Lens.Com, Inc. v. 1-800 Contacts, Inc.

  United States Court of Appeals
      for the Federal Circuit
              __________________________

                  LENS.COM, INC.,
                     Appellant,

                           v.
               1-800 CONTACTS, INC.,
                      Appellee.
              __________________________

                      2011-1258
              __________________________

    Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board in Cancellation
No. 92,049,925.
              __________________________

                 Decided: August 3, 2012
              __________________________

   ANTHONY J. DE GIDIO, Attorney at Law, of Maumee,
Ohio, argued for appellant.

    MARK A. MILLER, Holland & Hart, LLP, of Salt Lake
City, Utah, argued for appellee.
               __________________________
2                              LENS.COM v. 1-800 CONTACTS



     Before NEWMAN, LINN, and MOORE, Circuit Judges.
LINN, Circuit Judge.

    Lens.com, Inc. (“Lens.com”) appeals a decision of the
Trademark Trial and Appeal Board (“Board”) granting
1-800 Contacts, Inc.’s (“1-800 Contacts”) motion for sum-
mary judgment and ordering the cancellation of
Lens.com’s registration for the mark LENS. Because the
Board applied the correct test for determining “use in
commerce” of a mark for software, and because there is no
genuine issue of material fact that Lens.com did not use
the mark LENS in commerce in connection with software,
this court affirms.

                       I. BACKGROUND

    On July 21, 1998, the United States Patent and
Trademark Office (“PTO”) issued Registration No.
2,175,334 (“’334 Registration”) to Wesley-Jessen Corpora-
tion (“Wesley-Jessen”) for the mark LENS in connection
with “computer software featuring programs used for
electronic ordering of contact lenses in the field of oph-
thalmology, optometry and opticianry”—goods under class
9 (IC 009). ’334 Registration (emphasis added). In Janu-
ary 2001, Lens.com, an online retailer of contact lenses
and related products, applied for the mark LENS in
connection with “retail store services featuring contact
eyewear products rendered via a global computer net-
work.” Office Action of Sept. 18, 2001 at 2, Application
No. 78/076812 (“’812 Application”) (emphasis added). The
PTO cited Wesley-Jessen’s ’334 Registration as a bar to
allowance based on likelihood of consumer confusion. Id.
at 1-2. The examining attorney also refused registration
of Lens.com’s mark as merely descriptive of the identified
services. Id. at 2-3.
LENS.COM   v. 1-800 CONTACTS                              3
    On March 18, 2002, Lens.com initiated a cancellation
proceeding against Wesley-Jessen’s ’334 Registration. On
September 12, 2002, Wesley-Jessen assigned its ’334
Registration to Lens.com, and Lens.com withdrew its
cancellation petition pursuant to the terms of a settle-
ment agreement. Lens.com thus obtained the ’334 Regis-
tration for the mark LENS in connection with “computer
software featuring programs used for electronic ordering
of contact lenses in the field of ophthalmology, optometry
and opticianry.”

     In September 2008, 1-800 Contacts filed Cancellation
No. 92,049,925 alleging that Lens.com fraudulently
obtained or alternatively abandoned the mark LENS
under the ’334 Registration because Lens.com never sold
or otherwise engaged in the trade of computer software.
1-800 Contacts filed a motion for summary judgment on
the claim of abandonment, which the Board granted on
the ground that Lens.com’s “software is 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.’” 1-800 Contacts, Inc. v. Lens.com,
Cancellation No. 92,049,925, slip op. at 8, 10 (T.T.A.B.
May 18, 2010). The Board denied Lens.com’s motion for
reconsideration. 1-800 Contacts, Inc. v. Lens.com, Cancel-
lation No. 92,049,925, slip op. at 6 (T.T.A.B. Dec. 8, 2010)
(“Board Decision”). On January 26, 2011, the PTO issued
an order cancelling the ’334 Registration. Lens.com
appealed, and this Court has jurisdiction pursuant to 15
U.S.C. § 1071(a) and 28 U.S.C. § 1295(a)(4)(B).

                      II. DISCUSSION

                    A. Standard of Review

   “Summary judgment is appropriate where the movant
has established that there is no genuine issue as to any
material fact and that the movant is entitled to judgment
4                               LENS.COM v. 1-800 CONTACTS

as a matter of law. We review the Board’s decision to
grant summary judgment de novo.” Odom’s Tenn. Pride
Sausage, Inc. v. FF Acquisition, L.L.C., 600 F.3d 1343,
1345 (Fed. Cir. 2010) (internal citation omitted).

         B. “Use” of a Mark Under 15 U.S.C. § 1127

                i. The Parties’ Arguments

     Lens.com argues that the Board erred in granting
summary judgment because “use in Commerce” does not
require the actual sale of the goods. Appellant’s Br. 9
(citing White v. Paramount Pictures Corp., 108 F.3d 1392,
1997 WL 76957, at *3 (Fed. Cir. 1997) (appearing in the
Federal Reporter’s “Table of Decisions Without Reported
Opinions”) (“[U]se in commerce” means “commercial use
which is typical in a particular industry. Additionally, the
definition should be interpreted with flexibility so as to
encompass genuine, but less traditional, trademark uses.”
(citing S. Rep. No. 100-515, at 44-45 (1988) (emphasis
added))). Lens.com asserts that the “distribution of . . .
Software for end-users over the Internet satisfies the ‘use
in commerce’ jurisdictional predicate” for a mark for
software. Appellant’s Br. 12. According to Lens.com,
there is no public awareness requirement to “use,” but to
the extent public awareness is required, “summary judg-
ment was improper because there was no evidence pre-
sented on the mindset . . . of the internet users when they
visited the Lens.com website.” Appellant’s Reply Br. 9.

    1-800 Contacts counters that Lens.com abandoned the
trademark LENS due to nonuse because it does not offer
software to consumers as a good in trade. Appellee’s Br.
6. 1-800 Contacts argues that “incidental items that an
applicant uses in conducting business . . . as opposed to
items sold or transported in commerce for use by others,
are not ‘goods in trade.’” Appellee’s Br. 6 (citing TMEP
§ 1202.06 and In re Shareholders Data, 495 F.2d 1360,
LENS.COM   v. 1-800 CONTACTS                               5
1361 (CCPA 1974)). According to 1-800 Contacts, “[t]he
fact that [Lens.com] owns a website through which retail
sale services are provided does not mean that it offers
software as a good to the public.” Appellee’s Br. 8. 1-800
Contacts asserts that “[i]f there is any ‘software’ to speak
of, it is only ancillary to [Lens.com]’s online retail ser-
vices”; Lens.com “is no more in the business of software
than it is in the business of manufacturing cardboard
boxes in which the contact lens products purchased
through its retail services are shipped.” Appellee’s Br. 8-
9. 1-800 Contacts also argues that, “even if some applet
or other software component is placed on to [sic] custom-
ers’ computers in order to facilitate their purchase of
contact lenses . . . , these customers are completely un-
aware . . . that they are the recipient of downloaded
‘software’ . . . [, and] could not possibly associate the
LENS mark with a source of software.” Appellee’s Br. 12.
According to 1-800 Contacts, “[w]ithout any public aware-
ness . . . the ‘transport’ or purported downloading of a
software component or applet to consumers’ computers
cannot create rights sufficient to support a federal trade-
mark registration.” Appellee’s Br. 12-13.

                        ii. Analysis

     15 U.S.C. § 1064 provides in pertinent part that “[a]
petition to cancel a registration of a mark . . . may . . . be
filed . . . (3) At any time if the registered mark . . . has
been abandoned.” In turn, 15 U.S.C. § 1127 (emphasis
added) provides:

    A mark shall be deemed to be ‘abandoned’ . . . (1)
    When its use has been discontinued with intent
    not to resume such use. . . . Nonuse for 3 consecu-
    tive years shall be prima facie evidence of aban-
    donment. ‘Use’ of a mark means the bona fide use
    of such mark made in the ordinary course of trade,
    and not made merely to reserve a right in a mark.
6                                LENS.COM v. 1-800 CONTACTS

In addition, § 1127 (emphasis added) defines “use in
commerce” as:

    The bona fide use of a mark in the ordinary course
    of trade . . . . [A] mark shall be deemed to be in
    use in commerce –

    (1) on goods when –

    (A) it is placed in any manner on the goods or
    their containers or the displays associated
    therewith or on the tags or labels affixed thereto,
    or if the nature of the goods makes such place-
    ment impracticable, then on documents associated
    with the goods or their sale, and

    (B) the goods are sold or transported in commerce
    ....

    The statute is clear that the actual sale of goods is not
required to satisfy § 1127’s “use in commerce” require-
ment, provided that the goods are “transported” in com-
merce.     § 1127; see also Planetary Motion, Inc. v.
Techsplosion, Inc., 261 F.3d 1188, 1194 (11th Cir. 2001)
(“The term ‘use in commerce’ as used in the Lanham Act
‘denotes Congress’s authority under the Commerce Clause
rather than an intent to limit the [Lanham] Act’s applica-
tion to profit making activity.’” (quoting United We Stand
Am., Inc. v. United We Stand, Am. N.Y., Inc., 128 F.3d 86,
92-93 (2d Cir. 1997)). However, “not every transport of a
good is sufficient to establish ownership rights in a mark.”
Id. at 1196; Gen. Healthcare Ltd. v. Quashat, 364 F.3d
332, 337 (1st Cir. 2004). “In assessing rights stemming
from transportation, courts and commentators have
required an element of public awareness of the use.” Gen.
Healthcare, 364 F.3d at 335.
LENS.COM   v. 1-800 CONTACTS                               7
    It is not contested that Lens.com does not sell soft-
ware.     The focus of the appeal is, thus, whether
Lens.com’s software is a “good” that is “transported in
commerce.” Our predecessor court established that an
article does not qualify as a good in trade when that
article is “simply the conduit through which [the appli-
cant] renders services,” i.e., is “the essence or gist of [the
applicant’s] services.” Shareholders Data, 495 F.2d at
1361; see also In re Compute-Her-Look, Inc., 176 U.S.P.Q.
445, 446-47 (T.T.A.B. 1972); Ex Parte Bank of Am. Nat’l
Trust & Sav. Ass’n, 118 U.S.P.Q. 165, 165 (Comm’r Pats.
1958). It is also well established that when an article
“has no independent value apart from the services,” such
article is not likely to be an independent good in trade.
Shareholders Data, 495 F.2d at 1360.

    In Shareholders Data, the applicant applied to regis-
ter the trademark “PERSONALYST” in connection with
“periodic, computer-prepared reports on the valuations of
subscribers’ securities portfolios.” 495 F.2d at 1360. The
applicant already possessed a registration for the service
mark “PERSONALYST” in connection with its financial
reporting services. Id. Our predecessor court held that
the applicant was not entitled to a trademark because the
reports “[we]re not goods or commodities in trade”:

    [A]ppellant’s reports are a far cry from constitut-
    ing goods in trade but are simply the conduit
    through which it renders services limited to indi-
    vidual subscribers. The reports are the essence or
    gist of appellant’s services as they are unique to
    each subscriber.

Id. at 1361 (emphases added). The court also based the
holding on the fact that the reports were “not sold sepa-
rately and ha[d] no independent value apart from the
services.” Id. at 1360.
8                                LENS.COM v. 1-800 CONTACTS

    In Compute-Her-Look, the Board considered whether
an applicant was entitled to a registration for the trade-
mark “COMPUTE-HER-LOOK” for use on computer
printouts reflecting beauty advice tailored to particular
customers. 176 U.S.P.Q. at 445. The applicant already
owned a registration for “COMPUTE-HER-LOOK” as a
service mark. Id. The Board held that the applicant was
not entitled to register the trademark because “these
reports and similar material are merely the means by
which applicant transmits the results of its . . . service,
and they are so intricably tied to and associated with this
service that they have no viable existence or marketable
value separate and apart there from.” Id. at 446-47 (em-
phases added).

    In Bank of America National Trust and Savings, the
Board considered whether the applicant was entitled to a
registration for a trademark (a Bank of America emblem)
for use on travelers’ checks and other correspondence
forms. 118 U.S.P.Q. at 165. The Commissioner of Pat-
ents affirmed the Board’s refusal of registration because:

      The forms which applicant has listed in its
      application are necessary adjuncts to the ren-
      dering of its . . . services; and use of the mark
      on such forms identifies and distinguishes
      applicant’s . . . services. Since applicant’s
      business is a banking service in which it uses
      the printed forms as necessary “tools” in the
      performance of such service, and it is not en-
      gaged either in printing or selling forms as
      commodities in trade, the examiner properly
      refused registration of the mark for the
      commodities . . . .

Id. (first emphasis in original; other emphases added).
LENS.COM   v. 1-800 CONTACTS                             9
     While there is ample case law discussing goods in
trade in the context of traditional articles used or ren-
dered in conjunction with services, see TMEP § 1202.06
(compiling cases), there is little precedent on whether, in
the context of Internet services, an Internet service pro-
viders’ software is an independent good in commerce, or is
merely incidental to the Internet services. In Planetary
Motion, the Eleventh Circuit held that “[t]he distribution
of . . . Software for end-users over the Internet satisfies
the ‘use in commerce’ jurisdictional predicate.” 261 F.3d
at 1194-95. In that case, the court held that the “Coolmail
Software” at issue was sufficiently transported in com-
merce where “[t]he Software was posted under a filename
bearing the ‘Coolmail’ mark on a site accessible to anyone
who had access to the Internet” and “there [wa]s evidence
that members of the targeted public actually associated
the mark Cooolmail with the Software to which it was
affixed.” Id. at 1196 (emphasis added).

    While we agree with the Eleventh Circuit that the
distribution of Software over the internet can satisfy the
jurisdictional predicate for “use in commerce”—such as in
Planetary      Motion    where      consumers    consciously
downloaded the Coolmail software—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. Relevant factors to
consider include 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 inde-
pendent value apart from the services. See Shareholders
Data, 495 F.2d at 1360-61; In re MGA Entm’t Inc., 84
U.S.P.Q.2d 1743, 1746-47 (T.T.A.B. 2007) (boxes used to
store puzzle pieces did not constitute goods in trade
because “consumers [we]re likely to regard the puzzle
boxes as nothing more than point of sale containers, as
10                              LENS.COM v. 1-800 CONTACTS

opposed to separate goods in trade”); Compute-Her-Look,
176 U.S.P.Q. at 446-47; Bank of America, 118 U.S.P.Q. at
165. None of these factors need necessarily be dispositive,
but each may shed light on whether an applicant’s soft-
ware is an independent good being “sold or transported in
commerce.”

                     iii. Application

      Here, Lens.com’s software is merely the conduit
through which it renders its online retail services.
Lens.com’s customers utilize the website (and thereby the
software associated therewith) to avail themselves of
Lens.com’s services. Lens.com’s software is inextricably
intertwined with the service that Lens.com provides to its
customers—the software facilitates the customers’ online
order, which is unique to each customer depending on the
links he or she clicks on, the screens viewed, and the
ultimate decision of whether or not to order contacts.
While Lens.com’s 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 in rendering the service.
See Shareholders Data, 495 F.2d at 1361; In re MGA
Entm’t Inc., 84 U.S.P.Q.2d at 1746-47; Compute-Her-Look,
176 U.S.P.Q. at 446-47; Bank of America, 118 U.S.P.Q. at
165.

    This case is distinguishable from Planetary Motion,
upon which Lens.com primarily relies. In that case, the
Coolmail Software was the primary product in commerce:
“[T]he distribution [of the software] was widespread”;
there was ample evidence that the targeted users associ-
ated the mark with the software (one company even re-
quested permission to license the software under the
Coolmail mark); the software was accompanied by a “user
manual . . . indicat[ing] that the Software was named
‘Coolmail’”; and Coolmail software was “incorporated into
LENS.COM   v. 1-800 CONTACTS                            11
several versions of a product that was in fact sold world-
wide.” 364 F.3d at 1196-97 (emphases added). In con-
trast, here, the record reflects that the LENS mark is
used only in connection with the sale and transportation
of contact lenses via the Internet. Although the ordering
service is facilitated through software, the record does not
indicate that consumers have any reason to be aware of
any connection between the LENS mark and Lens.com’s
software.      Lens.com’s website clearly states that
“Lens.com is a contact lens replacement company, and a
direct to consumer marketer of contact lenses.” J.A. 1167-
91 (website printouts) (emphasis added). The Lens.com
homepage clearly denotes its “Services” to be, inter alia,
“Reorders”; and its “Goods” to be the various brands of
contact lenses. Id. Nowhere on the website is there any
indication that the LENS mark is being used in associa-
tion with software. Nor do the consumer testimonials in
the record help Lens.com. While the testimonials evi-
dence that Lens.com’s customers are generally very
pleased with Lens.com’s ordering service, there is no
evidence of any consumer awareness that the LENS mark
is being used in connection with software. See J.A. 1192-
95 (customer testimonials). Even viewing the evidence in
a light most favorable to Lens.com, there is no genuine
issue of material fact in this case that Lens.com’s custom-
ers actually associated the mark LENS with software.

    Lens.com curiously also relies on this court’s non-
precedential opinion in White—a case where the Board
refused registration. In White, this court affirmed a
decision of the Board refusing to register the mark “THE
ROMULANS” to the applicant (the principal member of a
rock-and-roll band called “The Romulans”) for promo-
tional connect-the-dots games. 1997 WL 76957, at *1.
Although the court stated in White that “the definition [of
‘use in commerce’] should be interpreted with flexibility so
as to encompass genuine, but less traditional, trademark
uses,” id. (citing Sen. Rep. No. 100-515, at 44-45 (1988)),
12                                  LENS.COM v. 1-800 CONTACTS

this language does not imply, as Lens.com suggests, that
trademark protection may extend to goods that are
merely incidental to goods or services in commerce. The
court held in White that the “sporadic, casual and nomi-
nal” use of the games under the facts of that case did not
amount to use in the ordinary course of trade. Id. at *3.

    For the foregoing reasons, this court concludes that
the Board properly determined that the mark LENS is
not in “use in commerce” in association with software.
The Board’s decision on the issue of abandonment is,
thus, affirmed.

                 C. Grounds for Cancellation

     Lens.com also argues that this court must overturn
the Board’s determination on abandonment because the
board erroneously relied solely on Lens.com’s specimens of
use as the ground for cancellation. Appellant’s Br. 15
(citing ER Marks, Inc. v. Quarles Petroleum, Inc., 2007
WL 1620777 (T.T.A.B. May 30, 2007) (nonprecedential)
(“[P]etitioner is essentially arguing that the specimens of
use are unacceptable. However, the question of whether
the signage would constitute an acceptable specimen of
use, is solely an ex parte examination issue and does not
constitute a valid ground for cancellation.”)). Lens.com’s
argument lacks merit because the Board did not rely
solely on the specimens of use, as Lens.com alleges, Board
Decision at 9 (“[T]he specimens are just one piece of the
puzzle”), but rather properly relied on the entire applica-
tion file as directed by the Board’s regulations:

     (b) Application files. (1) The file . . . of each regis-
     tration against which a petition or counterclaim
     for cancellation is filed forms part of the record of
     the proceeding without any action by the parties
     and reference may be made to the file for any rele-
     vant purpose.
LENS.COM   v. 1-800 CONTACTS                              13
37 C.F.R. § 2.122(b)(1) (emphasis added). In Cold War
Museum, Inc. v. Cold War Air Museum, Inc., 586 F.3d
1352 (Fed. Cir. 2010), this court held: “The unambiguous
language of 37 C.F.R. § 2.122(b) provides that the entire
file of the registration at issue is automatically part of the
record [in a cancellation proceeding], without any action
necessary by the parties . . . and the Board was required
to consider this evidence in determining whether [the
party seeking cancellation] had met its burden . . . .” Id.
at 1357 (emphasis added). Because the Board properly
considered Lens.com’s entire application file and did not
rely solely on the specimens of use contained therein,
Board Decision at 9, we decline to disrupt the Board’s
determination on this ground.

                      III. CONCLUSION

    For these reasons, this court affirms the Board’s deci-
sion granting summary judgment in favor of 1-800 Con-
tacts.

                        AFFIRMED