With the prevalence of smartphones in today’s society, one cannot help but to have at least heard of Google’s Android operating system. This operating system came about with the intent of competing with the superpower known as Apple’s iPhone. Of course, when Google released this platform for the first time in 2007, the Android operating system was perceived to be the first generation. Recently, however, an Illinois man asserted that perhaps Google’s Android was not the first generation. Well, not quite, but he did assert that Google infringed his federally registered trademark, “Android Data.”
During the Dot.com Boom of the late 1990s Erich Specht decided he wanted to get into the lucrative software business. As such, in 1998, he founded a suite of e-commerce software that became known as Android Data Corporation (“ADC”). Through his entity, he intended to license software to his would-be clients, and provided website hosting and computer consulting services. Two years after the company’s inception, Mr. Specht applied to the United States Patent and Trademark Office for federal registration of the “Android Data” mark. The mark was registered in 2002.
Unfortunately for Mr. Specht, by the end of 2002, his company had hit the end of the road. It ceased all major operations, lost the bulk of its clients, and moved its headquarters into Mr. Specht’s home. Mr. Specht then caused ADC to transfer the Android Data mark to his wholly-owned company, The Android’s Dungeon Incorporated (“ADI”). For the remainder of the year, Mr. Specht attempted to sell ADC’s assets, including the mark, but was unable to find a willing buyer. He kept the ADC website running for a short period thereafter, but eventually allowed the registration for the company URL to lapse.
Five years later in 2007, Mr. Specht made a meager attempt to revive the use of the Android Data mark by trying to promote his software suite to catalog companies and sending out mass mailings bearing the mark. These efforts were fruitless. A few months after, Mr. Specht attempted to license his software to a healthcare consulting firm, but that also failed. He did not attempt to use the mark again until April 2009, when he attempted to bring his website back from the dead under a slightly different URL.
During the tumultuous years for Mr. Specht’s company, another start-up company, Android, Inc., began developing what eventually became the Android operating system. In 2005, Google purchased Android, Inc. Two years later, in 2007, Google released a beta version of the Android software to the public. This release preceded Mr. Specht’s attempt to revive his use of the Android Data mark by approximately one month. About a year after the release of the beta version of the Android software, T-Mobile US, Inc., released the first smartphone to run the Android operating system. Since that release in 2008, Google has continued to use the Android mark in commerce. Google even attempted to register the mark with the United States Patent and Trademark Office, but its application was denied when the trademark examiner found there to be a likelihood of confusion with Mr. Specht’s Android Data mark. Nonetheless, Google continued to use the mark in commerce.
Mr. Specht eventually sued Google over its use of the Android mark for trademark infringement under the Lanham Act in the United States District Court for the Northern District of Illinois, Eastern Division. Mr. Specht also named the founders of Android, Inc. and the Open Handset Alliance (an industry consortium created to foster innovation in mobile phone technology) as defendants. However, the district court dismissed all defendants except Google. Google answered the allegations and counterclaimed that Mr. Specht had abandoned the mark and that the mark should be canceled.
Google moved for summary judgment on its counterclaims. The district court found that Mr. Specht had abandoned the mark in 2002 when the business ceased its major operations. The court held that the few isolated uses by Mr. Specht thereafter did not constitute continued use or an intent to resume use. As such, the court found that Mr. Specht had forfeited any right he had to the mark, and his claims failed as a matter of law. The district court also granted Google’s request to cancel Mr. Specht’s mark.
The 7th Circuit heard the matter on appeal and addressed whether the evidence demonstrated that Mr. Specht’s mark had been abandoned in 2002. This analysis was pivotal to the decision below because if the mark had been abandoned in 2002, then Google could not have infringed Mr. Specht’s right in the mark through its use of the Android operating system in 2007. 15 U.S.C. section 1127; Central Manufacturing, Inc. v. Brett, 492 F.3d 876, 881 (7th Cir. 2007).
A trademark is abandoned when its “use in commerce” is discontinued with no intent to resume use. 15 U.S.C. section 1127; Rust Env’t & Infrastructure, Inc. v. Teunissen, 141 F.3d 1210, 1214 (7th Cir. 1997). The Lanham Act provides that “nonuse for three consecutive years shall be prima facie evidence of abandonment.” 15 U.S.C. section 1127. In order to overcome the prima facie presumption, the party must provide evidence that excuses the nonuse or demonstrates an intent to resume use of the mark. Sands, Taylor & Wood Co. v. Quaker Oats, Co., 978 F.2d 947, 955 (7th Cir. 1992).
The 7th Circuit found that Mr. Specht discontinued use of the Android Data mark at the end of 2002 when he shut down ADC and transferred its assets to ADI. Mr. Specht argued that his attempts to sell his business’ assets in 2003 and 2004 constituted an intent to resume use, but the court found that an attempt to sell assets of a business is different from using the goodwill of a mark to sell a business’ goods or services. As such, the court found that the foregoing uses did not constitute use of the mark in commerce.
Mr. Specht also argued that his website bearing the trademark continued to operate until 2005, and such a website constitutes a bona fide use in commerce. Nonetheless, the court pointed out that Mr. Specht did not identify any goods or services that Android Data Corp. could have provided through the website. As such, the website did not constitute a use in commerce either. Finally, Mr. Specht argued that his two sales efforts in 2007 constituted evidence of commercial use, but the court disposed of this argument by citing to case law holding that sporadic attempts to solicit business are not a “use in commerce” meriting the protection of the Lanham Act.
In light of the court’s finding that Mr. Specht had abandoned the Android Data mark by 2007, the mark had thereby returned to the public domain. Thus, Google’s appropriation of the mark beginning in 2007 was proper and the mark has been in continuous use since that time. As such, Google is the “senior user” of the mark and entitled to federal trademark protection under the Lanham Act.
The take away for owners of valuable marks is quite clear—use it or lose it. If you want to keep your established trademark rights, you must continue to use them in commerce, or clearly document your intent to resume their use. As Erich Specht learned the hard way, an attempt to sell your business’ assets, including the registered mark, to third parties is insufficient to maintain protection under the Lanham Act. Thus, it is imperative to your rights as the owner of a federally registered trademark that you continue its use in commerce or have clear evidence to demonstrate your intent to resume.