Trademark Trial and Appeal Board Misses the Mark, Says the Federal Circuit

February 2017

By: Sheri L. Gordon

On December 12, 2016, in In re JobDiva, Inc., No. 2015-1960, the Federal Circuit ruled that the Trademark Trial and Appeal Board (TTAB) applied the wrong legal standard to determine that JobDiva failed to use its registered service marks in connection with the “personnel placement and recruitment services” described in the registrations and thus abandoned them as to those specific services. The registrations in question are numbers 2,851,917 (for “personnel placement and recruitment services”) and 3,013,235 (for “personnel placement and recruitment services; computer services, namely providing databases featuring recruitment and employment, employment advertising, career information and resources, resume creation, resume transmittals and communication of responses thereto via a global computer network”). Slip op. at 2. JobDiva initiated the TTAB cancellation proceeding against a registration owned by Jobvite, Inc. based on alleged likelihood of confusion between Jobvite’s and JobDiva’s service marks. Jobvite counterclaimed for cancellation of the ‘917 mark in its entirety and the ‘235 registration in part, which the TTAB granted.

JobDiva uses the challenged marks in connection with its product and service offerings, described on its web site as “the largest, ultimate, full service solution for the staffing industry with an extensive suite of products & tools, front to back end, covering all staffing needs.” Slip op. at 3. Essentially, JobDiva provides “an applicant tracking system for recruiting departments, [and] for HR departments seeking to staff people.” Id. JobDiva uses software to automatically provide these products and services to others. Through the software, clients have access to a database of employment applications and the ability to obtain targeted information from multiple functions performed by the software to search for and identify qualified candidates to fill job openings. The software also recommends job openings to candidates, provides automated resume feedback to candidates, and offers a platform for recruiters and hiring managers to directly communicate with candidates in a variety of ways. In most circumstances, these offerings are provided by JobDiva on a software-as-a-service basis, via remote access, such that the software does not need to be downloaded onto a client’s computer.

In challenging JobDiva’s marks, Jobvite did not put forth affirmative evidence that JobDiva abandoned the marks and did not challenge JobDiva’s use of the ‘235 registration to identify the other services listed in the registration. Nonetheless, the TTAB found that JobDiva abandoned the ‘917 mark in its entirety and the ‘235 mark in part. The TTAB began its analysis by consulting dictionary definitions to define the scope of “personnel placement and recruitment” services. The TTAB combined definitions of each word to conclude that “personnel placement and recruitment services” meant “finding and placing people in jobs at other companies or providing personnel staffing services for others.” Slip op. at 5. Although JobDiva submitted screenshots of its web site and a declaration from its CEO to prove use of the marks, that evidence was deemed insufficient because it failed to show that JobDiva performed any personnel placement or recruitment services other than supplying its software. The TTAB explained that “[a] term that only identifies a computer program does not become a service mark merely because the program is sold or licensed in commerce….Such a mark does not serve to identify a service unless it is also used to identify and distinguish the service itself, as opposed to the program.” Slip op. at 6 (emphasis in original). The TTAB particularly chastised JobDiva for confusing “the service of providing a software solution for personnel placement and recruitment with actually rendering personnel placement and recruitment services” and discredited JobDiva’s evidence for failing to show that JobDiva offered software for personnel placement and recruitment in addition to providing personnel placement and recruitment services. Slip op. at 6-7.

In its review of the TTAB’s decision, the Federal Circuit agreed with the TTAB that the line between services and products can become blurred with modern technology and that it is important to carefully analyze how the mark is used and how it will be perceived by potential customers in order to determine “whether web-based offerings, like those JobDiva provides, are products or services.” Slip op. at 9.

The Court determined, though, that the TTAB erroneously applied a bright-line rule “requiring JobDiva to show that it performed the ‘personnel placement and recruitment’ services in a way other than having its software perform those services.” Id. By applying the wrong standard, the TTAB showed a fatal misunderstanding of the law. Importantly, as the Court recognized, a company may be providing a service even if that service is performed by a company’s software.

The Court also observed that “[t]o determine whether a mark is used in connection with the services described in the registration, a key consideration is the perception of the user.” Slip op. at 10. Here, the question was whether users would associate the challenged marks with “personnel placement and recruitment services” performed by JobDiva, even if each step of the service is performed by JobDiva’s software. The Court concluded that this is a factual question that must be answered on a case-by-case basis, with “many case-specific factors the Board might examine.” Slip op. at 11.

Factors that the Court believes the TTAB should consider are “the nature of the user’s interaction with JobDiva when using JobDiva’s software, as well as the location of the software host.” Id. The Court reasoned that if JobDiva sells its software to someone who hosts it on their own web site, then third party users would be interacting with the host, not JobDiva, and it is thus unlikely that the user would associate the marks with a service performed by JobDiva. However, if the software is hosted on JobDiva’s web site, such that users perceive a direct interaction with JobDiva during operation of the software, then such users might associate the marks with personnel placement and recruitment services performed by JobDiva. Id.

The Court then vacated the TTAB decision and remanded for further proceedings directed to the question of “whether purchasers would perceive JobDiva’s marks to identify ‘personnel placement and recruitment’ services.” Id.