Case Information
*1 Before R EYNA , H UGHES , and S TOLL , Circuit Judges. S TOLL , 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 Con- gress’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.
B ACKGROUND 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 parish- ioners 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 applica- tions 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 abandon- ment 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 authenti- cation 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.
(Fed. Cir.), cert. denied , 136 S. Ct. 88 (2015) (“Use in commerce must be ‘as of the application filing date.’” (quoting 37 C.F.R. § 2.34(a)(1)(i))).
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 cir- cumstances shown here, is insufficient to show use that affects interstate commerce.
adidas AG v. Christian Faith Fellowship Church , Cancel- lation No. 92053314, 2015 WL 5882313, at *7 (T.T.A.B. Sept. 14, 2015) ( Board Op. ) (footnote omitted).
The Church appeals, and we have jurisdiction under 28 U.S.C. § 1295(a)(4)(B).
D ISCUSSION The Lanham Act provides that “[t]he owner of a trademark used in commerce may request registration of its trademark.” 15 U.S.C. § 1051(a)(1) (emphasis added). Section 1051(a)’s “use in commerce” requirement distin- guishes it from § 1051(b), which offers protection for “[a] person who has a bona fide intention, under circumstanc- es showing the good faith of such person, to use a trade- mark in commerce.” Id. § 1051(b). The Lanham Act explains the “use in commerce” requirement as it relates to goods:
The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce— (1) on goods when—
(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or la- bels affixed thereto, or if the nature of the goods makes such placement impractica- ble, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce . . . .
Id. § 1127 (emphases added). Further, the Lanham Act defines “commerce” as “all commerce which may lawfully be regulated by Congress.” Id. Thus, to register a mark under § 1051(a), one must sell or transport goods bearing the mark such that the sale or transport would be subject to Congress’s power under the Commerce Clause, which includes its power to regulate interstate commerce. Larry Harmon Pictures Corp. v. Williams Rest. Corp. , 929 F.2d 662, 664 (Fed. Cir. 1991) (citing U.S. Const., art. I, § 8); see also In re Silenus Wines, Inc. , 557 F.2d 806, 808–12 (CCPA 1977).
The dispute between the parties in this case is limited to whether the Church, which filed its applications under § 1051(a)’s “use in commerce” subsection, made a sale of marked goods in commerce regulable by Congress before applying for its marks.
I. As a threshold matter, we address whether the Board erred in admitting Ms. Howard’s check into evidence and in finding that Ms. Howard resided in Wisconsin. Adidas argues that the Board should not have admitted the check because Ms. Howard’s pre-printed address on the check constitutes inadmissible hearsay and because the check was not authenticated. We review the Board’s admission of the check for abuse of discretion. Coach Servs., Inc. v. Triumph Learning LLC , 668 F.3d 1356, 1363 (Fed. Cir. 2012) (citing Crash Dummy Movie, LLC v. Mattel, Inc. , 601 F.3d 1387, 1390 (Fed. Cir. 2010)). “We will reverse only if the Board’s evidentiary ruling was: (1) ‘clearly unreasonable, arbitrary, or fanciful’; (2) ‘based on an erroneous conclusion[] of law’; (3) premised on ‘clearly erroneous findings of fact’; or (4) the record ‘contains no evidence on which the Board could rationally base its decision.’” Id. (quoting Crash Dummy Movie , 601 F.3d at 1390–91).
No party disputes that Ms. Howard’s pre-printed ad- dress on the check is a hearsay statement, which is typi- cally not admissible into evidence. The Federal Rules of Evidence provide, however, an exception to the bar on hearsay evidence for business records of regularly con- ducted conduct kept in the ordinary course. Fed. R. Evid. 803(6). The Board relied on this exception in admit- ting Ms. Howard’s check. A Church pastor, whose duties included Church recordkeeping, testified that the check was maintained in the Church’s records in the normal course of Church bookstore sales, along with the corrobo- rating entry in the bookstore ledger of sales. Adidas argues that the pre-printed address on the check had nothing to do with Church business, and therefore, the check should not have been admissible under the business records exception. We disagree.
The business records exception “does not require that the document actually be prepared by the business entity proffering the document.” Air Land Forwarders, Inc. v. United States , 172 F.3d 1338, 1343 (Fed. Cir. 1999). When a business relies on a document it has not itself prepared, two factors bear on the admissibility of the evidence as a business record: “[1] that the incorporating business rely upon the accuracy of the document incorpo- rated[;] and [2] that there are other circumstances indi- cating the trustworthiness of the document.” Id. We hold that the Board did not abuse its discretion in determining that the Church relied on the check, a bank-issued nego- 7 tiable instrument, as accurate and trustworthy. We also hold that the check is self-authenticating as commercial paper under Federal Rule of Evidence 902(9). See United States v. Pang , 362 F.3d 1187, 1192 (9th Cir. 2004) (“[A] check is a species of commercial paper, and therefore self- authenticating” (citing Fed. R. Evid. 902(9))).
Based on the admitted check and a Church pastor’s
testimony that many Church parishioners reside in
Wisconsin, the Board found that Ms. Howard resided in
Wisconsin. Adidas argues this factual conclusion was
unsupported. We review the Board’s factual determina-
tions under a substantial evidence standard.
In re Chip-
pendales USA, Inc.
,
II.
Having resolved that the Board properly admitted the
Church’s evidence of an intrastate sale to an out-of-state
resident, we now consider whether such a sale is regula-
ble by Congress, satisfying the Lanham Act § 1051(a) “use
in commerce” requirement. We review de novo the
Board’s legal conclusions, including “its interpretations of
the Lanham Act and the legal tests it applies in measur-
ing registrability.”
In re Viterra Inc.
,
A. Congress’s power under the Commerce Clause is broad. Larry Harmon , 929 F.2d at 664 (citing Silenus Wines , 557 F.2d at 809–10). The Supreme Court’s con- temporary Commerce Clause decisions illustrate Con- gress’s legislative abilities under this enumerated power. Beginning in the modern era with Wickard v. Filburn , the Supreme Court has interpreted the Commerce Clause as vesting in Congress the power to regulate activities that have a substantial effect on interstate commerce, explain- ing:
[E]ven if . . . activity be local and though it may not be regarded as commerce, it may still, what- ever its nature, be reached by Congress if it exerts a substantial economic effect on interstate com- merce and this irrespective of whether such effect is what might at some earlier time have been de- fined as “direct” or “indirect.” 317 U.S. 111, 125 (1942). In Wickard , a farmer grew wheat for commercial sale, but also for personal and farm use. Id. at 114. Congress passed a statute imposing quotas on the amount of wheat that farmers could har- vest, with penalties assessed for harvesting wheat in excess of the quota level, even if the wheat was for per- sonal use and not for sale. Id. at 114–15, 119. The farmer challenged the statute’s application to him as exceeding Congress’s Commerce Clause powers, claiming his wheat harvesting was local in nature and had, at most, only an indirect effect on interstate commerce. Id. at 119. The Court disagreed with the farmer’s argu- ments, holding that the activity must be viewed not in isolation, but in the aggregate: “That [the farmer’s] own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the scope of federal regulation where, as here, his contribution, taken together with that of many others similarly situated, is far from trivial.” Id. at 127–28.
The Supreme Court reaffirmed
Wickard
’s “substantial
effects” doctrine in
Gonzales v. Raich
, in which one of the
parties grew marijuana on her property for personal,
medicinal use and did not sell or transport the drug. 545
U.S. 1, 6–8 (2005). She argued that her local and
de
minimis
cultivation and possession of marijuana should
not be subject to federal drug laws passed under the
Commerce Clause.
Id.
at 15. The Supreme Court framed
her argument as a request to “excise individual applica-
tions of a concededly valid statutory scheme.”
Id.
at 23.
But the Supreme Court held the statute’s application to
individuals was a valid exercise of Congress’s powers
under the Commerce Clause, indicating that its “case law
firmly establishes Congress’s power to regulate purely
local activities that are part of an economic ‘class of
activities’ that have a substantial effect on interstate
commerce.”
Id.
at 17 (citing
Perez v. United States
, 402
U.S. 146, 151 (1971);
Wickard,
The Supreme Court most recently addressed the
Commerce Clause’s “substantial effects” doctrine in
Taylor
, which involved a man federally convicted of
robbery under a provision of the Hobbs Act for his partici-
pation in two home invasions involving marijuana deal-
ers
.
136 S. Ct. at 2077–78 (citing 18 U.S.C. § 1951(a)).
The Hobbs Act criminalizes robberies and attempted
robberies that affect any commerce “over which the Unit-
ed States has jurisdiction.”
Id.
at 2077 (quoting 18 U.S.C.
§ 1951(b)(3)). Citing
Raich
, the Court held that Congress
legislated within its Commerce Clause powers when
enacting the provision at issue.
Id.
at 2077–78, 2080. As
applied, the Court reiterated that, under the aggregation
approach to the substantial effects test, “proof that the
defendant’s conduct in and of itself affected or threatened
commerce is not needed.”
Id.
at 2081. Rather, the Court
instructed that “[a]ll that is needed is proof that the
defendant’s conduct fell within a category of conduct that,
in the aggregate, had the requisite effect” on commerce.
Id.
The Court emphasized that, in the case before it, “the
Government need not show that the drugs that a defend-
ant stole or attempted to steal either traveled or were
destined for transport across state lines. . . . And it makes
no difference under our cases that any actual or threat-
ened effect on commerce in a particular case is minimal.”
Id.
(citing
Perez
,
B.
Our past Lanham Act “use in commerce” cases equally
reflect the broad scope of Congress’s Commerce Clause
powers. For example, in
Larry Harmon
, the appellant
argued that the Lanham Act’s “use in commerce” re-
quirement could not “be satisfied by a single-location
restaurant . . . that serves only a minimal number of
interstate travelers.”
C.
Moving to the facts of this case, it is clear in light of
the foregoing precedent that the Church’s sale of two
“ADD A ZERO”-marked hats to an out-of-state resident is
regulable by Congress under the Commerce Clause and,
therefore, constitutes “use in commerce” under the Lan-
ham Act. We reach this conclusion without defining the
outer contours of Congress’s Commerce Clause powers
because the transaction at issue falls comfortably within
the bounds of those powers already sketched for us by the
Supreme Court. The Lanham Act is a comprehensive
scheme for regulating economic activity—namely the
marking of commercial goods—and the “use in commerce”
pre-registration requirement is an “essential part” of the
Act.
Lopez
,
The Board’s rationale that the sale to Ms. Howard
was “
de minimis
” and thus “insufficient to show use that
affects interstate commerce” is squarely at odds with the
Wickard
progeny of Commerce Clause cases.
Board Op.
at *7. In particular, the Board’s reasoning contravenes
Raich
, which expressed that “the
de minimis
character of
individual instances” arising under a valid statute enact-
ed under the Commerce Clause “is of no consequence.”
Adidas would like us to cabin
Raich
and
Taylor
to
their particular facts, namely to cases involving the
market for illegal drugs. But the Supreme Court’s eluci-
dation of the Constitutional reach of the Commerce
Clause in those cases applies to more than just federal
drug regulation.
Raich
and
Taylor
apply, and indeed rest
on, principles derived from
Wickard
, which involved the
national market for wheat, not illegal drugs. And
Taylor
is particularly applicable because, similar to the present
case, it involves the construction of a statutory provision
that defines “commerce” as including “all . . . commerce
over which the United States has jurisdiction,” 18 U.S.C.
§ 1951(b)(3). Moreover, there is nothing in these cases
themselves to limit the Constitutional precepts and legal
tests discussed therein to their facts. The Supreme Court
has advised that, as a court of appeals, we must not
“confus[e] the factual contours of [a Supreme Court deci-
sion] for its unmistakable holding” in an effort to reach a
“novel interpretation” of that decision.
Thurston Motor
Lines, Inc. v. Jordan K. Rand, Ltd.
,
D. Finally, we note that the Board erred by not properly applying our holdings in Larry Harmon and Silenus Wines , which bear on the Lanham Act’s “use in commerce” requirement specifically rather than on the Commerce Clause in the abstract. Had it done so, it would not have concluded that a sale it characterized as de minimis was therefore insufficient to satisfy the “use in commerce” requirement.
In Larry Harmon , we refused to adopt a de minimis test for the “use in commerce” requirement. 929 F.2d at 666. We further held that the Lanham Act by its terms extends to all commerce which Congress may regulate. Id. Although Larry Harmon involved a service mark and the marks here are for goods, the “in commerce” require- ment is the same regardless of the type of mark and thus Larry Harmon applies to this case. True enough, § 1127 provides distinct tests for the type of use that must occur for goods versus services to satisfy the “use in commerce” requirement. For example, the statute requires that marked goods be “sold or transported” in commerce, while service marks must be “used or displayed in the sale or advertising of services and the services [must be] ren- dered” in commerce. But this distinction goes to the meaning of “use” in the “use in commerce” requirement, not to whether a use is “in commerce,” which we analyze under the same rubric regardless of the delineation be- tween goods and services.
Our predecessor court made this very point in
Silenus
Wines
,
The Board also erred to the extent it relied on
In re
Cook, United, Inc.
,
To the extent
Cook
and
Bagel Factory
assert that the
Lanham Act requires commercial activity, whether for
goods or services, beyond that which is sufficient for
Congress to regulate commercial activity under the Com-
merce Clause, they are incorrect. It is beyond dispute
that “the definition of commerce in the Lanham Act
means exactly what the statute says, i.e. ‘all commerce
which may lawfully be regulated by Congress.’”
Larry
Harmon
, 929 F.2d at 666 (quoting 15 U.S.C. § 1127);
see
also Gastown
,
C ONCLUSION For the foregoing reasons, we reverse the Board’s cancellation of the Church’s “ADD A ZERO” marks for not using them in commerce before federally registering them and remand for the Board to address Adidas’s other cancellation grounds.
REVERSED AND REMANDED C OSTS Costs to Appellant.
Notes
[1] The Church also presented evidence to the Board that it began offering the “ADD A ZERO”-marked apparel for sale on its website in 2010. Like the Board, we do not consider this evidence because it concerns activity after the critical trademark registration date of March 2005. See Couture v. Playdom, Inc. , 778 F.3d 1379, 1381