Incontestable Newsletter - April 2009

Aycock Eng'g, Inc. v. Airflite, Inc., 2009

WL 805304 (Fed. Cir. Mar. 30, 2009)

by Dana M. Nicoletti

ABSTRACT

In a decision assessing the "use in commerce"

requirements of the Lanham Act prior to the effective date of the

Trademark Law Revision Act of 1988 and the corresponding

intent-to-use provisions, the Federal Circuit upheld the TTAB's

decision to cancel a registration where the registrant had

undertaken a number of preparatory steps to create the network

necessary to offer the services identified in its registration, but

had never actually offered those services to the general public. In

reaching its decision, the Federal Circuit emphasized that the

description of the services embodied in the issued registration (as

contrasted with the description as originally filed and amended

during a lengthy prosecution process) ultimately controlled.

CASE SUMMARY

FACTS

William Aycock formed Respondent-Appellant Aycock Engineering,

Inc. ("AEI") in 1960 to obtain charter flight seats for

individual airline passengers. At the time, air taxi companies

leased entire airplanes rather than individual seats, making it

difficult, if not financially prohibitive, for solo travelers to

locate and travel on charter flights. Operating under the mark

AIRFLITE, Aycock planned to serve as a middleman between members of

the public and a network of air taxi service operators to arrange

for individual customer flights. He planned to advertise his

AIRFLITE service to the public via a toll-free reservations

number.

In March of 1970, Aycock distributed fliers with in-depth

information about AIRFLITE to FAA-certified air taxi operators and

invited them to join his operation. During testimony, Aycock stated

that he believed he needed to contract with at least 300 air taxi

operators before his service could become operational, a goal that

was never reached. Between the 1970s and 2001, Aycock entered into

contracts with 12 air taxi service operators. While Aycock secured

two toll-free telephone numbers, he never advertised the AIRFLITE

service to the general public, nor arranged for a single passenger

to fly on a charter flight.

In August of 1970, AEI filed an application to register the

AIRFLITE mark for services. During a lengthy prosecution period,

AEI agreed to describe its services as: "arranging for

individual reservations for flights on airplanes." The mark

registered on the Supplemental Register on April 30, 1974, and was

renewed in April 1994.

In 2001, Petitioner-Appellee Airflite, Inc.

("Airflite") filed a petition for cancellation, alleging

that AEI did not use the AIRFLITE mark "in commerce" for

the covered services prior to registration. The TTAB ruled in

Airflite's favor and cancelled AEI's AIRFLITE

registration.

ANALYSIS

On appeal, the Federal Circuit considered whether AEI's use

of the AIRFLITE mark satisfied the Lanham Act's requirements

for "use in commerce." As an initial matter, the court

emphasized the need to define with particularity the nature of the

services covered by AEI's AIRFLITE mark and the ultimate

consumer to whom those services would be offered. AEI argued that

its services should be construed as the arranging of a network of

air taxi operators. The court rejected this argument, agreeing with

both the TTAB and Airflite that the covered services were more

accurately interpreted as arranging for the transportation of a

person to his destination or providing a communication service

between a person desiring custom air travel and an air taxi

operator.

Having determined the proper construction of the services and

their end user (namely, members of the public), the court turned to

the question of whether AEI had satisfied its "use in

commerce" requirement by taking initial steps to form a

network of air taxi operators but never offering its services to

the public. Having issued in 1974, the AEI registration predated

the November 16, 1989, effective date of the Trademark Law Revision

Act of 1988 ("TLRA"), which ushered in the intent-to-use

provisions and simultaneously altered the burden that applicants

must meet by requiring that an applicant make "a bona fide use

of the mark in the ordinary course of trade." This new

requirement was intended to prevent applicants from acquiring

registrations based on mere "token uses" that did not

qualify as legitimate uses in commerce.

Under Section 45 of the Lanham Act, the "use in

commerce" requirement for service marks is satisfied when: (1)

a mark is "used or displayed in the sale or advertising of

services," and (2) either (i) the services are "rendered

in commerce" or (ii) the services are "rendered in more

than one state or in the United States and a foreign country and

the person rendering those services is engaged in commerce in

connection with those services." Noting that the use

requirement for a service mark was "materially identical"

in both the pre-TLRA and post-TLRA Lanham Act, the court emphasized

that its holding should apply also to post-1989 service mark

use.

By requiring that a mark be "used or displayed in the sale

or advertising of services" and "that the services are

rendered in commerce," the language of the Lanham Act makes

clear that mere preparations to use a mark sometime in the future

are insufficient and, further, that there must be "an open and

notorious" public offering of the services to the intended

customer base for an applicant to satisfy the use in commerce

requirements. Noting that the record did not indicate a single

instance of a potential customer contacting one of the toll-free

numbers or, alternatively, that anyone associated with AEI ever

spoke with a member of the general public about making a flight

reservation through the AIRFLITE services, the court found

substantial evidence to support the TTAB's conclusion that

AEI's preparatory activities in registering toll-free telephone

numbers and soliciting members for a network of air taxi operators,

but never advertising or offering services to the general public,

failed to qualify as "use in commerce" within the meaning

of the Act. Instead, the court found that AEI undertook merely

"sporadic steps in preparing to offer" its services to

the public which, even taken together, did not constitute a service

that falls within the defined recitation of services in the

AIRFLITE registration. The court characterized Aycock's

transactions with the several air taxi operators as mere

preparatory steps that reflected attempts to build the underlying

service infrastructure rather than to offer the services

themselves. Finding that AEI did not make even a "token

use" of the AIRFLITE mark for the covered services, the court

affirmed the TTAB's decision to cancel the challenged

registration.

CONCLUSION

This decision offers a useful framework for evaluating the

"use in commerce" standard for a service mark under both

the pre-TLRA and post-TLRA Lanham Act. The court's construction

of the services covered by the challenged registration and, in

particular, its rejection of the registrant's arguments that

the prosecution history supported an interpretation of the services

apart from what appeared on the face of the registration itself,

also serves as a reminder to both applicants and practitioners to

ensure that applications contain accurate and complete recitations

of goods and services.

Cintas Corp. v. Unite Here, 2009 WL 604099

(S.D.N.Y. Mar. 9, 2009)

by

David M. Kelly

ABSTRACT

The Southern District of New York dismissed plaintiff's

trademark infringement, unfair competition, dilution, and

cybersquatting claims, finding that defendant labor union's use

of plaintiff's mark in domain names for a criticism website was

not actionable. The labor union's display of a "prominent

disclaimer," coupled with the negative content of the website,

precluded any possible initial-interest confusion. And the linking

of the criticism site to the union's website and from there to

the union's store website was too attenuated to make the

criticism website commercial or for-profit, as required for

dilution and cybersquatting.

CASE SUMMARY

FACTS

Plaintiff Cintas Corporation ("Cintas"), a leading

uniform supplier, owned the federally registered CINTAS mark.

Defendant Unite Here and other labor unions (collectively

"Unite Here") attempted to recruit Cintas employees and

pressure Cintas into recognizing it as the employees'

bargaining agent. In addition to distributing newsletters, press

releases, and letters critical of Cintas's customers and

shareholders, Unite Here also registered the domain names

cintasexposed.com/.org/.net and set up a website at

cintasexposed.org that featured union-composed "Consumer

Bulletins." These bulletins, some of which contained the

CINTAS mark, provided Cintas customers with recommendations

regarding their weekly Cintas invoices, including how to object to

price increases, how to refuse "trial" products and

services, and how to interpret the "fine print" in their

Cintas contracts. The website also had a forum for the public to

share negative stories about Cintas. Although the cintasexposed.com

domain forwarded users to the same website hosted at

cintasexposed.org, the cintasexposed.net domain took users directly

to Unite Here's website.

Cintas objected to use of its mark on the cintasexposed.org

website, claiming that the website "compete[d] unfairly"

and "generate[d] profits . . . by disparaging Cintas and its

business practices, products and services, confusing Cintas's

customers, diverting customers, sales and profits away from Cintas

and portraying Cintas in a bad light to the general consuming

public." Cintas alleged that some customers refused to

continue to do business with Cintas after seeing the website.

Cintas also alleged that the cintasexposed.org website linked to

Unite Here's website, which provided links to both Unite

Here's union store and other "Buy Union" themed

websites that published lists of competing uniform manufacturers

that employed unionized workers. The...