A minimal, good faith use standard solves – ensures equity among firms and allows for currently afflicted businesses to attain trademarks – that gives the necessary credibility to thrive.

This note advocates equal treatment for all trademark owners under the use inquiry of the Lanham Act. As in United States law, the concept of use is a bedrock principle of Australian trademark law, and it is fair to say that under both systems trademarks are born from use. Whilst both systems require use to a lesser or greater extent in order to maintain federal registration, and both adopt a measure of flexibility in analyzing this type of use, a comparison of use under both systems demonstrates that the differences are more than merely theoretical or academic. The focus on the use being open and public is less pronounced under Australian trademark law. Additionally, in contrast to the United States, Australia mandates a minimal use standard in evaluating whether there has been sufficient use of the trademark. In Australia, minor use will suffice to maintain a registration as long as it is genuine use. Put another way, genuineness trumps volume, resulting in a focus on use that is qualitative rather than quantitative. The analysis of Clorox and Gameologist suggests that uniformity under the Act has not been achieved for certain trademark owners. The benefits that adoption of a broader use requirement may have can be seen when the outcomes for the plaintiffs in Clorox and Gameologist are analyzed under use concept standards akin to the standard in Australia. Under the Australian use standard, the outcomes would have been more favorable to the respective mark owners because the use demands placed on Australian trademark owners are modest in comparison to those placed on their American counterparts. Consequently, there is a need for legislative action to amend the use requirement to better protect trademark owners who are vulnerable under the current standard. Specifically, Congress should revise the Lanham Act, broadening the use requirement to bring it more in line with the less demanding standards of Australian trademark law.

A. Broadening the Use in Commerce Standard

If a broader use requirement is to be effective, any change should indicate the types of use that would qualify as sufficient to maintain federal registration. Looking to the Australian standard, a broader use inquiry should at least include use of a trademark by way of preparatory or other steps showing an objective commitment to using the trademark that meets the jurisdictional prerequisite that the use have the requisite effect on commerce. Under such standard, there would be less emphasis on the use being open and public and greater weight placed on how that use has contributed to, and built, the mark owner’s brand.

In order to demonstrate an objective commitment to using the trademark, this category of use may encompass circumstances where an owner has not yet sold or transported a good bearing the mark, but has gone beyond mere consideration of whether to use a mark and has taken objective steps to commit itself to using the mark, such as shipping parts of branded products or building brand awareness by way of preparatory activities. In other words, use would be satisfied under this category where a mark owner could objectively demonstrate carrying its intention to use the mark into effect and such use has the necessary effect on interstate or foreign commerce. For example, if a mark owner had committed itself by taking a number of steps, such as obtaining business cards, letterhead or signs bearing the mark and taken steps towards production, evidence of such activities would constitute an objective commitment to use the mark.

The benefits of the suggested statutory amendment can be readily seen when applicants, like the applicant in Clorox, is considered. Under the broader use standard, the applicant in Clorox could have maintained its registration, assuming the applicant was ready to manufacture its custom-made goods. The combination of the advertising of the goods via the applicant’s website and shipping parts of its products across borders would suffice to constitute use under the “objective commitment to using the trademark” category.

Opponents may argue that intent-to-use applications could be filed in circumstances where the applicant is in an industry where sales are infrequent. But that argument simplifies the complexity of the matter. The current United States use inquiry does not take into account that, in some industries — especially those in which the products sold have high barriers to entry for the producer of the goods — an initial sale will be harder to obtain and the requirements for registration are thereby harder to satisfy. Additionally, arguing that an intent-to-use application could have been filed is not relevant to the continuous use issue because even if an applicant is able to obtain a sale or transportation of a good, it must continue to use the mark and have more than de minimis use in order to be considered use “in the ordinary course of trade.”

Any potential issues that may arise from the proposed changes to a broader use standard are negligible compared to the inequities under the current use standard that permits trademarks whose owners have invested heavily in obtaining a sale to later be invalidated because the use was not good enough. While the current use standard may arguably promote competition by reserving registration only to those trademark owners who have made the best use of a trademark by way of an actual sale or transportation, this rationale works against trademark owners who have to invest in the trademark in order to obtain a sale. A legislative change to broaden the use standard would provide equal protection to trademark owners, irrespective of the ease or difficulty the owner has in obtaining a sale. Such a change would thereby offer greater certainty and predictability to business.

B. The Continuous Use Standard Should be Replaced by a Minimal Use Standard

In order to achieve uniformity under the Act’s use requirement, the more than de minimis use threshold encompassed within the “ordinary course” of a mark owner’s trade should be replaced with a standard of minimal, but bona fide, use that trademark owners can rely on in order to defend against invalidation of a federal registration. In order for a minimal use standard to be effective, the Act should adopt a qualitative, rather than quantitative, analysis that considers evidence of use of the mark after the initial sale. Such evidence may include the mark owner’s ongoing efforts to promote, advertise and market the goods and such use should suffice to create trademark rights if the use is bona fide. Although some case law indicates that registration may be upheld in spite of modest sales programs, that position is not consistently applied in the case law. A lack of consistent subsequent sales after an initial sale should not be determinative of whether requisite use has been made of a mark. The courts should be instructed by legislation to consider other evidence of use including how much the business has spent on use of the mark, how many sales have been made, and what ongoing efforts the mark owner has made to promote and market the goods. Notwithstanding, use of the mark in advertising should be simultaneous with availability of the goods in the marketplace. In other words, advertising alone should not constitute use, but advertising coupled with availability of the advertised goods for sale should suffice to create use so long as the use activities meet the jurisdictional prerequisite that have the requisite effect on commerce.

An intermediate standard has been advanced by Gilson, who states that a more realistic inquiry would consider the “ordinary course” of the trademark owners own trade, not the industry in which the mark owner trades in. Under Gilson’s inquiry, relevant considerations are size of the trademark owners business and the volume of products shipped. Gilson elaborates using the following example: “[I]f Company A typically ships 5,000 cases of cola to distributors in a three-state area when launching a new brand, that level of activity should establish a trademark use standard for the company which it can refer to in filing affidavits in the Patent and Trademark Office.”

The advantages of a minimal use threshold are apparent when considering plaintiffs like the plaintiff in Gameologist. Under a qualitative minimal use focus, which focuses on the bona fides of the transactions regarding the mark, the plaintiff in Gameologist would have maintained its registration as its initial documented sale of the board game, in addition to its substantial efforts to promote its branded goods (e.g., by way of manufacture of 500 products even though only four had been sold, online advertising and negotiations with licensees), would suffice to create the requisite rights.

Critics may suggest that a minimal use approach would stem the incentive to compete embedded in the current use standard and that greater competition is fostered under the current standard by encouraging mark owners to establish themselves as quickly as possible. But this argument must be balanced against the fact that the current use standard systematically works against certain segments of the market, such as trademark owners who are small businesses or start-ups who are simply not able to quickly establish themselves. Adopting the minimal “single sale will suffice” standard of Australian law will allow American trademark owners a period of time after registration in which to establish and grow their business, without requiring immediate success judged by sales volume and significant advertising and marketing budgets. One benefit of this type of qualitative approach is that it fosters greater inclusiveness, which would better encompass the vast crosssection of commercial enterprises within the American landscape. It also means fewer federal registrations would be invalidated. Additionally, this type of approach would provide greater certainty to all trademark owners as businesses would be able to invest in a mark with greater certainty in knowing quality of use, not quantity, is the yardstick upon which a federal registration is measured. A legislative change to a qualitative, bona fide, minimal use focus thereby fosters greater equality.