Introduction

In the landmark case Erik M. Underwood v. Bank of America Corporation (996 F.3d 1038), adjudicated by the United States Court of Appeals for the Tenth Circuit on April 30, 2021, key issues surrounding trademark protection, particularly regarding service marks, were thoroughly examined. The plaintiffs, Erik M. Underwood and My24HourNews.com, Inc., challenged the defendant, Bank of America Corporation (BofA), alleging infringement of their service marks "E.R.I.C.A." and "my24erica.com." This commentary delves into the intricacies of the judgment, highlighting the emergence of new legal principles and their implications for trademark law.

Summary of the Judgment

Underwood sought to protect his service marks against BofA's use of a similar mark, "ERICA," for its mobile banking application. The district court granted summary judgments favoring BofA on both the cancellation of Underwood's Georgia-registered "E.R.I.C.A." mark and on the infringement claims. On appeal, the Tenth Circuit affirmed the cancellation but vacated and remanded parts of the infringement claims concerning the "E.R.I.C.A." mark while upholding the dismissal of claims related to "my24erica.com."

Analysis

Precedents Cited

The court referenced several key precedents to navigate the complexities of trademark and service mark law:

• B&B Hardware, Inc. v. Hargis Indus., Inc.: Established that distinctive marks are essential in differentiating goods or services in the market.
• Matal v. Tam: Affirmed the Lanham Act as the foundation of federal trademark law, emphasizing the importance of common law principles.
• CHANCE v. PAC-TEL TELETRAC INC.: Clarified that service marks and trademarks are governed by similar standards, reinforcing the interchangeable use of the term "trademark."
• Inwood Lab'ys, Inc. v. Ives Lab'ys, Inc.: Highlighted that federal trademark protections do not preempt state protections, maintaining parallelism between federal and state laws.
• Federal Circuit Cases: Cases like Hualapai Tribe and Kelly Servs., Inc. v. Creative Harbor, LLC were pivotal in delineating the boundaries of reformation versus cancellation of trademark registrations.

These precedents collectively influenced the court's approach to evaluating both the protectable interest in service marks and the validity of trademark registrations under state law.

Legal Reasoning

The court's legal reasoning can be dissected into several key components:

• Jurisdiction: The court affirmed its jurisdiction over the final summary judgment decisions, dismissing BofA's argument against appellate jurisdiction. It clarified that even with unadjudicated counterclaims, the final decision on the main infringement claims constituted a final and appealable order.
• Cancellation Counterclaim: The court upheld the district court's decision to cancel Underwood's Georgia-registered "E.R.I.C.A." mark. It emphasized that Georgia law mandates actual use of the mark prior to registration, contrasting with federal law's allowance for intent-to-use applications. Underwood admitted to not using the mark as registered, thereby meeting the grounds for cancellation under Georgia statutes.
• Infringement Claims: The court vacated the summary judgment on the "E.R.I.C.A." mark infringement claims, finding that the district court applied an incorrect standard for establishing actual use. It remanded this part for reconsideration under the correct legal framework. However, it affirmed the dismissal of claims related to the "my24erica.com" mark, concluding that the domain name did not function as a protectable service mark.

Impact

This judgment has significant implications for trademark law, particularly in the realm of service marks and domain name protections:

• Clarification of Actual Use Standards: The court's emphasis on correctly interpreting actual use under Section 43(a) reinforces the necessity for plaintiffs to demonstrate genuine commercial use beyond mere intent to use.
• State vs. Federal Trademark Protections: By upholding the cancellation of the Georgia-registered mark, the court underscores the importance of complying with state-specific trademark registration requirements, even when federal protections exist.
• Domain Names as Service Marks: The affirmation that mere registration or possession of a domain name does not automatically entitle it to service mark protection adds a layer of scrutiny for future cases involving domain names.
• Remand for Correct Legal Application: The decision to remand the "E.R.I.C.A." mark infringement claims for proper application of the actual use standard sets a precedent for appellate courts to ensure that lower courts apply the correct legal standards before making summary judgments.

Complex Concepts Simplified

Service Marks vs. Trademarks

Service Marks are identifiers used to distinguish services offered by one entity from those of others, whereas Trademarks are used for goods. Despite this differentiation, both are subject to similar protective standards under U.S. law.

Protectable Interest Under Section 43(a) of the Lanham Act

To establish a protectable interest in a mark under Section 43(a), a plaintiff must demonstrate:

• Actual use in commerce or use analogous to trademark use, meaning the mark is actively used to identify and distinguish services.
• The mark must be distinctive and not merely an intent to use.
• There must be a likelihood of confusion due to the defendant's use of a similar mark.

Summary Judgment

Summary judgment is a legal procedure where the court decides a case without a full trial when there are no genuine disputes regarding any material facts, thereby allowing the court to rule based on the law alone.

Analogue Use

Analogous use refers to the use of a mark in a manner that is promotional or non-transactional but still substantial enough to create public association with the services offered. It requires more than minimal or limited promotional activities; there must be evidence of significant public recognition.

Conclusion

The Underwood v. Bank of America Corporation case serves as a critical guidepost in understanding the thresholds for establishing protectable interests in service marks, especially under differing state and federal statutes. By affirming the cancellation of the improperly registered Georgian "E.R.I.C.A." mark and clarifying the limitations of domain names as service marks, the Tenth Circuit has delineated clearer boundaries for trademark protections. This judgment emphasizes the necessity for precise and bona fide use of marks, urging entrepreneurs and businesses to meticulously manage their trademark registrations and usages to safeguard their intellectual property effectively.

Moving forward, legal practitioners and entities engaged in branding and trademark registrations must heed the standards set forth in this case, ensuring that their marks are not only distinctive but also actively used in a meaningful commercial capacity to sustain legal protections and avert potential infringements.