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Christian Faith Fellowship Church v. Adidas AG

United States Court of Appeals, Federal Circuit

November 14, 2016

CHRISTIAN FAITH FELLOWSHIP CHURCH, Appellant
v.
ADIDAS AG, Appellee

         Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 92053314.

          Richard W. Young, Quarles & Brady, LLP, Chicago, IL, argued for appellant.

          John Zaccaria, Notaro, Michalos & Zaccaria P.C., Orangeburg, NY, argued for appellee. Also represented by Bradley S. Corsello, Angelo Notaro.

          Before Reyna, Hughes, and Stoll, Circuit Judges.

          STOLL, CIRCUIT JUDGE.

         Christian Faith Fellowship Church appeals a final judgment of the Trademark Trial and Appeal Board that, in response to a petition filed by adidas AG, cancelled its trademarks for failing to use the marks in commerce before registering them. The Board held that the Church's documented sale of two marked hats to an out-of-state resident were de minimis and therefore did not constitute use of the marks in commerce under the Lan-ham Act. Because the Lanham Act defines commerce as all activity regulable by Congress, and because the Church's sale to an out-of-state resident fell within Congress's power to regulate under the Commerce Clause, we reverse the Board's cancellation of the Church's marks on this basis and remand for further proceedings.

         Background

         I.

         Christian Faith Fellowship Church is located in Zion, Illinois, within five miles of the Illinois-Wisconsin border. Being located so close to the border, the Church's parishioners include both Illinois and Wisconsin residents. In January 2005, the Church began selling apparel, both caps and shirts, emblazoned with the phrase "ADD A ZERO." The Church sold the "ADD A ZERO"-marked apparel as part of a fundraising campaign to pay off the debt on its church facility and the associated 40-acre tract of land. Illinois-based Icon Industries supplied the Church with the "ADD A ZERO"-marked apparel, which the Church sold in its bookstore.[1]

         The Church sought a federal trademark for the "ADD A ZERO" mark at the U.S. Patent and Trademark Office in March 2005. The Church filed two clothing-based trademark applications, one for use of "ADD A ZERO" in standard characters and another for a stylized design of the phrase. The Church's applications relied on actual use of the marks in commerce, not intent to use the marks in commerce. The Office granted the Church's applications and registered the marks as U.S. Registration Nos. 3, 173, 207 and 3, 173, 208.

         II.

         In 2009, adidas AG ("Adidas") sought a clothing trademark for the phrase "ADIZERO, " but the Office refused the application for likelihood of confusion with the Church's "ADD A ZERO" marks. Adidas brought an action before the Trademark Trial and Appeal Board to cancel the Church's marks, arguing several grounds for cancellation: (1) the Church's failure to use the marks in commerce before registration; (2) the marks' failure to function as trademarks; and (3) the Church's abandonment of the marks for nonuse. The Board agreed with Adidas's failure-to-use argument and cancelled the Church's marks, without addressing Adidas's alternate cancellation grounds. The Board considered the Church's proffered evidence-over Adidas's hearsay and authentication objections-of a cancelled check for the sale of two "ADD A ZERO"-marked hats for $38.34 in February 2005, before the Church applied for its marks. The Church had kept the check in its records and cross-referenced it with a sales register it maintained for its bookstore. The check's drawer was Charlotte Howard, who had a Wisconsin home address pre-printed on her check.

         The Board disagreed with the Church that the sale to Ms. Howard evidenced the requisite "use in commerce" under the Lanham Act. The Board concluded:

[T]he sale of two ADD A ZERO caps at a minimal cost within the state of Illinois to Ms. Howard, who resides outside the state, does not affect commerce that Congress can regulate such that the transaction would constitute use in commerce for purposes of registration.
. . . This sale is de minimis and, under the circumstances shown here, is insufficient to show use that affects interstate commerce.

adidas AG v. Christian Faith Fellowship Church, Cancellation No. 92053314, 2015 WL 5882313, at *7 (T.T.A.B. Sept. 14, 2015) (Board ...


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