22 April 2026FeaturesTrademarksLauren Leipold & John Heinbockel

Lessons from Nutramax on defining trademark ‘use’

Given the different statutory interpretations of the commercial application of marks under US law, clear contractual safeguards are essential, say Lauren Leipold and John Heinbockel of Seyfarth Shaw.

In the US, trademark rights flow primarily from use in interstate commerce rather than registration. Yet the US Lanham Act’s definition of “use” of a trademark remains somewhat elusive. A recent court case highlights the importance of negotiating specific, unambiguous parameters in contracts to avoid unintended consequences.

An unsettled legal landscape

Under the Lanham Act, “use in commerce” does not mean the same thing in all contexts. Courts and the US Patent and Trademark Office (USPTO) apply different standards depending on whether the issue is registration, priority, or infringement.

For registration, a mark is used in commerce under Section 45 of the Act when placed on goods, containers, displays, or tags, and the goods are actually sold or transported in commerce.

For services, use in commerce hinges on whether the mark is used or displayed in the sale or advertising of services and whether the services are actually provided. The USPTO will reject so-called “token use” for the purpose of reserving rights in a mark.

Courts apply a similar, though sometimes more flexible, standard when evaluating preparation to use the mark to establish priority. Consummation of a sale may not be required.

Meanwhile, the standard for “use in commerce” by an infringer is much more lenient. It does not matter whether the defendant actually consummated a sale, or whether the use was bona fide.

For infringement under Section 32 or 43(a), “sale, offering for sale, distribution, or advertising” is sufficient. Courts have counselled against conflating the various “use in commerce” standards, see, eg, Marshall Tucker Band v M T Indus, 238 F. Supp. 3d 759, 764-65 (DSC 2017), but uncertainty remains.

In March 2026, the US Supreme Court declined review of a multimillion-dollar judgment based on statements made in a trademark application, leaving open questions about whether the lower court improperly collapsed registration and infringement standards for trademark use.

See TNSG Health v Clarke, Case No. 25-964. The court last addressed “use in commerce” in Abitron Austria v Hetronic International, 600 US 412 (2023), holding that the Lanham Act’s reach is limited to domestic use in commerce.

The court did not articulate a clear standard by which that use should be evaluated, an issue further clouded by the concurring opinions.

A real-world example: keyword advertising

Brand owners often buy competitors’ trademarks as search engine “keywords” to divert consumers looking for the rival product.

Typically, the competitor’s trademark itself doesn’t appear in the ad; it acts as an invisible backend trigger. Courts have generally held that buying a competitor’s trademark as a keyword constitutes “use in commerce”, but rarely find it inherently infringing absent additional consumer-facing use in the advertisement or on a website.

See, eg, 1-800 Contacts v JAND, 119 F.4th 234, 239 (2d Cir. 2024); Lerner & Rowe v Brown Engstrand & Shely, 119 F.4th 711, 722 (9th Cir. 2024).

Even so, the US District Court for the Northern District of Georgia’s recent decision in Nutramax Laboratories v Rowlo, Case No. 1:2025-cv-02481 (ND Ga. Feb. 20, 2026), illustrates the need for parties, when entering into a private agreement, to clarify the governing standard for “use in commerce”.

Nutramax centres around various claims related to the marketing of competing joint supplement products for animals.

The parties settled their original lawsuit, agreeing that the defendants would not: [R]eference or use, or cause to be referenced or used, in any manner… [plaintiffs’] registered or common law trademarks…in any commercial advertising or promotion, including social media posts and comments.

Subsequently, plaintiffs alleged that defendants began using plaintiffs’ trademarks as advertising keywords on an online retail platform. This purportedly caused defendants’ products to appear at the top of search results as sponsored listings or banner advertisements when consumers searched for plaintiffs’ products.

Plaintiffs filed a new action, this time alleging breach of contract rather than infringement, arguing that keyword bidding constituted activity expressly prohibited under the settlement.

Defendants argued the court should interpret the disputed language through the lens of the Lanham Act. Under that reading, “commercial advertising or promotion” would carry its established statutory meaning—ie, involving consumer-facing use— and thus keyword bidding would fall outside the agreement’s reach.

The court consulted the definition of “use” found in the infringement section of the Lanham Act, 15 USC § 1125(a)(1). However, it observed that the parties’ settlement agreement did not define “use”, and only generally referenced the Lanham Act in nonbinding prefatory recitals.

Therefore, it was inappropriate to import any portion of the statute’s language into the contract. Rather, the court looked to common dictionary definitions of the terms “commercial”, “advertising”, and “promotion” as used in the settlement.

In contrast to the Lanham Act’s cause of action for false or misleading commercial “use”, the parties’ agreement operated as a forward-looking prohibition on any commercial “use or reference to” plaintiffs’ marks by defendants (emphasis added).

In that respect, the court held, the agreement seemed designed to reach more broadly than the statute. The court ultimately arrived at a practical interpretation: the agreement prohibits the defendants from using or referencing the trademarks to create public exposure for, or drive sales of, its own products.

Therefore, defendants’ “keyword bidding” was prohibited under the contract and the suit could not be dismissed as a matter of law.

Practical takeaways

The court in Nutramax ultimately refused to “reward the defendants’ conduct by joining them in creating an imaginary technicality within the settlement agreement”.

Whether or not the trademark was visibly displayed to the consumer, it was being used, or at minimum referenced, to generate commercial exposure for a competing product. Other litigants may not be as lucky.

Given the multitude of context-dependent definitions of trademark use, parties hoping to agree upon standards governing their adversaries’ conduct should spell those standards out in detail.

Courts may not necessarily hold that “use” equates to consumer-facing “use in commerce” unless the agreement explicitly says so, especially given differing statutory language and differing judicial interpretations of trademark “use” in various contexts.

A trademark can be “used” in a commercially meaningful way without ever appearing on a label, package, or visible advertisement.

Thus, a restriction on a party’s ability to “use” a trademark could include a wide range of conduct that might not be infringing under the Lanham Act, including invisible uses in keyword advertising or even descriptive, fair uses.

It is best, when given the chance through negotiations and written agreements, to take control of the applicable definition governing improper conduct not contemplated by the parties.

This applies equally to settlement agreements as well as licences. Sophisticated drafters should not assume that Lanham Act “use in commerce” thresholds will define the scope of their agreements.

If the parties intend to permit certain types of uses, they should consider enumerating specific prohibited conduct (keyword bidding, SEO manipulation, programmatic ad targeting) rather than relying on broad phrases.

Furthermore, they should define terms explicitly rather than relying on incorporating contextual assumptions. Otherwise, having agreed to broad language, a party could later be bound by it, to its own detriment.

Takeaways