Christian Faith Fellowship Church v. Adidas AG
841 F.3d 986, 120 U.S.P.Q. 2d (BNA) 1640, 101 Fed. R. Serv. 1326 (2016)
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Rule of Law:
A single intrastate sale of goods to an out-of-state resident is sufficient to constitute 'use in commerce' under the Lanham Act. The Act's definition of commerce is coextensive with the full scope of Congress's regulatory power under the Commerce Clause, which does not recognize a de minimis exception for individual economic transactions.
Facts:
- Christian Faith Fellowship Church, located in Illinois near the Wisconsin border, has parishioners from both states.
- In January 2005, the Church began selling apparel marked with 'ADD A ZERO' in its bookstore as part of a fundraising campaign.
- In February 2005, the Church sold two 'ADD A ZERO' hats for $38.34 to Charlotte Howard.
- Howard, a resident of Wisconsin, paid with a personal check that displayed her pre-printed Wisconsin address.
Procedural Posture:
- In March 2005, Christian Faith Fellowship Church filed applications with the U.S. Patent and Trademark Office (USPTO) to register its 'ADD A ZERO' marks, which the USPTO granted.
- After the USPTO refused adidas AG's application for 'ADIZERO' based on a likelihood of confusion, Adidas petitioned the Trademark Trial and Appeal Board (TTAB) to cancel the Church's registrations.
- Adidas argued, among other things, that the Church had failed to use the marks in commerce prior to registration.
- The TTAB agreed with Adidas, finding the Church's single sale of two hats to an out-of-state resident was de minimis and insufficient to establish use in commerce.
- The TTAB ordered the cancellation of the Church's trademarks.
- Christian Faith Fellowship Church, as appellant, appealed the TTAB's final judgment to the U.S. Court of Appeals for the Federal Circuit.
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Issue:
Does a single, intrastate sale of two trademarked hats to a known out-of-state resident, which the Trademark Trial and Appeal Board deemed de minimis, constitute 'use in commerce' under the Lanham Act sufficient for federal trademark registration?
Opinions:
Majority - Stoll, Circuit Judge.
Yes. A single, intrastate sale of goods to an out-of-state resident constitutes 'use in commerce' under the Lanham Act. The court reasoned that the Lanham Act defines 'commerce' as all commerce that Congress may lawfully regulate, which is coextensive with the broad power granted by the Commerce Clause. Citing Supreme Court precedent like Wickard v. Filburn and Gonzales v. Raich, the court explained that Congress can regulate purely local economic activities that, when viewed in the aggregate, have a substantial effect on interstate commerce. The 'de minimis' character of an individual transaction is therefore irrelevant. Because the sale of goods to an out-of-state resident is a quintessentially economic activity, it falls within this regulatory power, thus satisfying the Lanham Act's requirement for trademark registration.
Analysis:
This decision clarifies that the threshold for 'use in commerce' under the Lanham Act is remarkably low, aligning it with the modern, expansive interpretation of the Commerce Clause. By explicitly rejecting a de minimis exception, the court lowered the barrier for small businesses and entities to obtain federal trademark protection based on minimal interstate activity. This ruling invalidates prior, more restrictive tests from the Trademark Trial and Appeal Board and solidifies that any economic transaction subject to congressional regulation, no matter how small, can serve as a basis for federal trademark rights.
