LENS Website Software Is Only A Channel Of Trade For Online Retail Services Associated With Selling Contact Lenses
Lens.com appealed to the Federal Circuit Court as Trademark Trial and Appeal Board (“TTAB”) oreder, which granted 1-800 Contacts, Inc.’s motion for summary judgment and ordered the cancellation of Lens.com. Inc.’s registration for the mark LENS. The order found that Lens.com did not satisfy the “use in commerce” requirement for the mark LENS in connection with retail store sales. The U.S. Court of Appeals for the Federal Circuit affirmed. Lens.com, Inc. v. 1-800 Contacts, Inc., 686 F. 3d 1376, Case No. 2011-1258 (Fed. Cir. 2012) (available here).
In 1998, a third party registered the trademark LENS in connection with computer software to order contact lenses. In 2001, Lens.com applied for the mark LENS in connection with retail store services. However, Lens.com application was barred by the 1998 registered mark. In 2002, the third party assigned the 1998 mark to Lens.com, giving Lens.com the mark LENS for use in “computer software featuring programs used for electronic ordering of contact lenses in the field of ophthalmology, optometry and opticianry”. Lens.com, Slip Op. P. 3.
In 2008, 1-800 Contacts filed a cancellation proceeding against Lens.com, alleging that Lens.com fraudulently obtained or had abandoned LENS under the 1998 registration because Lens.com never sold computer software. The TTAB granted 1-800’s motion for summary judgment on the claim of abandonment, and the Federal Circuit affirmed.
A trademark is considered abandoned when it has not been used within the ordinary course of trade for three consecutive years. The Federal Circuit held that actual sale of goods is not required to satisfy the “use in commerce” requirement, as long as the goods are “transported” in commerce and that the public is aware of such use. Lens.com, Slip Op. P. 6. However, an item is not “a good used in the ordinary course of trade” when the item is a channel to render services to consumers. The Federal Circuit had to determine whether Lens.com’s internet service was an independent good in commerce. This analysis is done on a case-by-case basis. The non-exclusive test for software goods is 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.” Lens.com, Slip Op. P. 10.
The Federal Circuit found that Lens.com’s software was a conduit for its online retail services because its customers use the website (and the software) to access Lens.com’s services. Thus, “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.” Lens.com, Slip Op. P. 10. Also, Lens.com did not sell or license the software to others. For these reasons, the Federal Circuit affirmed the abandonment of the mark.