Trademark use in commerce- make sure it's legal

A common, and well known, rule in trademark law is "first use." I advise all clients, even if they cannot afford to file a trademark application, to start using their trademark in commerce as soon as possible. In the United States, trademark rights accrue upon use in commerce (for those that really want to know, 'use in commerce' refers to the U.S. Constitution, Article I, Section 8, Clause 3 , which allows the U.S. Congress "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.") More on "use in commerce" in a later article.

This first use rule holds that the first person or company to start actually using the mark with their good or service, in commerce, is the superior trademark holder. This can become an issue when two entities are using similar marks for similar services around the same time. The eventual winner is the one that used the mark first, and then continually, in commerce.

The Ninth Circuit Court of Appeals (the federal courts that covers much of the Western States) has just issued a ruling in the case of CreAgri, Inc. v. USANA Health Sciences, Inc. This case states:

In a contest involving competing products claiming trademark priority, the district court determined, in order to acquire priority, a "use in commerce" means a lawful use- here, a use compliant with federal labeling requirements. [District court ruling upheld]

In this case, the parties were concerned regarding first use in commerce over a trademark. It turns out (to make a long story short) that one party had been using a trademark with a nutritional supplement product that was not fully compliant with Food and Drug Administration labeling requirements. The court held, and this court of appeals upheld the decision, that the prior use in commerce, not complaint with the law, was invalid. The court only will consider lawful use in commerce when determining trademark use priority.

This is somewhat significant, in that nutritional supplements are really widespread. In the Nineties, regulations regarding nutritional supplements were relaxed, hence those lovely small print warnings we see for many "supplement" products to "treat" conditions (e.g. "the accuracy of claims have not been verified by the FDA"). Turns out that in addition to being potentially dangerous to individuals, these products cannot claim rights to a mark- unless they comply with the law.

Some might think this is common sense, but there is such a volume of nutritional supplements out there (some of which I have tried) that the noise of the claims can sometimes overwhelm the actual efficacy of the product itself. I think this is certainly a step in the right direction, in recognizing that a product not compliant with the law should not be allowed to claim stronger trademark rights. If a product does what it claims, then it should certainly be stated, verified, and then the product will sell on its own right.

The full text of this decision is available here: CreAgri, Inc. v. USANA Health Sciences, Inc., citation TBD (9th Cir. 2007)