Aycock Engineering, Inc. v. Airflite, Inc.
560 F.3d 1350 (2009)
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Rule of Law:
To satisfy the 'use in commerce' requirement for a service mark registration under the Lanham Act, the applicant must actually offer the services to the public. Preparatory activities to launch a service, without an open and notorious offering to the public, are insufficient to constitute rendering a service in commerce.
Facts:
- In the late 1940s, William Aycock conceived of a service, to be called 'AIRFLITE', that would act as a communication link or middleman for arranging individual seats on chartered air taxi flights.
- Aycock believed he needed at least 300 air taxi operators in his network for the service to be operational.
- In the mid-1960s, he formed Aycock Engineering, Inc., obtained two toll-free telephone numbers for future public use, and in 1970 began marketing the AIRFLITE service to air taxi operators.
- Aycock Engineering entered into contracts with a small number of air taxi service operators, who paid modest initiation fees to participate in the planned network.
- At its peak, Aycock Engineering had contracts with only twelve operators, representing 4% of its minimum goal.
- Aycock Engineering never marketed the AIRFLITE service to the general public, never gave the public an opportunity to use the toll-free numbers, and never arranged a single flight for any passenger.
Procedural Posture:
- Aycock Engineering, Inc. filed an application for the 'AIRFLITE' service mark with the USPTO on August 10, 1970.
- The USPTO registered the mark on the Supplemental Register on April 30, 1974.
- The USPTO granted Aycock Engineering's application to renew the mark on April 27, 1994.
- In 2001, Airflite, Inc. filed a petition for cancellation with the USPTO Trademark Trial and Appeal Board (TTAB).
- The TTAB granted the petition and cancelled the registration, finding that Aycock Engineering failed to render the service in commerce.
- Aycock Engineering, Inc. (Appellant) appealed the TTAB's decision to the U.S. Court of Appeals for the Federal Circuit, where Airflite, Inc. was the Appellee.
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Issue:
Does an applicant's use of a service mark during the preparatory stages of developing a service, without ever actually offering that service to the public, satisfy the 'use in commerce' requirement for service mark registration under the Lanham Act?
Opinions:
Majority - O'Grady, District Judge
No. An applicant's preparations to use a mark in commerce are insufficient to constitute 'use in commerce'; the mark must be actually used in conjunction with services that are rendered in commerce. The Lanham Act requires not only that a mark be 'used or displayed in the sale or advertising of services,' but also that 'the services are rendered in commerce.' Citing precedent from the Trademark Trial and Appeal Board (TTAB), the court explained that advertising a service intended for the future does not support registration; there must be an 'open and notorious public offering of the services to those for whom the services are intended.' Aycock Engineering's activities—forming a corporation, obtaining phone numbers, and contracting with a few air taxi operators—were merely preparatory steps to build the service's infrastructure. Because Aycock never gave a potential customer the chance to use the AIRFLITE service to book a flight, the service was never 'rendered in commerce,' and the registration is therefore void ab initio.
Dissenting - Newman, Circuit Judge
The cancellation of the long-standing registration is unjust and based on a flawed interpretation of the services provided. The TTAB erred by considering an unpleaded issue: whether recruiting air taxi operators constitutes a registrable service. The service of recruiting operators and building a network did provide a benefit to others—the operators who paid to join—and thus was a registrable service performed in commerce. Aycock used the AIRFLITE mark in advertising and contracting for this network-building service. The registration's description of services, while imperfect, should be construed to support the registration, not to define it into invalidity after thirty-five years, especially when the applicant's actual use was fully disclosed during the initial prosecution.
Analysis:
This decision solidifies a bright-line rule for the 'use in commerce' requirement for services, clarifying that pre-launch and business development activities are not sufficient for registration purposes. It emphasizes that a service must be truly 'open for business' and available to its intended public audience to qualify. This holding poses a challenge for service-based startups that may invest heavily in brand development and infrastructure before their service is publicly available, reinforcing the importance of the 'intent-to-use' application process introduced after this case's application was filed. The case serves as a clear warning that merely building the capacity to offer a service does not create registrable service mark rights.
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