The United States Court of Appeals, Federal Circuit issued a ruling on November 14, 2016 that encouraged small business owners all over the country. This was a David and Goliath battle that started in 2009. The Christian Faith Fellowship Church (the “Church” or “Appellant”) takes on Goliath, Adidas AG, the apparel giant (“Adidas” or the “Appellee”). The Church started selling apparel and caps with the mark ADD A ZERO in January 2005 as a campaign to encourage fundraising for the church by increasing the contribution of the donor by adding one zero. In February 2005, the Church made one sale of two caps to an out-of-state resident bearing the mark ADD A ZERO. One month later, the Appellant filed for federal trademark registration with the United States Patent & Trademark Office (“USPTO”). Approximately four years later, Adidas filed a trademark application for the mark ADIZERO for clothing.
The USPTO refused Adidas’ application based on likelihood of confusion grounds citing the Church’s mark ADD A ZERO as a conflict. Adidas filed a petition to cancel with the Trademark Trial and Appeal Board (the “Board”) based on various grounds, one of which was failure to use the mark in commerce prior to filing the trademark application. The Board found in Adidas’ favor holding the one sale made by the Church was de minimus and thus not sufficient to satisfy the “use in commerce” requirement. The Church filed this appeal.
The Board further held that the sale for $38.34 did not effect interstate commerce. The Federal Circuit reversed the Board’s decision, holding that it was in error for the Board to rely on a precedent that required a trademark applicant to engage in commercial activity beyond the Commerce Clause’s threshold. The Lanham Act defines commerce as all activity lawfully regulated by Congress. The Federal Circuit held that Congress did have power to regulate the out-of-state sale of the two caps made by the Church. For a basic understanding of use in commerce, see our webpage entitled, For The Purposes Of Trademark Law What Is Use In Commerce.