UNITED STATES: Federal Circuit Holds That Services Can Be Provided via Cloud Computing Software

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"With modern technology, the line between services and products sometimes blurs." This blurring of the line led to the Federal Circuit's recent decision vacating and remanding the cancellation of two service marks by the U.S. Trademark Trial and Appeal Board (TTAB).

In re JobDiva, Inc., 843 F.3d 936 (Fed. Cir. 2016). The marks at issue were JOBDIVA, for "personnel placement and recruitment" services (U.S. Reg. No. 2851917), and , to the extent that the mark covers "personnel placement and recruitment services" (U.S. Reg. No. 3013235), both owned by JobDiva, Inc. The case arose out of a cancellation proceeding initially brought by JobDiva against the registrant of the mark JOBVITE. That registrant counterclaimed and petitioned the TTAB to cancel JobDiva's registrations on the ground that JobDiva did not perform personnel placement and recruitment services under its mark. The TTAB granted that petition and canceled JobDiva's registrations, finding that that JobDiva's use of its marks on software did not constitute use in connection with personnel placement and recruitment services. (The TTAB did not cancel that portion of '235 registration that covered "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.")

At issue was JobDiva's use of its JOBDIVA marks on "software-as-a-service" or "cloud computing" software products that perform multiple functions to facilitate the job-filling process, including by automating some aspects of the process of matching hiring managers and/or recruiters with jobseekers looking for new positions. The TTAB considered whether JobDiva actually offered "personnel placement and recruitment services" outside of its software product. In other words, in order to maintain its registrations, the TTAB required JobDiva to provide that "it is rendering 'personnel placement and recruitment' as an independent activity distinct from providing its software to others" (emphasis added in Federal Court decision). The TTAB found that, because JobDiva did not use its JOBDIVA marks in connection with "personnel placement and recruitment" services other than through its software, the marks could not serve as service marks and were therefore canceled.

On review, the Federal Circuit held that the TTAB considered the wrong question. Instead, the TTAB should have asked the following:

whether JobDiva, through its software, performed personnel placement and recruitment services and whether consumers would associate JobDiva's registered marks with personnel placement and recruitment services, regardless of whether the steps of the service were performed by software.

The Federal Circuit initially agreed with the TTAB on two points: (1) that in this day and age, the line between services and products "sometimes blurs"; and (2) accordingly, "[i]t is important to review all the information in the record to understand both how the mark is used and how it will be perceived by potential customers." However, the court noted that rather than asking both parts of the question, the TTAB only considered the former, namely, how the mark is used (and specifically whether JobDiva was using its mark in connection with "personnel placement and recruitment services" outside of its software).

The Federal Circuit disagreed with the TTAB's approach, recognizing that even if a service is performed only through a company's software, the company may nevertheless be rendering a service for purposes of supporting a statement of use. Thus, the question the TTAB should have asked, in addition to how the mark is used, is "whether a user would associate the mark with 'personnel placement and recruitment' services performed by JobDiva, even if JobDiva's software performs each of the steps of the service." Given the factual nature of the question, the court vacated and remanded the TTAB decision for further consideration of that issue.