Friday, January 08, 2016

Single Location Restaurant Not Operating in Interstate Commerce, Says TTAB

The Board sustained this Section 2(d) opposition to registration of the mark FLATIZZA for "pizza," finding that Applicant Janco, LLC had not used the applied-for mark in commerce prior to to the filing of its use-based application to register. Applicant operated a single restaurant in Bothell, Washington, but the Board found insufficient evidence to show that the restaurant operated in interstate commerce. Doctor’s Associates Inc. v. Janco, LLC, Opposition No. 91217243 (January 7, 2016) [not precedential].

The Board observed that there is no particular threshold level of interstate activity required for proof of use by a single-location restaurant, but some use "in commerce" must be shown.

In this case, Applicant has not shown that its services were rendered to any out-of-state customers. Its restaurant was not shown to have been listed in any travel or restaurant guide. No advertising has been submitted. The record does not support a finding that any viewers (from out-of-state or otherwise) accessed Applicant’s website, and the business plan and menu mock-ups were for internal use only. Nor has Applicant shown that its services affected interstate commerce.

Although Bothell, Washington is near Seattle, it is not on an interstate highway: "[W]hile I-5 traverses Seattle, it is speculation to assume that out-of-state travelers would travel 3 miles off the Interstate highway to patronize Applicant’s restaurant, especially given that the route from I-5 to Bothell would require either driving the distance in a reverse direction or taking side roads."

The Board therefore found the application to be void ab initio because the mark was not in use in commerce prior to applicant Section 1(a) filing date.

Read comments and post your comment here.

TTABlog comment: What I find confusing about this decision is that the Board treats the opposed mark as if it were a service mark for restaurant services, rather than a trademark for pizza. Not that the result would be any different.

Text Copyright John L. Welch 2016.


At 8:26 AM, Blogger Brad Salai said...

Katzenbach v. McClung, 379 U.S. 294 appears at least arguably to be to the contrary,
I would appeal this one.

At 10:46 AM, Anonymous Anonymous said...

Interesting comment on Katzenbach. I hadn't thought of that angle before. But I'd note that the "interstate" question isn't whether the restaurant is operating in interstate commerce, but the narrower question of whether the restaurant has used the mark in interstate commerce for restaurant services. Even if it bought supplies from out of state vendors, that would be acting as a consumer, not using the mark in providing restaurant services.

At 11:04 AM, Anonymous Anonymous said...

Agree with Mr. Salai completely. "The only remaining question -- one answered in the affirmative by the court below -- is whether the particular restaurant either serves or offers to serve interstate travelers or serves food a substantial portion of which has moved in interstate commerce." Katzenbach at 304.

If the Commerce Clause can reach home grown marijuana (Gonzales v. Raich, 545 US 1 (2005)), I fail to see how this applicant's use is not interstate commerce. While I think the reach given the Commerce Clause is ridiculous and defies common sense, this is the Supreme Court precedent. Maybe the TTAB is taking a cue from the Federal Circuit and ignoring Supreme Court decisions it doesn't like.

I hesitate to subscribe to conspiracy theories, but this really does look like a case of the TTAB finding a way to rule in favor of the big company, Subway, over the little guy. I hope the little guy has the resources and resolve to appeal.

At 11:22 AM, Blogger John L. Welch said...

Does is make a difference that this is a trademark application for "pizza" not for restaurant services? The restaurant services may be interstate commerce (offered under the mark REDDI SPAGHETTI). But is the pizza, as an item, transported in commerce?

At 11:52 AM, Blogger Brad Salai said...

I agree with John that it should make a difference, but as noted in the original post, the board didn't analyze it that way.
I have advised clients for a very long time that the Court has applied the commerce clause to restaurants, and that restaurant services, even for a single restaurant, fall within "commerce regulated by congress" and service marks for restaurant services can be registered.
This case makes me think I'll need to qualify that at least a bit.
Or maybe not...

At 12:14 PM, Anonymous Anonymous said...

Katzenbach is an intriguing angle, but ultimately fails. Remember, there is a difference between "an effect on" interstate commerce and actual use in interstate commerce. The Katzenbach court noted that discrimination has an effect on interstate commerce by discouraging interstate travel. There was also evidence that Ollie's BBQ purchased ingredients from out-of-state suppliers. Similarly, in Gonzales (mentioned above), home cultivation of marijuana had an effect on the interstate market for marijuana even if it wasn't transported in international commerce. The test in trademark law is not the effect, but use. The TTAB was required to investigate whether the pizza was used in interstate commerce, which is a question of fact.

At 2:08 PM, Blogger Brad Salai said...

So, in an abundance of enthusiasm, I decided to read the case, and it is an odd one. Verily, the application was for Pizza, but the entire analysis was of whether a single restaurant is subject to regulation by congress. I think it clearly is, and that the analysis is wrong, but the opinion is non-precedential, so perhaps it is only interesting because it indicates how this particular panel might get it wrong if presented with the actual question they decided here. On the facts, there is no evidence of interstate sales of pizza, so the result might be ok.
As the Federal Circuit often says, we review judgements, not opinions, so I will have to change my mind and say that I probably would not appeal.

At 2:37 PM, Anonymous Anonymous said...

Same Anonymous here.

As for the goods-services distinction, could the restaurant services be interstate commerce, while the goods being sold in the restaurant are not? Your blog comment makes clear that you think the result is the same whether it's pizza or restaurant services. I agree.

As you noted, the Board's focus on services might be odd when the application is clearly for goods, but I think that just recognizes that there isn't much difference in this analysis between restaurant services and the sale of goods in the restaurant. It looks to me like the Opposer is the one that introduced the concurrent use issue.

The application specimen shows a menu with what appears to be a picture of the pizza in question and use of the mark (a display associated with the goods). The application was filed more than a year after the restaurant opened. I don't think there was much question that this was a bona fide use, the question was whether the goings on in one restaurant are interstate commerce.

Use in commerce is "bona fide use of a mark in the ordinary course of trade" and the commerce is "all commerce which may be regulated by Congress." So if this use was bona fide, the specimen shows a manner of use listed in the statute, and the Commerce Clause can reach intrastate activity of a single restaurant, how does this application fail?

You could argue that the precedent isn't as clear as I think it is on a single restaurant being interstate commerce, but if consumption of wheat you grew on your farm or marijuana you grew at home is interstate commerce, how is selling pizza to others (even if intrastate) not?

At 8:13 AM, Blogger Brad Salai said...

As Columbo used to say, and just one more thing...
To me, the Supreme Court has held that restaurant services affect interstate commerce and can be regulated by Congress. That's all that's required for a service mark for a restaurant to be registrable, all other qualifications being met.
It is possible, in my view, for a single restaurant to sell pizza locally only, and not qualify for a trademark registration for pizza, even though the store that sells it is also a restaurant, and does qualify for a service mark. The court has not held that the sale of pizza affects commerce, so the result isn't necessarily the same.
I don't think the analysis should be the same. If it's a restaurant, that's enough, you don't have to prove use "in commerce" (local use is enough) because the Court says restaurant services can be regulated. For goods, you do, unless the goods can be regulated (nuclear materials? or marijuana or wheat). The board missed the mark here by failing to recognize that restaurant services are special in the regulated by congress sense.

At 1:54 PM, Anonymous Anonymous said...

What about taking orders by phone or using a credit card terminal for a pizza sale/order? or getting any of the pizza ingredients/containers/labels shipped from out of state?

Interstate commerce means any work involving or related to the movement of persons or things (including intangibles, such as information) across state lines or from foreign countries.

Under the FLSA examples of employees who are engaged in interstate commerce include:

• An employee such as an office or clerical worker who uses a telephone, facsimile machine, the U.S. mail, or a computer e-mail system to communicate with persons in another state.

• An employee such as a cashier or waitress who uses an electronic device which authorizes a credit card purchase.

An instrumentality of interstate commerce includes railroads, highways and city streets, pipe lines, telephone and/or electrical transmission lines, airports, bus/truck/steamship terminals, radio or TV stations and river/streams/waterways over which interstate or foreign commerce regularly moves.

I beieive the threshold for interstate commerce is VERY low. I foresee the TTAB is going to get shot down quickly on this one.


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