TTAB Erred in Holding De Minimis Sales Are Not Use in Commerce: Federal Circuit | Practical Law

TTAB Erred in Holding De Minimis Sales Are Not Use in Commerce: Federal Circuit | Practical Law

In Christian Faith Fellowship Church v. Adidas AG, the US Court of Appeals for the Federal Circuit reversed and remanded the Trademark Trial and Appeal Board's (TTAB) cancellation of the "ADD A ZERO" mark, finding that de minimis usage of a mark can constitute "use in commerce" under the Lanham Act if the transaction is regulable by Congress under the Commerce Clause.

TTAB Erred in Holding De Minimis Sales Are Not Use in Commerce: Federal Circuit

Practical Law Legal Update w-004-5406 (Approx. 3 pages)

TTAB Erred in Holding De Minimis Sales Are Not Use in Commerce: Federal Circuit

by Practical Law Intellectual Property & Technology
Law stated as of 15 Nov 2016 • USA (National/Federal)
In Christian Faith Fellowship Church v. Adidas AG, the US Court of Appeals for the Federal Circuit reversed and remanded the Trademark Trial and Appeal Board's (TTAB) cancellation of the "ADD A ZERO" mark, finding that de minimis usage of a mark can constitute "use in commerce" under the Lanham Act if the transaction is regulable by Congress under the Commerce Clause.
On November 14, 2016, in Christian Faith Fellowship Church v. Adidas AG, the US Court of Appeals for the Federal Circuit reversed and remanded the Trademark Trial and Appeal Board's (TTAB) ruling that the Christian Faith Fellowship Church's (CFFC) documented sale of two marked hats to an out-of-state resident were de minimis and did not satisfy the use in commerce requirement under the Lanham Act ( (Fed. Cir. Nov. 14, 2016)). The Federal Circuit held that CCFC's sale sufficiently constituted use in commerce because it was regulable by Congress under the Commerce Clause.
In January 2005, CFFC, a church in Illinois located along the Wisconsin border, began selling apparel inscribed with the ADD A ZERO mark in its bookstore. In March 2005, CFFC filed two clothing-based applications to register ADD A ZERO in standard character form and stylized form based on use of the marks in commerce. The US Patent and Trademark Office (USPTO) issued registrations for the marks in 2006. In 2009, adidas AG (Adidas) sought a federal trademark registration for its ADIZERO mark, which the USPTO denied due to a likelihood of confusion with CFFC's marks.
Adidas then petitioned to cancel CFFC's marks on several grounds, including CFFC's alleged failure to use the ADD A ZERO marks in US commerce before registration. The TTAB granted Adidas' petition and cancelled CFFC's registrations based on its finding that CFFC's sale of two ADD A ZERO hats to a Wisconsin resident was de minimis and did not constitute use in commerce under the Lanham Act.
On appeal, the Federal Circuit reversed the TTAB's decision, explaining that:
  • The Lanham Act extends to all commerce which Congress can regulate. Here, CCFC's sale of trademarked hats fell within Congress' Commerce Clause powers because it was made to an out-of-state resident.
  • The TTAB erred in:
    • applying a de minimis test to determine whether CCFC's marks were sufficiently used in commerce because the de minimis nature of the transaction is insignificant under the Commerce Clause; and
    • requiring CCFC to present actual proof that the documented sales directly affected commerce.
  • CCFC is not required to direct the movement of goods across state lines to satisfy the use in commerce requirement. The court disagreed with the TTAB's interpretation of In re Cook, United, Inc., 188 U.S.P.Q. 284 (T.T.A.B. 1975) and In re The Bagel Factory, Inc., 183 U.S.P.Q. 553 (T.T.A.B. 1974), explaining that these cases are incorrect to the extent they suggest that the Lanham Act requires use in commerce beyond that which is sufficient for Congress to regulate under the Commerce Clause.