any evidence that out-of-state customers had ever accessed its website or Facebook account, or posted a review on Yelp. The Board concluded that this lack of evidence could not support a finding that Janco had impacted interstate commerce.
Two Takeaways
Doctor Associate’s reinforces two concepts for businesses with locations only in one state that want to federally register their marks. First, the mark must be associated with goods introduced into, or services that have a direct impact on, interstate commerce. Second, this direct impact should be supported by solid evidence of interaction with out-of-state customers. Examples include affidavits, billing records, or electronic records of these out-of-state customers interacting with the business’ website, Facebook account, or Yelp reviews. Otherwise, the trademark registration may be found void for lack of use in commerce.
[1] 2016 TTAB LEXIS 8 (TTAB January 7, 2016)(Non Precedential)
[2] 929 F.2d 662 (Fed. Cir. 1991).
[3] 326 F.2d 780 (CCPA 1964).