Can A Trademark Registration Be Cancelled For De Minimis Use?

By Debby Winters

The United States Patent and Trademark Office (USPTO) requires that there be use of the mark in commerce, both in registering the mark and continued use to maintain the mark. There have always been questions about what constitutes use in commerce, as there are no hard and fast rules.  Now there’s a question about how much use must there be before it is considered de minimis use.   The reason this has come up is that the USPTO’s Trademark Trial and Appeal Board (TTAB) issued a non-precedential opinion in the cancellation case of Adidas AG v Christian Fellowship Church that could have potentially instructive influence on the future of the definition of use in commerce.  The case analyzed whether sales of only a small number of goods by Christian Fellowship Church constituted “use in commerce” under the Trademark Act.

Adidas had filed a trademark application for the mark Adizero, which was refused based upon a likelihood of confusion with two trademark registrations owned by the respondent, Christian Fellowship Church, for the mark Add A Zero (one stylized and one in standard letters). Adidas subsequently filed a petition for cancellation, claiming, among other things, that the registrations were void ab initio because the subject marks were not in use in interstate commerce as of the filing date of the underlying use-based applications.

The TTAB set out to explore the extent to which Christian Fellowship Church had used its Add A Zero marks. The evidence in this case showed that Christian Fellowship Church operated a church that had a bookstore in the basement where it sold roughly 150 shirts and caps embroidered with the Add A Zero mark.  This “modest quantity” was sold at the retail store.  Adidas alleged non-use based on these facts and Christian Fellowship Church pointed to sales of one shirt and one cap made on one date and two caps made on a subsequent date to customers who may have been out-of-state purchasers.  However, Adidas pointed out that the sales were still within the state, even if purchased by an out-of-state purchaser.

The question was whether this was in fact “use in commerce.”  The TTAB found that these sales did not constitute interstate commerce. Although the decision in Adidas AG is not precedential, it may serve as an indicator as to how the TTAB will decide future cases where a registrant has only sold a relatively small number of goods and where those sales are local, regardless of whether they are to residents of another state. Caution is warranted for trademark owners when basing a use-based trademark application on the sale of only a few of the products to be identified in their applications. Similarly, parties seeking to cancel a trademark registration based on non-use would be wise to explore the amount of products that a registrant had sold under the mark at issue.

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Filing Extension Deadline Almost Here- Double Check ACA Information on Your Return

If you received an extension of time to file your 2015 federal tax return, you have until Oct. 17 to double check your return and information on it that is related to the Affordable Care Act. The health care law includes the individual shared responsibility provision and the premium tax credit that may affect your return.

Many people already have minimum essential coverage. If this applies to you, you’ll simply report your coverage when you file your tax return by checking a box on your Form 1040, 1040A or 1040EZ.

Most taxpayers simply need to check a box on their tax return to indicate you had health coverage for all of 2015. For any month that you or anyone in your family did not have minimum essential coverage, you need to either claim or report a coverage exemption or make a shared responsibility paymentwhen you file your tax return.

If you enrolled in health coverage through the Health Insurance Marketplace, you may be eligible for the premium tax credit. If you benefited from advance payments of the premium tax credit, you must file a federal income tax return to reconcile your advance credit payments, even if you’re otherwise not required to file. Failing to file will prevent you from receiving advance credit payments in future years.

The Interactive Tax Assistant tool can help you determine if you qualify for an exemption, if you need to make a payment, or if you are eligible for the premium tax credit.Taxpayers can visit IRS.gov/aca for additional information on how the Affordable Care Act affects their return.

Remember that filing electronically is the easiest way to file a complete and accurate tax return. Electronic filing options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.

Before filing the 2015 return, be sure to make a copy and keep it and all supporting documents for a minimum of three years. Doing so will make it easier to fill out a 2016 return next year. In addition, you will often need the adjusted gross income amount from your 2015 return to properly e-file your 2016 return.

For more information about the Oct. 17 extension deadline for filing 2015 tax returns, see IRS Special Edition Tax Tip 2016-14and news release IR-2016-130.

 

Reminder for Parents and Students: Check Out College Tax Credits for 2016 and Years Ahead

WASHINGTON ― With another school year now in full swing, the Internal Revenue Service today reminded parents and students that now is a good time to see if they qualify for either of two college tax credits or other education-related tax benefits when they file their 2016 federal income tax returns next year.

In general, the American Opportunity Tax Credit or Lifetime Learning Credit is available to taxpayers who pay qualifying expenses for an eligible student. Eligible students include the taxpayer, spouse and dependents. The American Opportunity Tax Credit provides a credit for each eligible student, while the Lifetime Learning Credit provides a maximum credit per tax return.

Though a taxpayer often qualifies for both of these credits, he or she can only claim one of them for a particular student in a particular year.  To claim these credits on their tax return, the taxpayer must file Form 1040 or 1040A and complete Form 8863, Education Credits.

The credits apply to eligible students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions. The credits are subject to income limits that could reduce the amount taxpayers can claim on their tax return.

To help determine eligibility for these benefits, taxpayers should visit theEducation Credits Web page or use the IRS’s Interactive Tax Assistant tool. Both are available on IRS.gov.

Normally, a student will receive a Form 1098-T from their institution by Jan. 31, 2017. This form will show information about tuition paid or billed along with other information. However, amounts shown on this form may differ from amounts taxpayers are eligible to claim for these tax credits. Taxpayers should see the instructions to Form 8863 and Publication 970 for details on properly figuring allowable tax benefits.

Many of those eligible for the American Opportunity Tax Credit qualify for the maximum annual credit of $2,500 per student. Students can claim this credit for qualified education expenses paid during the entire tax year for a certain number of years:

  • The credit is only available for four tax years per eligible student.
  • The credit is available only if the student has not completed the first four years of postsecondary education before 2016.

Here are some more key features of the credit:

  • Qualified education expenses are amounts paid for tuition, fees and other related expenses for an eligible student. Other expenses, such as room and board, are not qualified expenses.
  • The credit equals 100 percent of the first $2,000 spent and 25 percent of the next $2,000. That means the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualified expenses for an eligible student.
  • Forty percent of the American Opportunity Tax Credit is refundable. This means that even people who owe no tax can get a payment of up to $1,000 for each eligible student.
  • The full credit can only be claimed by taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less. For married couples filing a joint return, the limit is $160,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $180,000 or more and singles, heads of household and some widows and widowers whose MAGI is $90,000 or more.

The Lifetime Learning Credit of up to $2,000 per tax return is available for both graduate and undergraduate students. Unlike the American Opportunity Tax Credit, the limit on the Lifetime Learning Credit applies to each tax return, rather than to each student. Also, the Lifetime Learning Credit does not provide a benefit to people who owe no tax.

Though the half-time student requirement does not apply to the lifetime learning credit, the course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills. Other features of the credit include:

  • Tuition and fees required for enrollment or attendance qualify as do other fees required for the course. Additional expenses do not.
  • The credit equals 20 percent of the amount spent on eligible expenses across all students on the return. That means the full $2,000 credit is only available to a taxpayer who pays $10,000 or more in qualifying tuition and fees and has sufficient tax liability.
  • Income limits are lower than under the American Opportunity Tax Credit. For 2016, the full credit can be claimed by taxpayers whose MAGI is $55,000 or less. For married couples filing a joint return, the limit is $111,000. The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $131,000 or more and singles, heads of household and some widows and widowers whose MAGI is $65,000 or more.

Eligible parents and students can get the benefit of these credits during the year by having less tax taken out of their paychecks. They can do this by filling out a new Form W-4 with their employer to claim additional withholding allowances.

There are a variety of other education-related tax benefits that can help many taxpayers. They include:

  • Scholarship and fellowship grants — generally tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.
  • Tuition and fees deduction claimed on Form 8917—for some, a worthwhile alternative to the American Opportunity Tax Credit or Lifetime Learning Credit.
  • Student loan interest deduction of up to $2,500 per year.
  • Savings bonds used to pay for college — though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years old.
  • Qualified tuition programs, also called 529 plans, used by many families to prepay or save for a child’s college education.

Taxpayers with qualifying children who are students up to age 24 may be able to claim a dependent exemption and the Earned Income Tax Credit.

The general comparison table in Publication 970 is a useful guide to taxpayers in determining eligibility for these benefits. Details can also be found in the Tax Benefits for Education Information Center on IRS.gov.

IRS Reminds Extension Filers of the Oct. 17 Deadline

Millions of taxpayers ask for an extra six months to file their taxes every year. If you are one of them, then you should know that Monday, Oct. 17 is the extension deadline in 2016. This is so because Oct. 15 falls on a Saturday. If you have not yet filed, here are some things to keep in mind about the extension deadline and your taxes:

  • Try IRS Free File or e-file. You can still e-file your tax return for free through IRS Free File. The program is available only on IRS.gov through Oct. 17. IRS e-file is easy, safe and the most accurate way to file your taxes.
  • Use Direct Deposit. If you are due a refund, the fastest way to get it is to combine direct deposit and e-file. Direct deposit has a proven track record; eight out of 10 taxpayers who get a refund choose it.
  • Use IRS Online Payment Options. If you owe taxes, the best way to pay them is with IRS Direct Pay. It’s the simple, quick and free way to pay from your checking or savings account. You also have other online payment options. Check them out by clicking on the “Payments” tab on the IRS.gov home page.
  • Refunds. As you prepare to file your 2015 return, keep in mind next year’s taxes. IRS is urging taxpayers to check their tax withholding as the year winds down. New factors may delay tax refunds in 2017. For more on what you can do now, see our Aug. 31 news release.
  • Don’t Overlook Tax Benefits. Be sure to claim all the tax breaks you are entitled to. These may include the Earned Income Tax Credit and the Saver’s Credit. The American Opportunity Tax Credit can help offset college costs.
  • Keep a Copy of Your Return. Be sure to keep a copy of your tax return and supporting documents for at least three years. Among other things, this will make filing next year’s return easier. When you e-file your 2016 return, for example, you will often need the adjusted gross income (AGI) amount from your 2015 return.
  • File On Time. If you owe taxes, file on time to avoid a potential late filing penalty. If you owe and can’t pay all of your taxes, pay as much as you can to reduce interest and penalties for late payment. You might also consider an installment agreement where you can pay over time.
  • More Time for the Military. Military members and those serving in a combat zone generally get more time to file. If this applies to you, you typically have until at least 180 days after you leave the combat zone to both file returns and pay any taxes due.
  • More Time in Disaster Areas. If you have an extension and live or work in a disaster area, you often have more time to file. Currently, taxpayers in parts of Louisiana and West Virginia have additional extensions beyond Oct. 17. See the disaster relief page on IRS.gov for details.
  • Try Easy-to-Use Tools on IRS.gov. Use the EITC Assistant to see if you’re eligible for the credit. Use the Interactive Tax Assistant tool to get answers to common tax questions. The IRS Tax Map gives you a single point to get tax law information by subject. Find them all here.

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