Service mark cancelled because software was not "good in trade"

In Lens.com v 1-800 Contacts (Case 11-1258, August 3 2012), the US Court of Appeals for the Federal Circuit has affirmed the cancellation by the Trademark Trial and Appeal Board (TTAB) of the LENS trademark registration, for use in connection with “computer software featuring programs used for electronic ordering of contact lenses in the field of ophthalmology, optometry and opticianry”, holding that the software in question was merely incidental to the sale of contact lenses and that the software was not a “good in trade” solicited or purchased in the market for its intrinsic value.

In Lens.com v 1-800 Contacts (Case 11-1258, August 3 2012), the US Court of Appeals for the Federal Circuit has affirmed the cancellation by the Trademark Trial and Appeal Board (TTAB) of the LENS trademark registration, for use in connection with “computer software featuring programs used for electronic ordering of contact lenses in the field of ophthalmology, optometry and opticianry”, holding that the software in question was merely incidental to the sale of contact lenses and that the software was not a “good in trade” solicited or purchased in the market for its intrinsic value.

Lens.com is an online retailer of contact lenses and related products. In 2008 1-800 Contacts, a competitor, instituted a cancellation proceeding at the US Patent and Trademark Office, arguing that Lens.com had fraudulently obtained or alternatively abandoned the mark because it never sold or engaged in the trade of computer software featuring programs for use in the field of optometry. Lens.com had earlier unsuccessfully applied for the mark LENS for use in connection with “retail store services featuring contacts through a global computer network”, but the examiner had determined that the mark was descriptive for the services listed in the application, and the application was refused registration.

After the TTAB granted 1-800 Contacts’ motion for summary judgment on the abandonment claim, holding that Lens.com’s software was “merely incidental” to its contact lens sales and was not a “good in trade”, Lens.com appealed.

The Federal Circuit affirmed the TTAB decision, focusing on whether the software was a good that was transported in commerce, because an article does not qualify as a “good in trade” when it is simply the conduit through which one renders its services, and there was no dispute that Lens.com did not sell software. In determining whether the LENS mark had ever been “used in commerce”, the Federal Circuit stated that a “good in trade” must have a viable existence on its own (instead of being inextricably tied to another service) and should have an independent value apart from other goods or services.

The court further held that, when determining whether consumers associate a given mark with software, as opposed to other services, courts should consider:

• whether the software is just a conduit for the applicant’s services;
• whether it is so inextricably tied to a service that it was “no viable existence” apart from it; and
• whether the software is sold separately from or has independent value apart from other services. 

The Federal Circuit concluded that Lens.com did not use the LENS trademark in commerce for the software services listed in the service mark registration and that the TTAB had properly determined that the mark LENS did not meet the “use in commerce” requirement for its software, thus affirming the cancellation order.

Ulrika E Mattsson, McDermott Will & Emery LLP, Chicago