Federal Circuit Concludes Software Used to Render Online Service Not In Use In Commerce for Trademark Purposes

Lens.com appealed the decision of the Trademark Trial and Appeal Board granting summary judgment to 1-800 Contacts and ordering the cancellation of Lens.com's registration for the mark LENS in connection with "computer software featuring programs used for electronic ordering of contact lenses[.]"

Specifically, the TTAB granted summary judgment on 1-800 Contacts's claim of abandonment, concluding that Lens.com's software was "merely incidental to its retail sale of contact lenses, and is not a 'good in trade,' i.e., 'solicited or purchased in the market place for [its] intrinsic value.'"

Because it was undisputed that Lens.com did not sell software, the issue on appeal was whether its software was a "good" that was "transported in commerce."

Although there was "ample" case law addressing goods in trade with respect to "traditional articles" used in conjunction with services, the Federal Circuit noted that there was little precedent on the question of whether an internet service provider's software is an independent good in commerce or is merely incidental to the internet service.

While the Federal Circuit agreed that "distribution of [s]oftware over the internet can satisfy the jurisdictional predicate for 'use in commerce' . . . whether consumers actually associate a mark with software, as opposed to other services, is a factual determination that must be conducted on a case-by-case basis."  And the court identified several factors to consider in making this determination, including whether the software

(1) is simply the conduit or necessary tool useful only to obtain applicant's services; (2) is so inextricably tied to and associated with the service as to have no viable existence apart therefrom; and (3) is neither sold separately from nor has any independent value apart from the services.

Applying those factors, the Federal Circuit concluded that Lens.com's software was merely the conduit through which it renders its online services, and while the software "may provide greater value to Lens.com's online retail services by enhancing the overall consumer experience, there is no evidence that it has any independent value apart from . . . rendering the service."  The court thus affirmed the TTAB's conclusion that Lens.com's mark was not in use in commerce with respect to its software and the TTAB's grant of summary judgment to 1-800 Contacts, Inc. on the question of abandonment.

The case cite is Lens.com, Inc. v. 1-800 Contacts, Inc., Case No. 2011-1258 (Fed. Cir. Aug. 3, 2012).

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