Application accepted: Court says marks can cover certain software

June 26, 2017
Patterson Thuente IP

Does a company that provides software perform a service that supports a service mark? In today’s technology-driven markets, this question is raised with increased frequency. The Federal Circuit Court of Appeals’ recent decision in In re JobDiva, Inc. delivered good news to companies using this business model, although it also cited a caveat.

Likelihood of confusion

JobDiva has a registered service mark for “personnel placement and recruitment services.” The company’s software generally provides a database of employment apps that a hiring manager could use to fill a job opening. To facilitate this job-filling process, the software performs multiple functions. For example, it uses automated “harvesters” to find potential job candidates by searching job boards and aggregating relevant resumés. The company often provides its offerings on a software-as-a-service (SaaS) basis (also known as cloud computing), which allows customers to use the software without downloading it.

JobDiva asked the Trademark Trial and Appeal Board (TTAB) to cancel a mark owned by a competitor, asserting a likelihood of confusion between the two companies’ marks. The competitor responded by asking the board to cancel JobDiva’s mark, alleging that JobDiva didn’t actually perform personnel placement and recruitment services.

Service mark with computer code image Patterson Thuente

No service, no mark

The TTAB found that JobDiva didn’t use its mark in connection with personnel placement and recruitment services. It repeatedly faulted JobDiva for showing only that it offered software for personnel placement and recruitment, instead of providing that software in addition to offering such services. The TTAB specifically required JobDiva to prove that it renders personnel placement and recruitment as an independent activity distinct from providing its software.

Ultimately, the TTAB found that JobDiva used its marks on only software offerings — and that software sales alone couldn’t constitute personnel and recruitment services. It canceled the mark, and JobDiva appealed the decision.

Applying a different test

The appeals court agreed with the TTAB’s observation that, with modern technology, the line between services and goods sometimes becomes blurred. If a customer visits a company’s website and accesses its software to conduct some type of business, the company may be rendering a service, even though the service uses software. Yet a mark used with such a Web-based offering could also identify the provision of software, not a service.

But the court held that the TTAB went wrong when it 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. The court expressly stated that software may be used by companies to provide services.

The court explained that a key consideration when determining whether a mark is used in connection with the services described in its registration is the user’s perception. The proper question here was: Would a user associate the mark with personnel placement and recruitment services performed by JobDiva, even if software performs each of the steps? The court sent the case back to the TTAB to consider that question.

Evaluating software cases

The appeals court’s finding that a company can use software to provide services doesn’t necessarily mean that software will always support a mark. As the court stated, each case will turn largely on the relevant user’s perception of the mark, including factors such as the nature of the user’s interaction with the company when using the software and the location of the software host.

In re JobDiva, Inc., No. 2015-1960, Dec. 12, 2016 (Fed. Cir.)