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Ninth Circuit Follows TTAB Policy: Questions Remain As to What Kinds of Unlawful Acts Bar Trademark Rights

By Jane Shay Wald

The Ninth Circuit, in a case of first impression in that circuit, recently adopted the long-standing policy of the U.S. Patent and Trademark Office's ('PTO') Trademark Trial and Appeal Board ('TTAB') that 'use in commerce only creates trademark rights when the use is lawful.' CreAgri Inc v USANA Health Sciences Inc., 474 F.3d 626 (9th Cir. 2007). The Ninth Circuit in CreAgri noted that 'at least one [other] circuit has adopted and applied this rule. See United Phosphorous, Ltd. v. Midland Fumigant, Inc., 205 F.3d 1219, 1225 (10th Cir. 2000).'

Sounds logical and fair, doesn't it? Why reward someone in a priority fight over a brand when the first one to use the brand got to the consumer so quickly by side-stepping that time-consuming process of legal compliance inherent in making the product or offering the service. To rule otherwise would be like giving the trophy to the New York marathoner who took the subway to get to the head of the pack. So, why is this case so controversial?

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