T.M.E.P. § 901.02
Bona Fide Use in the Ordinary Course of Trade
Executive summary:
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901.02 Bona Fide Use in the Ordinary Course of Trade
The definition of use in commerce ( TMEP §901.01) was amended by the Trademark Law Revision Act of 1988 (TLRA), Public Law 100-667, 102 Stat. 3935, to add the phrase "the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark." The primary purpose of the amendment was to eliminate the practice of "token use," or use made solely to reserve rights in a mark.
Some factors that may be important in determining compliance with the statutory requirement for a "bona fide use of a mark in the ordinary course of trade" are: (1) the amount of use; (2) the nature or quality of the transaction; and (3) what is typical use within a particular industry.
The legislative history of the TLRA makes it clear that the meaning of "use in the ordinary course of trade" will vary from one industry to another. The report of the House Judiciary Committee stated that:
While use made merely to reserve a right in a mark will not meet this standard, the Committee recognizes that "the ordinary course of trade" varies from industry to industry. Thus, for example, it might be in the ordinary course of trade for an industry that sells expensive or seasonal products to make infrequent sales. Similarly, a pharmaceutical company that markets a drug to treat a rare disease will make correspondingly few sales in the ordinary course of its trade; the company's shipment to clinical investigators during the Federal approval process will also be in its ordinary course of trade....
H.R. Rep. No. 1028, 100th Cong. 2d Sess. 15 (1988).
The report of the Senate Judiciary Committee stated:
The committee intends that the revised definition of "use in commerce" be interpreted flexibly so as to encompass various genuine, but less traditional, trademark uses, such as those made in test markets, infrequent sales of large or expensive items, or ongoing shipments of a new drug to clinical investigators by a company awaiting FDA approval....
S. Rep. No. 515, 100th Cong. 2d Sess. 44-45 (1988). See also Paramount Pictures Corp. v. White, 31 USPQ2d 1768, 1774 n. 8 (TTAB 1994), aff'd, 108 F.3d 1392 (Fed. Cir. 1997) (Table).