The Ninth Circuit today determined a trademark priority case based not on the first use in commerce, but on the first “lawful” use in commerce.
Plaintiff/Appellant CreAgri, Inc., began selling the dietary supplement OLIVENOL before defendant/Respondent USANA Health Services, Inc., filed its intent-to-use application to register OLIVOL for nutritional supplements. However, it was undisputed that at all times before USANA’s priority date, the OLIVENOL supplement violated federal labeling laws.
Based on this violation, the Northern District of California granted USANA’s motion for summary judgment dismissing CreAgri’s infringement claim. The Ninth Circuit affirmed. It wrote:
“If ‘use in commerce’ were the only requirement for acquiring trademark rights, then CreAgri would have an easier path to establishing priority of its mark because it began selling Olivenol more than one year before USANA’s intent to use application was filed.
“But the inquiry does not stop with use in commerce. It has long been the policy of the PTO’s Trademark Trial and Appeal Board that use in commerce only creates trademark rights when the use is lawful.”
The Ninth Circuit’s published opinion in CreAgri v. USANA, __ F.3d. __, 2007 WL 92684 (9th Cir.), is available here.