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December 2012

Federal Circuit Affirms Cancellation of Registration Where Goods Were Misidentified

The Federal Circuit Court of Appeals recently affirmed the Trademark Trial and Appeal Board’s decision to cancel Lens.com’s registration for the mark “LENS” in connection with computer software, as the appellate court found that there was “no genuine issue of material fact that Lens.com did not use the mark LENS in commerce in connection with software.” Lens.com, Inc. v. 1-800 Contacts, Inc., 686 F.3d 1376 (Fed. Cir. Aug. 3, 2012), affirming 1-800 Contacts, Inc. v. Lens.com, Cancellation No. 92,049,925, 2010 TTAB LEXIS 212 (not precedential) (T.T.A.B. May 18, 2010).

Background

Lens.com is an online retailer that sells contact lenses. Lens.com obtained Registration No. 2,175,334 (“’334 Registration”) for the mark “LENS” in connection with “computer software featuring programs featuring programs used for electronic ordering of contact lenses in the field of ophthalmology, optometry and opticianry” as part of a settlement with Wesley-Jessen Corporation.

In 2008, Lens.com’s competitor, 1-800-Contacts, filed a proceeding with the Trademark Trial and Appeal Board (“TTAB”) to cancel the ‘334 Registration, claiming that Lens.com fraudulently obtained the mark, or in the alternative, abandoned the mark because Lens.com never sold or otherwise engaged in the trade of computer software.

In 2010, the TTAB granted 1-800-Contacts’s motion for summary judgment on the claim of abandonment, because the TTAB found that Lens.com’s software, as used on its website, was merely incidental to its retail sale of contact lenses.1 Therefore, the software did not constitute a “good in trade”—i.e., a good that is solicited or purchased in the marketplace for its intrinsic value.

After the TTAB denied Lens.com’s motion for reconsideration, Lens.com appealed the decision to the Federal Circuit Court of Appeals.

Factors considered to determine whether Internet service provider’s software constitutes a “good in trade”

The Federal Circuit stated that “whether consumers actually associate a mark with software, as opposed to other services, is a factual determination that must be conducted on a case-by-case basis.” The factors/questions to consider in making that determination are:

  1. Are the goods “simply the conduit or necessary tool useful only to obtain applicant’s services”?
  2. Are the goods “so inextricably tied to and associated with the service as to have no viable existence apart therefrom”? and
  3. Are the goods “neither sold separately from nor has any independent value apart from the services”?

The appellate court answered “yes” to all the above questions, as Lens.com’s software merely facilitated its customers’ online orders.

Lens.com’s situation was distinguishable from the facts in the case, Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188 (11th Cir. 2001). In Planetary Motion, the goods associated with the mark “COOLMAIL” were properly software because software was the primary product in commerce, supported by the following evidence: (a) the users associated the mark with the software, and some had even negotiated licenses for the software; (b) the software was accompanied by a user manual that identified the software as “COOLMAIL”; (c) the “COOLMAIL” software was actually itself sold worldwide.

In contrast, Lens.com only ever sold contact lenses via the Internet, and there was no indication that its customers ever associated Lens.com’s services with providing software. Therefore, the appellate court agreed with the TTAB that software was not a Lens.com “good in trade.”

An abandonment claim may be raised at any time

The TTAB had held that an abandonment claim may be raised at any time, and was a proper claim to cancel a mark that a registrant never used in association with the goods. In canceling the mark, the TTAB considered the entire application file, which is automatically part of the record in a cancellation proceeding.

Lens.com had supplied a specimen of use to the Trademark Office in conjunction with its latest declaration of use; this specimen was a screenshot of its website. Lens.com attempted to argue on appeal that the TTAB improperly considered only the specimens submitted with the application, as opposed to the entire file and other evidence. However, the TTAB had clearly stated that the specimens were only a piece of the puzzle, and after considering the entire file and all the evidence before it, there was simply no evidence that Lens.com had used the mark “LENS” in association with software.

Therefore, the appellate court found Lens.com’s arguments regarding the TTAB’s improper reliance on the specimens meritless. The cancellation of the ‘334 Registration was affirmed.

Other disputes between the parties

This Federal Circuit case is but one dispute between these two parties—1-800-Contacts and Lens.com have been before various courts since August 2007, when 1-800-Contacts sued Lens.com in Utah federal district court for trademark infringement, alleging that Lens.com purchased variants of the phrase “1-800-Contacts” as Google keywords. Lens.com won on summary judgment. 1-800 Contacts, Inc. v. Lens.com, Inc., 755 F.Supp.2d 1151, 1191 (D. Utah 2010). The Tenth Circuit Court of Appeals is currently handling two appeals that arose from the Utah district court case: 1-800-Contacts is appealing the district court’s decision on summary judgment, and Lens.com is appealing the district court’s failure to find the case “exceptional” under 15 U.S.C. § 1117 and award it attorneys fees as the prevailing party. (Tenth Cir. Appeal Nos. 11-4114 and 12­4022, respectively).

Lens.com also filed an antitrust lawsuit against 1-800-Contacts in Nevada federal district court, alleging that 1-800-Contacts’s various “sham” lawsuits against Lens.com and other contact lens providers amount to anticompetitive behavior in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Lens.com, Inc. v. 1-800 Contacts, Inc., 2012 U.S. Dist. LEXIS 48209, *2 (D.Nev. Apr. 4, 2012). The Nevada district court granted 1-800-Contacts motion to transfer venue to the Utah federal district court, where the case is now pending. Lens.com, Inc. v. 1-800 Contacts, Inc., Case No. 12-cv-00352 (D.Utah).

Practical implications of the Federal Circuit case

Trademark applicants should always take care to describe its goods or services appropriately; consulting a trademark attorney is advised. If your current trademark registrations do not accurately describe the associated goods or services, or if the trademark Examiner refuses to accept further amendments to your existing application, file a new trademark application with an accurate description of your goods and services associated with the trademark.

While the new application will take additional time and expense, and while it may hurt to lose an existing registration—especially one that is incontestable, even an incontestable registration will mean nothing if it’s deemed abandoned because you have never used the goods or services in association with the trademark.

1 As cancellation on the abandonment claim was sufficient, the TTAB declined to go into detail regarding the fraud claim. The TTAB stated briefly in a footnote that “if we were to consider the fraud claim, we would find it inadequately pled under In re Bose Corp. [580 F.3d 1240 (Fed. Cir. 2009)] and Asian and Western Classics B.V. v. Selkow, 92 USPQ2d 1478 (TTAB 2009).”

Intellectual Property

Yuo-Fong Amato



Intellectual Property

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