Aycock Engineering, Inc. v. Airflite, Inc.

560 F.3d 1350, 90 U.S.P.Q. 2d (BNA) 1301, 2009 U.S. App. LEXIS 6590, 2009 WL 805304
CourtCourt of Appeals for the Federal Circuit
DecidedMarch 30, 2009
Docket2008-1154
StatusPublished
Cited by34 cases

This text of 560 F.3d 1350 (Aycock Engineering, Inc. v. Airflite, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aycock Engineering, Inc. v. Airflite, Inc., 560 F.3d 1350, 90 U.S.P.Q. 2d (BNA) 1301, 2009 U.S. App. LEXIS 6590, 2009 WL 805304 (Fed. Cir. 2009).

Opinions

[1353]*1353Opinion for the court filed by District Judge O’GRADY. Dissenting opinion filed by Citcuit Judge NEWMAN.

O’GRADY, District Judge.

In 1970, Respondent-Appellant Aycock Engineering, Inc. (“Aycock Engineering”) applied for a service mark, which was registered at the United States Patent and Trademark Office (“USPTO”) in 1974 after examination. In 2007, however, the USP-TO Trademark Trial and Appeal Board (“TTAB”) declared the registration void because it failed to meet the “use in commerce” element of the Lanham Act. Ay-cock Engineering now appeals the TTAB’s ruling. The question presented herein is whether the use in commerce requirement is met when an applicant uses a service mark in the preparatory stages of a service’s development, but never offers the service to the public. We hold that it is not.

I. BACKGROUND1

In the late 1940s, William Aycock conceived of and began work on a service involving chartering flights in the air taxi industry. At that time, the common practice for air taxi companies was to lease entire airplanes, not individual seats. Consequently, individual passengers not belonging to a larger party faced more difficulty and expense in chartering a flight. Mr. Aycock intended, through his service, to allow solo passengers to arrange flights on chartered aircraft for less cost.

Mr. Aycock did not plan on operating the chartered air taxi services himself. Instead, his goal was to develop a system where he would serve his customers by acting as the middleman, or “communication link,” between the customer and one of the air taxi service operators he contracted with to provide flights on an individual seat basis. Mr. Aycock planned to advertise his service, which he called the AIRFLITE service, to the public and to have those interested in using the service call a toll-free phone number to schedule reservations. After learning of customers’ travel plans, Mr. Aycock would then arrange for the air taxi service to fly his customers with similar travel plans to their destinations. Mr. Aycock believed that in order for his service to become operational, he needed at least 300 air taxi operators in the United States to agree to participate in his air-taxi-operator network.2

In the years after conceiving of the idea for his service, Mr. Aycock worked toward offering the service to the public. In the mid-1960s, he formed Aycock Engineering — the corporate entity under which his service would operate. He also sought and obtained two toll-free telephone numbers that the public could use to make reservations. In March of 1970, Mr. Ay-cock invited virtually all air taxi operators certified by the Federal Aviation Administration (“FAA”) to join his operation by, inter alia, distributing flyers with in-depth information about his AIRFLITE service. He eventually entered into contracts with some of those air taxi service operators.3 Under these contracts, air taxi operators agreed to participate in the AIRFLITE service and even paid modest initiation fees to Mr. Aycock. Furthermore, Mr. Aycock filed a service mark application on August 10, 1970 for the term AIRFLITE, which was a term he had included in his advertisements.

[1354]*1354Despite his efforts, Mr. Aycock’s operation never got off the ground. While he estimated that he needed at least 300 air service operators under contract to make his service operational, Mr. Aycock never had more than twelve (4% of his minimum goal) under contract at any time throughout his company’s history. And while Mr. Aycock advertised to air taxi operators, he never marketed the AIRFLITE service to the general public. More specifically, the record does not suggest that Mr. Aycock ever gave the public an opportunity to use the toll-free phone numbers to book reservations, or that he ever spoke with a member of the general public about making a reservation. Finally, and most notably, Mr. Aycock never arranged for a single passenger to fly on a chartered flight.4

Mr. Aycock’s AIRFLITE mark, which he applied for on August 10, 1970, was registered by the USPTO on April 30, 1974 on the Supplemental Register after a prosecution that involved considerable negotiation between Mr. Aycock and the trademark examining attorney. During the prosecution process, Mr. Aycock made several representations about his service. Mr. Aycock stated that “[t]his service is a communication service between persons desiring to charter aircraft and certified air taxi operators.” J.A. 736. Mr. Aycock also represented that his “primary service is putting individuals desiring air transportation in contact with people rendering this service,” and that he “does not himself transport but only places the parties in contact with each other.” Id. at 749. The recitation of services for the AIRFLITE service mark eventually agreed upon by the USPTO and Mr. Aycock was “[a]r-ranging for individual reservations for flights on airplanes.” Id. at 729. Mr. Aycock’s application to renew his AIR-FLITE service mark was granted by the USPTO on April 27,1994.

In 2001, Airflite, Inc., the Petitioner-Appellee, filed a petition for cancellation alleging, inter alia, that Aycock Engineering did not use its AIRFLITE mark prior to registration in connection with the services identified in its registration. In that proceeding, the TTAB agreed with Airflite, Inc. and cancelled the AIRFLITE registration, finding that Mr. Aycock failed to render the service described in its registration in commerce. Airflite, Inc. v. Aycock Eng’g, Inc., Cancellation 92032520, 2007 WL 2972237, at *7 (TTAB Oct. 4, 2007) (“TTAB Decision ”).5

II. DISCUSSION

A. Jurisdiction

Aycock Engineering timely filed its appeal under 15 U.S.C. § 1071 (2006), which permits both an applicant for registration of a mark and a party to a cancellation proceeding to appeal decisions of the TTAB to this Court. Jurisdiction arises under 28 U.S.C. § 1295(a)(4)(B) (2006), [1355]*1355which authorizes the Court to hear appeals of TTAB decisions filed under 15 U.S.C. § 1071.

B. Standard of Review

We review the TTAB’s legal conclusions de novo. In re Pacer Tech., 338 F.3d 1348, 1349 (Fed.Cir.2003) (citing In re Int’l Flavors & Fragrances Inc., 183 F.3d 1361, 1365 (Fed.Cir.1999)). The TTAB’s factual findings are reviewed for substantial evidence. Id. (citing On-Line Careline, Inc. v. Am. Online, Inc., 229 F.3d 1080, 1085 (Fed.Cir.2000)). “Substantial evidence is ‘more than a mere scintilla’ and ‘such relevant evidence as a reasonable mind would accept as adequate’ to support a conclusion.” Id. (citing Consol. Edison v. NLRB,

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