author: TARANTO, Circuit Judge.

text:
    IN RE: NUVASIVE, INC., Appellant
    2015-1672, 2015-1673
    United States Court of Appeals, Federal Circuit.
    Decided: November 9, 2016

      Michael T. Rosato, Wilson, Sonsini, Goodrich & Rosati, PC, Seattle, WA, argued for appellant. Also represented by ANDREW Swanson Brown; Riohard Torczon, Washington, DC; Grace J. Pax, Paul David Tripodi, II, Los Angeles, CA.
    Joseph Matal, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor Michelle K. Lee. Also represented by Thomas W. Krause, Scott Weidenfeller.
    Before MOORE, WALLACH, and TARANTO, Circuit Judges.
   TARANTO, Circuit Judge.

NuVasive, Inc. owns U.S. Patent No. 8,187,334, which describes and claims implants for spinal fusion surgery. Medtronic, Inc,—which settled with NuVasive and has withdrawn from the present appeals—filed two petitions for inter partes review with the Patent and Trademark Office, which the Patent Trial and Appeal Board instituted as IPR2013-507 (IPR507) and IPR2013-508 (IPR508). The Board ultimately cancelled all but one'of the challenged claims under 35 U.S.C. § 103, finding in one prior-art reference, ie., Michelson’s U.S. Patent No. 5,860,973, a spina! fusion implant that meets two of the claim requirements of the '334 patent—having a length both greater than 40 mm and at least 2.5 times its width. Medtronic, Inc. v. NuVasive, Inc,, IPR2013-507, 2015 WL 996353 (PTAB Feb. 11, 2015) (IPR507 Board Decision); Medtronic, Inc. v. NuVasive, Inc., IPR2013-508, 2015 WL 996354 (PTAB Feb. 11, 2015) (IPR508 Board Decision).

On appeal,' NuVasive contends that it did not receive adequate notice of or opportunity to address that reading of Michelson and its consequences for the overall obviousness analysis. We agree in part. In IPR507, Medtronic’s petition put Nu-Vasive on notice that Medtronic was relying on particular portions of Michelson to teach the '334 patent’s claimed long-and-narrow implants. In that proceeding, we see neither procedural nor other error in the Board’s decision, and we therefore affirm. In IPR508, however, Medtronic’s petition did not notify NuVasive of the assertions about the pertinent portions of Michelson that later became critical. In that proceeding, we conclude, the Board’s ultimate reliance on that material, together with its refusal to allow NuVasive to respond fully once that material was called out, violated NuVasive’s rights under the Administrative Procedure Act. Our affirmance in IPR507 resolves the un-patentability of the '334 patent’s claims 1-5, 10, 11, 14, 15, and 19-28, but claims 16 and 17 are at issue only in IPR508. We vacate the Board’s IPR508 decision and remand for further proceedings on claims 16 and 17.

I

The spinal fusion implant of the '334 patent is designed to be inserted between two vertebrae to replace a damaged or diseased intervertebral disc. '334 patent, col. 1, lines 29-36. The implant shares many features with prior-art implants, such as anti-migration teeth to hold the implant in place, id., col. 2, lines 40-52, vertical holes (fusion apertures) to allow bone to grow through the implant, id., col. 5, lines 36-40, and horizontal holes (visualization apertures) so that a doctor can see such bone growth, id., col. 5, lines 54-66. Although the patent itself does not limit the methods of inserting the implant, its long-and-thin design is particularly suited to an approach from the side, through the psoas muscle, rather than from the front or back of the patient. Id., col. 5, lines 29-35. The focus of the obviousness issue now on appeal is certain dimensions of the claimed implant, specifically, a length that is both greater than 40 mm and at least 2.5 times the maximum width. The relevant part of claim 1, the only independent claim, reads:

1. A spinal fusion implant of non-bone construction positionable within an inter-body space between a first vertebra and a second vertebra ...
wherein said implant has a longitudinal length greater than 40 mm extending from a proximal end of said proximal wall to a distal end of said distal wall; wherein a central region of said implant includes portions of the first and second sidewalls positioned generally centrally between the proximal wall and the distal wall, at least a portion of the central region defining a maximum lateral width of said implant extending from said first sidewall to said second sidewall, wherein said longitudinal length is at least two and half [sic] times greater than said maximum lateral width ....

'334 patent, col. 12, line 32, through col. 13, line 4 (emphases added).

NuVasive asserted the '334 patent against Medtronic in Warsaw Orthopedic, Inc. v. NuVasive, Inc., No. 3:12-ev-02738-CAB-MDD (S.D. Cal.). Medtronic thereafter filed two separate petitions for inter partes review of the '334 patent under 35 U.S.C. §§ 311-319.

Medtronic’s petition in what became IPR507 relied primarily on U.S. Patent Application Publication No. 2002/0165550 (published Nov. 7, 2002) (Frey), which teaches an implant whose length is at least 2.5 times the width. As. relevant here, Medtronic argued that it would have been obvious to modify Frey to have a length greater than 40 mm, as taught by Michelson. But in one brief passage, Medtronic’s petition went further. In pointing out that Michelson also teaches many of the '334 limitations, Medtronic stated that “[l]ike Frey, Michelson discloses example lateral fusion implants having an elongated shape” and “dimensions that are longer than wide,” citing Michelson, col. 10, line 6, through col. 11, line 15. J.A. 172. That cited range includes a discussion of Michelson’s Figure 18, which shows an “alternative embodiment ... 1000 ... similar to the spinal fusion implant 900, but [which] has a narrower width such that more than one spinal fusion implant 1000 may be combined in a modular fashion for insertion within the disc space D between the adjacent vertebrae.” Michelson, col. 10, lines 48-55.

Medtronic’s petition in what became IPR508 relied primarily on the Synthes Vertebral Spacer-PR Brochure, Synthes Spine 2002 (SVS-PR), and the Telamon VerteStaek PEEK Vertebral Body Spacer Brochure and the accompanying Telamon Posterior Impacted Fusion Devices Guide 2003 (jointly, Telamon), which teach implants whose lengths are at least 2.5 times their widths. Medtronic argued that it would have been obvious to modify either SVS-PR or Telamon to have lengths greater than 40 mm, as taught by Michelson. But in the SVS-PR/Telamon petition, unlike the Frey petition, Medtronic did not include an assertion about or citation to material encompassing Michelson’s Figure 18.

In response to Medtronic’s petitions, the Board, exercising institution authority delegated by the PTO Director, 37 C.F.R. §§ 42.4, 42.108, determined that there was a reasonable likelihood that Medtronic would establish, by a preponderance of the evidence, that claims 1-5, 10, 11, 14, 15, and 18-28 would have been obvious over Frey, in view of Michelson. On that basis, the Board instituted IPR507. The Board made comparable determinations as to claims 1-5, 10, 11, and 14-28 based on either SVS-PR or Telamon, in view of Michelson and U.S. Patent Application Publication No.' 2003/0028249 (published Feb. 6, 2003) (Baccelli). On that basis, the Board instituted IPR508. The two proceedings involve all the same claims apart from claims 16 and 17, which are the subject of IPR508, but not IPR507.

When NuVasive filed its Patent Owner Responses, it argued that no single reference taught an implant that was both longer than 40 mm and had a length at least 2.5 times its width. NuVasive pointed to Michelson’s Figures 16 (showing long-and-wide rectangular implant 900), 19 (showing a plurality of “narrower” implants 1000 lined up in the disc space), and 20 (showing another long-and-wide rectangular implant), as evidence that a person of ordinary skill reading Michelson would size an implant to be both long and wide (not long and narrow) in order to maximize the surface area of contact with the vertebrae, as taught by Michelson. NuVasive further argued that there was no reason for a person of skill in the art to combine the length of Michelson with the length-to-width ratio of the primary references, because doing so would make the resulting implant an unsuitable size for the intended insertion path of the primary references, which Nu-Vasive contends were inserted from the front or back, not the side.

In its replies, Medtronic pointed to Michelson’s Figure 18 specifically and argued that it disclosed an implant whose length was greater than 40 mm and at least 2.5 times its width.

NuVasive objected to Medtronic’s argument regarding Michelson’s Figure 18, which it contended was a new ground of invalidity asserted for the first time on reply. It requested leave to file motions to strike or, alternatively, surreplies, which the Board denied. NuVasive also attempted to address the matter at oral argument, but the Board refused to allow NuVasive to make substantive arguments in response. When Medtronic made arguments relating to Michelson’s Figure 18 in its rebuttal time, NuVasive objected again, but the Board assured NuVasive that it understood NuVasive’s position and would consider the propriety of Medtronic’s arguments when making a final decision.

The Board ultimately held, in IPR507, that claims 1-5, 10, 11, 14, 15, and 19-28 would have been obvious over Frey and Michelson, but it upheld claim 18. In IPR508, the Board held that claims 1-5, 10, 11, 14-17, and 19-28 would have been obvious over either SVS-PR or Telamon in view of Baccelli and Michelson, but it upheld claim 18.

The Board’s decisions relied heavily on its findings that Michelson, by itself, discloses both disputed dimensional limitations in a single implant—one whose length is both greater than 40 mm and at least 2.5 times its width—so that no combining of references was needed to arrive at an implant that meets both requirements. Thus, in IPR507, the Board never found that Frey teaches an implant with a length at least 2.5 times the width. Rather, it found that if 'one combined (1) Michelson’s teaching that the preferred overall width of the implant was 26 mm with (2) Michelson’s teaching that at least two “narrower” implants could be combined to fit that space, then at least one of the “narrower” implants would be at most 13 mm wide, which is less than the preferred length (42 mm) divided by 2.5. IPR507 Board Decision at *5. On that basis, the Board concluded that “it would have been obvious to one of ordinary skill in the art to have provided an implant with a length of greater than 40 mm (e.g., 42 mm) and at least 2.5 times the width.” Id. at *6.

Similarly, in IPR508, the Board did not find that SVS-PR or Telamon discloses an implant whose length is at least 2.5 times its width. Rather it “credit[ed] the testimony [submitted along with Medtronic’s reply] of Petitioner’s Declarant (Dr. Richard A, Hynes) that Michelson discloses a spinal implant with a length that is greater than 40mm and at least 2.5 times the width,” made the same calculations it made in IPR507, and came to the same conclusion verbatim. IPR508 Board Decision at *4.

NuVasive appeals. Medtronic had cross-appealed from the Board’s decisions regarding claim 18, but Medtronic later withdrew, and we dismissed, the cross-appeals (Nos. 2015-1674, -1712). The Director of the PTO intervened to defend the Board’s rulings against NuVasive’s inadequate-process challenges. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

II

Under the Administrative Procedure Act, we must “hold unlawful and set aside agency action ... not in accordance with law [or] ... without observance of procedure required by law.” 5 U.S.C. § 706, In the non-IPR setting, we have made clear that whether a ground the Board relied on was “new,” requiring a new opportunity to respond, is a question of law, subject to de novo review. See In re Stepan Co., 660 F.3d 1341, 1343 (Fed. Cir. 2011). No different standard of review is called for on the closely related issue in the IPR context. See Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1080 (Fed. Cir. 2015) (noting similarity of issues). Obviousness is a question of law based on underlying determinations of fact. See, e.g., id. at 1073. We review the Board’s conclusions of law de novo and its findings of fact for substantial evidence. Id.

We first address NuVasive’s procedural challenges to the Board’s reliance on Michelson’s Figure 18 in the two IPRs. We then address NuVasive’s remaining challenges.

A

“A patent owner in [NuVasive’s] position is undoubtedly entitled to notice of and a fair opportunity to meet the grounds of rejection,” based on due-process and APA guarantees. Belden, 805 F.3d at 1080. “For a formal adjudication like the inter partes review considered here, the APA imposes particular requirements on the PTO. The agency must ‘timely inform[]’ the patent owner of ‘the matters of fact and law asserted,’ -5 U.S.C. § 554(b)(3), must provide ‘all interested parties opportunity for the submission and consideration of facts [and] arguments ... [and] hearing and decision on notice,’ id. § 554(c), and must allow ‘a party ... to submit rebuttal evidence ... as may be required for a full and true disclosure of the facts,’ id.. § 556(d).” Dell Inc. v. Acceleron, LLC, 818 F.3d 1293, 1301 (Fed. Cir. 2016) (alterations in original). While “the rules and practices of the Board generally protect against loss of patent rights without the required notice and opportunity to respond,” Belden, 805 F.3d at 1080 (emphasis added), those rules and practices protect against such loss in a given case only when, upon a proper request, -the PTO actually provides the opportunities required by the APA and due process.

1

Although the Board is not limited to citing only portions of the prior art specifically drawn to its attention, in this case it is clear that the Board treated Michelson’s Figure 18 as an essential part of its obviousness findings identifying claim elements in the prior art. It relied on Michelson’s Figure 18 and nothing else for a prior-art disclosure of an implant having a length that is greater than 40 mm and at least 2.5 times its width. The Board made no findings that another reference disclosed an implant having both those characteristic's. Nor did it find that such dimensions would have been obvious even if not found together in a single piece of prior art.: Nor, indeed, did the Board find a prior-art implant having a length at least 2.5 times its width and then explain the obviousness of a combination of that limitation with the distinct requirement of sufficient length.

We are in no position to treat the Board’s finding about Michelson’s Figure 18 as immaterial given the limited other findings so far made by the Board. Nor can this factual finding be analogized to others that merely reinforce the meaning of another prior-art disclosure. Thus, the Figure 18 finding did not “merely serve[ ] to describe the state of the art [at the time of the invention],” informing the understanding of another, separate prior-art disclosure of a claim limitation. Genzyme Therapeutic Prods. Ltd. v. Biomarin Pharm. Inc., 825 F.3d 1360, 1368-69 (Fed. Cir. 2016) (finding that the Board did not violate the APA by citing references not part of the combinations set forth in the institution decisions where those references “merely served to describe the state of the art [at the time of invention],” and were “not among the prior art references that the Board relied upon to establish any claim limitations”); Belden, 805 F.3d at 1079 (noting that certain explanatory evidence was not “necessary to the prima facie case”).

Under the APA’s standards, NuVasive was entitled to an adequate opportunity to respond to this asserted fact about Michelson. And under the APA’s fact-specific standard, common sense, and this court’s precedent, that entitlement was not lessened in this case by virtue of the opportunity NuVasive had to respond to other factual assertions about Michelson. In Dell, we held that an opportunity to respond was needed when the petitioner, to make its anticipation showing, newly pointed to a previously unmentioned portion of the allegedly anticipatory prior-art patent, even though it had earlier focused extensively on other portions of that prior-art patent. 818 F.3d at 1301. In the related, non-IPR context, we have relied on the APA’s requirements to find a “new ground” where “the thrust of the rejection” has changed, even when the new ground involved the same prior art as earlier asserted grounds of invalidity. In re Leithem, 661 F.3d 1316, 1319 (Fed. Cir. 2011). Here, the assertion about Figure 18 on which the Board ultimately relied is sufficiently distinct from Medtronic’s other assertions about Michelson that NuVasive was entitled to the APA-required opportunity to respond to it.

2

In IPR507, NuVasive had that opportunity. There is no dispute that Nu-Vasive’s Patent Owner Response was an adequate opportunity to respond if Med-tronic’s petition put NuVasive on notice of the assertion about Figure 18. In IPR507, we conclude that the notice was at least minimally sufficient.

In IPR607, Medtronic’s petition cited the Michelson text that specifically discusses Figure 18 in addition to nearby figures in Michelson. The petition did so in asserting that the text shows “longer than wide” implants. J.A. 172. The only limitation in the '334 patent addressing a comparison of length to width is the one requiring length at least 2.5 times width. It is true that Medtronic did not make a clear or direct reference to that limitation or a clear or direct assertion that the 2.5 ratio is shown in Michelson, in Figure 18 or elsewhere. But we think that the citation of the text discussing Figure 18, plus the reference to “longer than wide” implants, should have put NuVasive on notice that it was obliged to use its Patent Owner Response to address Figure 18 and its relationship to the length/width ratio claim limitation.

3

IPR508 is different. In that proceeding, Medtronic did not include in its petition the same citations to or assertions about the Michelson passage that it included in the IPR507 petition. In IPR508, unlike IPR507, there was no notice of the Figure 18 point before NuVasive filed its Patent Owner Response. The opportunity to file that Response therefore did not provide the required opportunity to address the factual assertion about Figure 18 on which the Board ultimately relied.

Despite the consolidated hearing in the two proceedings, the Board treated each inter partes review as a separate, distinct proceeding, and it issued separate final written decisions, independently invalidating some of the same claims based on different mixes of prior art. The Director has furnished no persuasive basis on which we are prepared to hold that a (barely sufficient) notice in one proceeding constituted an obligation-triggering notice in the other proceeding in which a comparable notice was missing. Nor do we see a basis for concluding that the Board could rely on the Figure 18 point in IPR508, where no sufficient notice was given, just because NuVasive chose, in cut-and-paste fashion, to include highly similar discussions of Mi-ehelson in its Patent Owner Responses in the two proceedings. We note that neither of NuVasive’s Responses addresses Figure 18, even while they do address some of the content of the Miehelson passage cited by Medtronic in the IPR507 petition.

Not until Medtronic’s Reply, after Nu-Vasive’s Patent Owner Response, was Nu-Vasive given fair notice in IPR508 of the Figure 18 factual assertion on which the Board eventually relied. But at no point after the Reply did the Board give NuVa-sive the required opportunity to respond to that point. Despite requests from NuVa-sive, the Board refused to permit NuVa-sive to file a surreply or even to address the matter during oral argument.

The Director points out that, although NuVasive was prohibited from filing a motion to strike or a surreply, it was permitted to cross-examine Dr. Hynes, the relevant expert for Medtronic, and to file “observations” on the cross-examination. We have identified such observations as among the vehicles available to protect against APA violations, but we have not declared that vehicle always sufficient to ensure the required opportunity to respond. Belden, 805 F.3d at 1081. Here, the opportunity to file observations was not enough. “Observations” are not a vehicle for submitting new evidence, including new expert declarations, by the patent owner. Indeed, the permitted content and format of observations are tightly circumscribed, see Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,768 (Aug. 14, 2012), and here the Board rejected portions of NuVasive’s observations for being too argumentative. We cannot view “observations” as a substitute for the opportunity to present arguments and evidence.

B

1

Finding no procedural violation in IPR507, we consider NuVasive’s remaining arguments against the Board’s obviousness ruling in that IPR. NuVasive contends that the Board impermissibly relied on speculation to find that Miehelson taught an implant whose length is 2.5 times its width and that the Board did not sufficiently find a reason to combine Miehelson with the primary references. We reject those contentions.

As to what Miehelson discloses: Far from relying on speculation, the Board had a solid basis in Medtronic’s argument and in Miehelson itself for finding that Figure 18 disclosed an implant having both the length and width characteristics at issue. The Board “base[d] its decision on arguments that were advanced by a party,” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016), and, “[i]n the circumstances here,” could permissibly “rely on its own reading of [Miehelson]— supported by the Petition’s observations about it”—to find that the claim-required implant characteristics were disclosed, Belden, 805 F.3d at 1074.

Medtronic pointed the Board to Figure 18 and the corresponding description as supporting the proposition that Miehelson disclosed longer-than-wide implants. Michelson’s specification expressly states that the preferred length of embodiment 900 was 42 mm and the preferred width was 26 mm. Michelson, col. 10, lines 42-47. It then states that “spinal fusion implant 1000 is similar to the spinal fusion implant 900, but has a narrower width such that more than one spinal fusion implant 1000 may be combined in a modular fashion for insertion within the disc space.” Id., col. 10, lines 50-56. Figure 18 shows implant 1000, and Figure 19 shows three implant 1000s lined up in the disk space. Id., Figures 18 & 19. Even if Figure 19 were , taken as showing only two implants (its point is to show more than one), this is substantial, and anything but speculative, evidence from which to infer that at least one of the set of “narrower” implants must be at most 13 mm wide (at its maximum), which is less than the preferred length (42 mm) divided by 2.5 (16.8 mm): >

As to reasons to combine: The Board did not have to find a reason that a relevant artisan would combine the length of an implant from one prior-art reference with the length-to-width ratio of an implant from another reference, because it found that Michelson disclosed an implant meeting both limitations. Although the Board did not make findings as to whether any of the other claim limitations (such as fusion apertures or anti-migration teeth) are disclosed in the prior art, it did not have to: NuVasive did not present arguments about those limitations to the Board.

NuVasive’s arguments before the Board focused only on the dimensions of the implant—(1) that it would not have been obvious to modify Frey to have a length greater than 40 mm because it would make Frey unsuitable for its intended path of insertion, (2) that it would not have been obvious to lengthen Frey to be longer than the intra-annulus region in which Frey was intended to sit, and (3) that if a skilled artisan had undertaken to modify Frey according to Michelson, the resulting implant would have been long and wide (not long and narrow) because Michelson stresses the importance of maximizing surface-area contact with the vertebrae. Substantial evidence supports the Board’s specific findings that (1) “a spinal implant measuring up to 45 mm in length” would not render Frey “inoperable” for its intended purpose, even if Frey were limited to use in transforaminal lumbar interbody fusion (TLIF) procedures, IPR507 Board Decision at *4; (2) an implant could be longer than 40 mm and not violate the teaching of Frey that it fit within the inner-annulus region, id. at *4-5; and (3) Michelson in fact teaches the relevant long-and-narrow implants, id. at *5. This was sufficient to make an affirmative, supported case for the obviousness of the challenged '334 claims, given the limited arguments presented by NuVasive. The Board, having found the only disputed limitations together in one reference, was not required to address undisputed matters.

In particular, NuVasive argues on appeal (1) that a skilled artisan would never have made a long-and-narrow implant for any use other than as a component to be assembled into a single, oversized, modular implant; (2) that, given the state of modular implants at the time of the invention, no one would have tried to make one; and (3) that the boomerang-shaped Frey implant would not have been suitable to be modified to be modular. But NuVasive did not present any meaningful argument to that effect to the Board. The Board cannot be faulted for not addressing such an argument where, as we have determined for IPR507, NuVasive was on notice, before it filed its Patent Owner Response, that Michelson’s Figure 18 could be used to disclose the dimensional limitations of the '334 patent and therefore was on notice that those dimensions might be combined with other prior-art references.

2

In IPR508, we have found a procedural violation. That finding does not support reversal of the Board’s cancellations. Rather, it warrants a remand for further proceedings.

NuVasive relies on the Board’s statements finding inadequate Medtronic’s showings with respect to claim 18, which requires particular dimensions—namely, a length greater than 40 mm and a maximum width of 18 mm. See IPR508 Board Decision at *8; see also IPR507 Board Decision at *6. But those statements do not entail a failure of proof of obviousness as to claims lacking the particular dimensional requirements of claim 18. .They do not decide more generally that it would not have been obvious to combine “one dimension from one implant with-a second dimension from another implant.” Resp. & Reply Br. 30-31; see id. at 39-40. Nor do they preclude the Board from considering the import of Michelson’s'Figure 18 after giving NuVasive a full opportunity to submit additional evidence and arguments on that point. See In re Kumar, 418 F.3d 1361, 1367-69 (Fed. Cir. 2005).

Conclusion

For the foregoing reasons, we affirm the Board’s final written decision in IPR2013-507, invalidating claims 1-5, 10, 11, 14, 15, and 19-28 and upholding claim 18. We vacate the Board’s decision in IPR2013-508 and remand for further proceedings regarding claims 16 and 17 in accordance with this opinion.

No costs,

AFFIRMED IN PART, VACATED IN PART, AND REMANDED

      . Medtronic separately sought review of Nu-Vasive’s U.S. Patent No. 8,361,156. The Board decision in that review, IPR2013-506, is before this court in In re NuVasive, No. 2015-1670.

      . What NuVasive said in its Responses was enough to allow the Board to conclude that Medtronic’s Reply assertions about Figure 18 came within the rule that “[a] reply may only respond to arguments raised in the corresponding opposition, patent owner preliminary response, or patent owner response." 37 C.F.R. § 42.23(b). But satisfying that rule does not mean that the pre-Response notice was sufficient. See In re Biedermann, 733 F.3d 329, 338 (Fed. Cir. 2013) (“A new ground of rejection is not negated by the fact that the Board is responding to an appellant’s argument.”).


source: Caselaw Access Project

author: PROST, Chief Judge.

license: Public Domain

text:
    DIVERSIFIED GROUP INCORPORATED, James Haber, Plaintiffs-Appellants v. UNITED STATES, Defendant-Appellee
    2016-1014
    United States Court of Appeals, Federal Circuit.
    Decided: November 10, 2016

      JaspeR G. Taylor, III, Norton Rose Fulbright US LLP, Houston, TX, argued for plaintiffs-appellants. Also represented by Riohard Lee Hunn.
    Francesoa Ugolini, Tax Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by Ivan Clay Dale, Gilbert Steven Rothenberg, Caroline D. Ciraolo, Diana L. Erbsen.
    Before PROST, Chief Judge, NEWMAN and TARANTO, Circuit Judges.
   PROST, Chief Judge.

Diversified Group Incorporated (“Diversified”) and its president, Janies Haber, (collectively, “Appellants”) brought this action against the United States, seeking a refund of payments made toward a federal tax penalty which the Internal Revenue Service (“IRS”) assessed under 26 U.S.C. § 6707 for failure to comply with tax shelter registration requirements under 26 U.S.C. § 6111. The United States Court of Federal Claims (“Claims Court”) held that it lacked jurisdiction over the case because Appellants did not comply with the full payment rule. For the reasons stated below, we affirm.

Background

The circumstances giving rise to this appeal are summarized in the Claims Court’s decision, Diversified Group, Inc. v. United States, 123 Fed.Cl. 442 (2015). We provide information relevant to the issues on appeal here.

Between 1999 and 2001, Appellants sold two tax avoidance strategies to 192 of their clients: the Option Partnership Strategy (“OPS”) and the Financial Derivatives Investment Strategy (“FDIS”). Each strategy involved a set series of transactions, which, when exercised by an individual client, would yield an artificial tax loss or deduction. Each client would contribute the initial amount to be invested in these transactions, as well as pay a fee of 3-4.5%. Diversified did not register any of these services as tax shelters.

The then-applicable version of 26 U.S.C. § 6111 required that “[a]ny tax shelter organizer -shall register the tax shelter with the Secretary (in such form and in such manner as the Secretary may prescribe) not later than the day on which the first offering for sale of intei-ests in such tax shelter occurs.” 26 U.S.C. § 6111(a)(1). Under § 6111(c)(1), a “tax shelter” was defined as:

any investment—(A) with respect to which any person could reasonably infer from the representations made, or to be made, in connection with the offering for sale of interests in the investment that the tax shelter ratio for any investor as of the close of any of the first 6 years ending after the date on which such investment is offered for sale may be greater than 2 to 1, and
(B) which is—
(i) required to be registered under a Federal or State law regulating securities,
(ii) sold pursuant to an exemption from registration requiring the filing of a notice with a Federal or State agency regulating the offering or sale of securities, or
(iii) a substantial investment.

Section 6111(c)(4) defined a “substantial investment” as an investment where “(A) the aggregate amount which may be offered for sale exceeds $260,000, and (B) there are expected to be 5 or more investors.”

Treasury Department regulations provided that “[r]egistration is accomplished by filing a properly completed Form 8264 with the Internal Revenue Service. The Internal Revenue Service will assign a registration number to each tax shelter that is registered.” Temp. Treas. Reg. § 301.611-1T, A-l, A-47. When an investment qualified as a tax shelter because it was a “substantial investment” under § 6111(c)(l)(B)(iii), a separate Form 8264 needed to be filed for each “investment” that made up the “substantial investment” if the investment

differed] from the other investments in a substantial investment with respect to any of the following: (1) Principal asset, (2) Accounting methods, (3) Federal or state agencies with which the investment is registered or with which an exemption notice is filed, (4) Methods of financing the purchase of an interest in the investment, (6) Tax shelter ratio.

Id. at A-48. The regulations made clear that “[s]uch aggregated investments, however, are part of a single tax shelter.” Id.

If a person failed to register a tax shelter under § 6111, they were subject to a penalty under 26 U.S.C. § 6707. Section 6707(a) provided in relevant part:

(1) Imposition of penalty.—If a person who is required to register a tax shelter under section 6111(a)—
(A) fails to register such tax shelter on or before the date described in section 6111(a)(1), or
(B) files false or incomplete information with the Secretary with respect to such registration,
such person shall pay a penalty with respect to such registration in the amount determined under paragraph (2) or (3), as the case may be. No penalty shall be imposed under the preceding sentence with respect to any failure which is due to reasonable cause.
(2) Amount of penalty.—Except as provided in paragraph (3), the penalty imposed under paragraph (1) with respect to any tax shelter shall be an amount equal to the greater of—
(A) 1 percent of the aggregate amount invested in such tax shelter, or
(B) $500.

In 2002, the IRS began conducting a penalty audit, pursuant to § 6707, of Diversified for potential failures to register a tax shelter under § 6111. Eventually, on December 16, 2013, the IRS issued two “Notices of Proposed Adjustment” (“NO-PAs”) assessing penalties of $24,868,451 for failure to register OPS and $17,241,032 for failure to register FDIS, respectively. The penalties totaled $42,109,483. According to the IRS, OPS and FDIS each qualified as a “tax shelter” under § 6111 because the computed tax shelter ratio was greater than 2:1 and each was a “substantial investment” under § 6111(c)(4), The IRS calculated each penalty by, pursuant to § 6707(a)(2)(A), computing the “aggregate amount invested” by each client, multiplying this number by 1%, and summing this result across clients. On January 16, 2014, the IRS reduced the amount due to $24,920,904 because the other $17,188,579 had been “[p]aid by [ojthers.”

On February 28, 2014, Diversified made a payment of $15,500, which was the portion of the OPS penalty that it incurred from its dealings with a single client, Stanley Dziedzie, ($15,450) plus interest ($50). Haber made a payment of $18,370, which was the portion of the FDIS penalty that he incurred from his dealings with another client, Albert Kotite, ($18,310) plus interest ($60). They filed refund claims for each. The IRS denied these claims on April 10, 2014.

Appellants filed the instant action in the Claims Court on July 18, 2014, seeking refunds of the $15,500 and $18,370 payments. On August 26, 2015, the Claims Court dismissed the case under Rule 12(b)(1) of the Rules of the U.S. Court of Federal Claims, finding that it lacked jurisdiction because Appellants had failed to satisfy the “full payment rule,” which, under Supreme Court precedent, requires that a person seeking a refund for a tax or penalty pay in full before filing suit. Flora v. United States, 362 U.S. 145, 177, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960). The Claims Court reissued its opinion on September 29 to correct certain citations to statutory language.

Appellants timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

Discussion

I

An initial question that we must address is how this appeal comes to us procedurally. The Claims Court issued its opinion on August 26 and entered judgment pursuant to this opinion on September 25. However, this opinion cited to the post-2004 versions of § 6111 and § 6707, instead of the pre-2004 versions which are applicable here. Accordingly, the Claims Court reissued its opinion with corrected citations (but no other changes) on September 29 and entered judgment the following day. However, just before it did this, on September 28, plaintiffs filed, a notice of appeal on the Claims Court’s original judgment. Appellants argue- that this September 28 notice of appeal divested the Claims Court of its jurisdiction such that it did not have jurisdiction to vacate its original judgment and reissue its opinion.

We disagree with Appellants, “Ordinarily, the act of filing a. notice of appeal confers jurisdiction on an appellate court and divests the trial court of jurisdiction over matters related to the appeal.” Gilda Indus., Inc. v. United States, 511 F.3d 1348, 1350 (Fed. Cir. 2008). Nevertheless, under Rule 60(a) of the Rules of the U.S. Court of Federal Claims, a court “may correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment, order, or other part of the record.” A court can make these corrections “on its own” and “without notice,” even after a party has appealed. See id, The only constraint is that, “after an appeal has been docketed in the appellate court and while it is pending, such a mistake may be corrected only with the appellate court’s leave.” Id.

Here, Appellants are technically correct that their September 28 notice of appeal divested the Claims Court of its jurisdiction. Nevertheless, the Claims Court still remained able to issue clerical corrections to its opinion, and it did not need to seek our permission to do so until this appeal was docketed, which did not happen until October 6. The only correction the reissued opinion made was substituting the current versions of § 6111 and § 6707 with their pre-2004 versions, and this substitution did not impact the Claims Court’s legal analysis. As such, the corrections were sufficiently separated from the Claims Court’s substantive analysis to be considered clerical error. Cf. Pfizer Inc. v. Uprichard, 422 F.3d 124, 130 (3d Cir. 2005) (“[T]he relevant test for the applicability of Rule 60(a) is whether the change affects substantive rights of the parties and is therefore beyond the scope of Rule 60(a) or is instead a clerical error, a copying or computational mistake, which is correctable under the Rule.” (quoting In re W. Tex. Mktg., 12 F.3d 497, 504 (5th Cir. 1994))); Vaughter v. E. Air Lines, Inc., 817 F.2d 685, 689 (11th Cir. 1987) (“As a general proposition, the district court may act under Rule 60(a) only to correct ‘mistakes or oversights that cause the judgment to fail to reflect what was intended at the time of the trial.’ Corrections or alterations that ‘affect the substantial rights of the parties, however, are beyond the scope of rule 60(a).’” (citations omitted)). As such, we have jurisdiction over this case, triggered by Appellants’ September 28 notice of appeal, and we will consider the Claims Court’s reissued opinion, which it properly corrected pursuant to Fed. R. Civ. P. 60(a).

II

We now turn to the Claims Court’s dismissal of Appellants’ refund suit under Rule 12(b)(1) of the Rules of the U.S. Court of Federal Claims. We review a decision by the Claims Court to dismiss a case for lack of subject matter jurisdiction de novo. Bianchi v. United States, 475 F.3d 1268, 1273 (Fed. Cir. 2007). Appellants bear the burden of establishing that the court has jurisdiction by a preponderance of evidence. Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011). “In determining jurisdiction, a court must accept as true all undisputed facts asserted in the plaintiffs complaint and draw all reasonable inferences in favor of the plaintiff.” Id.

The sole basis for Appellants’ appeal is that the Claims Court should have found that their § 6707 penalties were divisible, such that Appellants’ payments of the Dzi-edzic and Kotite portions would have satisfied the full payment rule and allowed the Claims Court to exercise jurisdiction (assuming no other jurisdictional barriers). Based on our review of the full payment rule and its divisibility exception, we disagree that the § 6707 penalties assessed against Appellants are divisible.

A

In general, a person can challenge a penalty assessed by the IRS in two ways: First, they can appeal to the IRS Appeals Office without paying the penalty. 26 C.F.R. §§ 601.106(b), 601.105(b), (c), (e). Second, they can pay the penalty, request a refund from the IRS, and, if unsuccessful, sue to recover a refund. 26 U.S.C. § 7422(a); 28 U.S.C. § 1346(a); Smith v. United States, 495 Fed.Appx. 44, 48 (Fed. Cir. 2012). Although the United States, as a sovereign, is generally immune from suit, 28 U.S.C. § 1346(a) provides the limited waiver of sovereign immunity for refund suits:

(a) The district courts shall have original jurisdiction, concurrent with the United States Court of Federal Claims, of:
(1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws_

The Tucker Act, which gives the Claims Court jurisdiction over suits for which the United States has waived its sovereign immunity, provides the Claims Court with jurisdiction for refund suits. 28 U.S.C. § 1491; Shore v. United States, 9 F.3d 1524, 1525 (Fed. Cir. 1993); Rocovich v. United States, 933 F.2d 991, 993 (Fed. Cir. 1991).

In Flora, the Supreme Court determined that § 1346(a)’s jurisdictional grant includes a “full payment requirement,” which demands—as a jurisdictional prerequisite—full payment of the tax or penalty before a party could sue for a refund. 362 U.S. at 177, 80 S.Ct. 630 (“[Section] 1346(a)(1), correctly construed, requires full payment of the assessment before an income tax refund suit can be maintained in a Federal District Court”). It did, however, recognize that in cases such as those involving excise taxes where the tax “may be divisible into a tax on each transaction or event,” satisfaction of “the full-payment rule would probably require no more than payment of a small amount.” Id. at 171 n.37, 176, 80 S.Ct. 630 n.38. This is because each excise tax is, legally, its own assessment (e.g., if a person is taxed $100 per widget for 5000 widgets, they receive 5000 different assessments), so paying the “small amount” that is the excise tax for one good would satisfy the full payment rule for that good. See id.

This observation forms the basis for what courts have recognized as the “divisibility exception” to Flora’s full payment rule. If an assessment or penalty is merely “the sum of several independent assessments triggered by separate transactions,” Korobkin v. United States, 988 F.2d 975, 976 (9th Cir. 1993), it is considered “divisible” such that “the taxpayer may pay the full amount on one transaction, sue for a refund for that transaction, and have the outcome of this suit determine his liability for all the other, similar transactions.” Cencast Servs., L.P. v. United States, 729 F.3d 1352, 1366 (Fed. Cir. 2013) (quoting Univ. of Chi. v. United States, 547 F.3d 773, 785 (7th Cir. 2008)). In practice, the government will generally counterclaim for the remainder of the tax due and both the paid assessment and the unpaid assessments will be litigated in one action. Univ. of Chi. 547 F.3d at 785; Ruth v. United States, 823 F.2d 1091, 1093 (7th Cir. 1987); Oral Argument at 12:22-47, available at http://oralarguments.cafc. uscourts.gov/default,aspx?fl=2016-1014,mp 3. If the government does not counterclaim, the challenger remains free to litigate the paid assessment as a test case.

Nevertheless, divisibility remains a “narrow exception,” Korobkin, 988 F.2d at 976, applied when an assessed tax or penalty is the aggregate of independent tax liabilities arising from different transactions. See, e.g., Cook v. United States, 32 Fed.Cl. 170, 172 (1994) (recognizing that excise tax on sales of diesel fuel and environmental tax on importation of petroleum products are divisible by sale), aff'd, 86 F.3d 1095 (Fed. Cir. 1996); Cencast Servs., 729 F.3d at 1357 (acknowledging that payroll taxes are divisible by employee). Where the liability is singular—even if the penalty base involves summing multiple figures—the assessment is not divisible. See, e.g., Rocovich, 933 F.2d at 995 (estate tax not divisible because “it arises from a single event”); Korobkin, 988 F.2d at 977 (pre-1990 § 6700 penalty for failure to register abusive tax shelter not divisible because it was “based on the aggregate of a person’s abusive tax shelter sales during the year” and not “assessed on each individual transaction”); Ardalan v. United States, 748 F.2d 1411, 1414 (10th Cir. 1984) (personal income tax not divisible).

B

In this case, Appellants contend that their § 6707 penalties are divisible because they were assessed against each of the 192 instances in which they implemented OPS or FDIS for an individual client. In effect, Appellants argue that this case involves 192 different tax shelters which § 6111 required them to register. In support of their position, Appellants emphasize that a separate Form 8264 (the form by which a tax shelter is registered, Temp. Treas. Reg. § 301.611-1T, A-l, A-47) would need to be filled out for each of the 192, as it is impossible to know all of the information that this form requires until OPS or FDIS is implemented for a particular client. Appellants also point out that the IRS computed the penalty amount—under the applicable portion of § 6707(a)(2), “1 percent of the aggregate amount invested in such tax shelter”—by computing the “aggregate amount invested” for each client implementation and summing. Accordingly, Appellants argue, § 6707 penalties should be divisible on this basis.

The government takes a different view. In its view, this case, involves not 192 tax shelters, but two: OPS and FDIS. The government argues that, with respect to each of these offerings, the § 6707 penalty is not divisible because liability is triggered by a single event: failure to register the tax shelter. The government emphasizes that, under the plain language of § 6111(a)(1) and Treasury Department regulations, tax shelters must be registered by the first day that interests in the shelter are offered for sale (e.g., in this case, OPS and FDIS had to be registered by the first day Appellants offered them to its clients), and failure to do so—regardless of how many sales are made with respect to that tax shelter—triggers the § 6707 penalty. The government also counters that neither aggregating transactions to calculate the penalty nor filing separate Forms ⅞264 makes the § 6707 penalty divisible, because the first is only a method of quantifying liability (but does not trigger liability itself) and- the second elevates form over substance.

We agree with the government. Section 6707(a) provides that “if a person ... fails to register such tax shelter ... such person shall pay a penalty with respect to such registration.” This language makes clear that liability for a § 6707 penalty arises from the single act of failing to register the tax shelter (which, under Temp. Treas. Reg. § 301.611-1T, A-l, A-47, is failing to file the necessary Form(s) 8264), This .omission creates a single source of liability, regardless of how many individuals or transactions are involved in the tax shelter. Liability cannot be subdivided beyond this.

This same principle holds for tax shelters—such as the ones at issue---that qualify as such because they are “substantial investments” under § 6111(c)(l)(B)(iii). Section 6111(c)(4) defines a “substantial investment” as an investment where “(A) the aggregate amount which may be offered for sale exceeds $250,000, and (B) there are expected to be 5 or more investors.” Although the “substantial investment” is the aggregation of several transactions that involve multiple people (individually or collectively), the statutory language makes clear that it is this- aggregation that qualifies as a single “tax shelter.” Section 6111(c)(1) states that “the term ‘tax shelter’ means any investment ... which is ... a substantial investment,” and § 6111(c)(4) states that “[a]n investment is a substantial investment if [it meets the. criteria quoted above].” Reading these provisions together, it is clear that “tax shelter” refers to the aggregate “substantial investment,” not the individual transactions that comprise it. Accordingly, it is the entire “substantial investment” that must be registered as a “tax shelter” under § 6111, and the point at which a tax shelter organizer fails to do this is when § 6707 liability arises.

Corresponding regulations accord with this understanding. Temp. Treas. Reg. § 301.611-1T, A-48, which governs the registration of “a tax shelter that is a substantial investment only by reason of an aggregation of multiple investments,” states that a separate Form 8264 may need to be filed for each individual investment in certain circumstances (specifically, when the investment varies with respect to: “(1) Principal asset, (2) Accounting methods, (3) Federal or state agencies with which the investment is registered or with which an exemption notice is filed, (4) Methods of financing the purchase of an interest in the investment, [and/or] (5) Tax shelter ratio”). However, it is clear that, even in that case, “[s]uch aggregated investments ... are part of a single tax shelter.” Id. Accordingly, the regulations contemplate that a “substantial investment” comprised of multiple “investments” still constitutes a single “tax shelter” that must be registered as one. Even if registration required filing multiple forms, registration is still a singular act. The only difference is the amount of paperwork necessary.

Accordingly, because, in either case, liability “arises from a single event”—the failure to register a tax shelter—§ 6707 penalties are not divisible into the individual transactions or investors that may comprise a single tax shelter. Rocovich, 933 F.2d at 996.

The only question that remains, then, is what qualified as a “tax shelter” in this case such that, when Appellants failed to register it, they incurred § 6707 liability. On this point, the parties differ substantially: Appellants contend that each of the 192 instances in which ‘they implemented OPS or FDIS for a given client is a “tax shelter,” whereas the government contends that OPS and FDIS are each a “tax shelter,” and the instances in which Appellants carried these out for various customers were simply “interests” in those shelters.

The language of the statute answers this question. Section 6111(c)(1) simply states that a “tax shelter” is “any investment,” with no other qualifiers as to the types of financial instruments that count as “investments.” Read in isolation, this language may be ambiguous: “investment” could refer to a plan or strategy that clients put money into (such as OPS or FDIS), an individual instance of that plan or strategy implemented for a particular client (such as the Dziedzic and Kotite transactions), or the actual money that was put into the plan (such as the $15,450 that Dziedzic invested with OPS or the $18,310 that Kotite invested with FDIS).

However, the context in which this term appears makes it clear that Congress intended “tax shelter” to refer to the first. Section 6111(a)(1) requires that “[a]ny tax shelter organizer shall register the tax shelter ... not later than the day on which the first offering for sale of interests in such tax shelter occurs.” If “tax shelter” was intended to refer to an individual implementation of a tax avoidance strategy instead of the tax avoidance strategy itself, it is hard to understand how one could register it “not later than the day on which the first offering for sale of interests.” § 6111(a)(1) (emphasis added). This is because there would be no period of time for which the “tax shelter” would be “offered” but not already sold—it would have come into existence when it was implemented for a specific client, but at that point it would have already been sold. In addition, interpreting “tax shelter” to mean only the individual implementation of a tax avoidance strategy would allow tax shelter organizers to freely market tax avoidance services—potentially for substantial periods of time—without having to disclose anything to the IRS until a first client purchases these services. Congress could not have intended such a result. Instead, a better interpretation for “tax shelter” is that it refers to the tax avoidance strategy itself, such that, when a tax shelter organizer first offers the strategy to clients (e.g., in this case, when Appellants first offered OPS or FDIS to clients), the duty to register the tax shelter under § 6111 triggers. Accordingly, we agree with the government that, in a case like this where a specific tax avoidance strategy was marketed and uniformly implemented for multiple customers, “tax shelter” is broad enough to cover the tax avoidance strategy itself.

For these reasons, OPS and FDIS each qualify as a single “tax shelter” within the meaning of § 6111 and § 6707. Accordingly, Appellants were required under § 6111 to register each of these strategies on the first day that they offered them for sale, and their failure to do so gave rise to their § 6707 penalties. Because each of the OPS and FDIS penalties “ar[ose] from a single event,” they are not divisible. Rocovich, 933 F.2d at 995.

C

In light of this reasoning, Appellants’ arguments to the contrary are not persuasive. Appellants contend that it would have been impossible to fill out a Form 8264 for all of OPS or all of FDIS on the first day they were offered for sale because many of the details that the form requires would be unknown. Instead, according to Appellants, they would have needed to file a new Form 8264 each time they implemented one of these strategies for a client, so each of these filings should be considered separate instances of tax shelter registration under § 6111. We disagree. The fact that Appellants may have needed to file multiple Forms 8264 to keep the government apprised of their tax shelter activities does not override the clear statutory directive on the source of § 6707 liability. Even though “[r]egistration is accomplished by filing a properly completed Form 8264 with the Internal Revenue Service,” Temp. Treas. Reg. § 301.611-1T, A-l, § 6707 is clear that what determines § 6707 liability is registration, hot the completion of a form. In many cases, there will be a 1:1 correspondence between the two such that a failure to file Form 8264 is a failure to register. However, in the case of “substantial investments” (such as OPS and FDIS) where multiple forms must be filed, filing multiple forms for multiple investments still effects a single registration for a single . tax shelter. Temp. Treas. Reg. § 301.611-1T, A-48 (“[s]uch aggregated investments, however, are part of a single tax shelter”). Accordingly, simply because the regulations require multiple forms does not mean that there are multiple sources of liability in these instances.

Appellants also argue that the § 6707 penalty is divisible because the penalty base was computed by summing the “aggregate amount invested” for each client implementation. This consideration is irrelevant. This process of aggregation simply calculates penalty amount—it does not create multiple liabilities under § 6707. Because the liability remains singular, the § 6707 penalty is not divisible.

We have carefully considered Appellants’ remaining arguments and find them unpersuasive. In sum, because Appellants’ § 6707 liability arises from their failure to register OPS and FDIS as tax shelters— two singular events—their § 6707 penalties are not divisible into the individual transactions or investors that participated in OPS or FDIS. Accordingly, Appellants failed to satisfy the full payment rule, precluding the Claims Court from exercising jurisdiction over their complaint.

Conclusion

For the foregoing reasons, we affirm the Claims Court’s dismissal for lack of subject matter jurisdiction.

AFFIRMED

      . This version of 26 U.S.C. § 6111 and the corresponding version of 26 U.S.C. § 6707, referenced below, were enacted on August 5, 1997 as part of the Taxpayer Relief Act of 1997, Pub.L. 105-34. They were repealed on October 22, 2004, when they were replaced with the American Jobs Creation Act of 2004, Pub.L. 108-357. Because the actions in question occurred before 2004, we will refer to the pre-2004 versions of § 6111 and § 6707,

        . The "aggregate amount invested” was calculated, generally speaking, by summing the amount that the client contributed to initiate the OPS or FDIS transactions and the fee it paid to Diversified. This methodology is not in dispute.

      . For taxes assessed by the IRS, a person also has the option of filing a petition with the United States Tax Court ("Tax Court”) without first paying the tax. See Flora, 362 U.S. at 163, 80 S.Ct. 630. The Tax Court, however, is a court of limited jurisdiction, see 26 U.S.C. § 7442, and Congress has generally declined to authorize jurisdiction over assessed penalties, such as the § 6707 penalties at issue here. See IRM 35.1.1.2 (listing statutory provisions under which the Tax Court has been granted jurisdiction, including 26 U.S.C. §§ 6015(e), 6110(f)(3), 6211-16, 6226, 6228, 6247, 6252, 6320, 6330, 7481(c), 6404(i), 7430(f)(2), 6512(b)(2), 6166, 6863(b)(3)(C), 7429(b)(2)(B)); see also Smith v. Comm'r, 133 T.C. 424, 430 (2009) (noting that “this Court has never exercised jurisdiction over an assessable penalty that was not related to a deficiency, even absent Congress’ explicitly circumscribing our jurisdiction” and finding that the Tax Court did not have jurisdiction over penalties assessed under 26 U.S.C. § 6707A).

      . We have also stated that "[a] divisible tax ... is one that represents the aggregate of taxes due on multiple transactions (e.g., sales of items subject to excise taxes).” Rocovich, 933 F.2d at 995.

      . At oral argument, Appellants posited that, in this scenario, issue preclusion may be available as a way to expediently dispose of the remaining assessments. Oral Argument at 12:51-13:58. Of course, in this scenario, the full payment rule would still require that the challenger pay before they could challenge these assessments in subsequent refund suit(s). We provide no opinion on this approach generally, or whether issue preclusion would be available to Appellants in this case.

      . The attachments to the NOPAs list 193 total client entries. However, one client is unnumbered and tvfo entries that are numbered do not list corresponding clients, so the correct total is 192. Neither party appears to dispute this point.

      . As discussed above, under Temp. Treas. Reg. § 301.611—IT, A-48, a separate Form 8264 may need to be filed for each individual investment in a tax shelter that qualifies as a "substantial investment” "only by reason of an1 aggregation of multiple investments” when the investment varies with respect to: "(1) Principal asset, (2) Accounting methods, (3) Federal or state agencies with which the investment is registered or with which.an exemption notice is filed, (4) Methods of financing the purchase of an interest in the investment, [and/or] (5) Tax shelter ratio.”


author: STOLL, Circuit Judge.

text:
    CHRISTIAN FAITH FELLOWSHIP CHURCH, Appellant v. ADIDAS AG, Appellee
    2016-1296
    United States Court of Appeals, Federal Circuit.
    Decided: November 14, 2016

      Richard W. Young, Quarles & Brady, LLP, Chicago, IL, argued for appellant. Also represented by E. King Poor.
    John Zaocaria, Notaro, Michalos & Zac-earía P.C., Orangeburg, NY, argued for appellee. Also represented by Bradley S. Corsello, Angelo Notaro.
    Before REYNA, HUGHES, and STOLL, Circuit Judges.
   STOLL, Circuit Judge.

Christian Faith Fellowship Church appeals a final judgment of the Trademark Trial and Appeal Board that, in response to a petition filed by adidas AG, cancelled its trademarks for failing to use the marks in commerce before registering them. The Board held that the Church’s documented sale of two marked hats to an out-of-state resident were de minimis and therefore did not constitute use of the marks in commerce under the Lanham Act. Because the Lanham Act defines commerce as all activity regulable by Congress, ;and because the Church’s sale to an. out-of-state resident fell within Congress s power to regulate under the Commerce Clause, we reverse the Board’s cancellation of the Church’s marks on this basis and remand for further proceedings.

BackgRound

⅜—I

Christian Faith Fellowship Church is located in Zion, Illinois, within five miles of the Ulinois-Wisconsin border. Being located so close to the border, the Church’s parishioners include both Illinois and Wisconsin residents. In January 2005, the Church began selling apparel, both caps and shirts, emblazoned with the phrase “ADD A ZERO.” The Church sold the “ADD A ZERO”-marked apparel as part of a fundraising campaign to pay off the debt on its church facility and the associated 40-acre tract of land. Illinois-based Icon Industries supplied the Church with the “ADD A ZERO”-marked apparel, which the Church sold in its bookstore.

The Church sought a federal trademark for the “ADD A ZERO” mark at the U.S, Patent and Trademark Office in March 2005. The Church filed two clothing-based trademark applications, one for use of “ADD A ZERO” in standard characters and another for a stylized design of the phrase. The Church’s applications relied on actual use of the marks in commerce, not intent to use the marks in commerce. The Office granted the Church’s applications and registered the marks as U.S. Registration Nos. 3,173,207 and 3,173,208.

II.

In 2009, adidas AG (“Adidas”) sought a clothing trademark for the phrase “AD-IZERO, but the Office refused the application for likelihood of confusion with the Church’s “ADD A ZERO” marks. Adidas brought an action before the Trademark Trial and Appeal Board to cancel the Church’s marks, arguing several grounds for cancellation: (1) the Church’s failure to use the marks in commerce before registration; (2) the marks’ failure to function as trademarks; and (3) the Church’s abandonment of the marks for nonuse. The Board agreed with Adidas’s failure-to-use argument and cancelled the Church’s marks, without addressing Adidas’s alternate cancellation grounds. The Board considered the Church’s proffered evidence— over Adidas’s hearsay and authentication objections—of a cancelled check for the sale of two “ADD A ZERO”-marked hats for $38.34 in February 2005, before the Church applied for its marks. The Church had kept the check in its records and cross-referenced it with a sales register it maintained for its bookstore. The check’s drawer was Charlotte Howard, who had a Wisconsin home address pre-printed on her check.

The Board disagreed with the Church that the sale to Ms. Howard evidenced the requisite “use in commerce” under the Lanham Act. The Board concluded:

[T]he sale of two ADD A ZERO caps at a minimal cost within the state of Illinois to Ms. Howard, who resides outside the state, does not affect commerce that Congress can regulate such that the transaction would constitute use in commerce for purposes of registration.
... This sale is de minimis and, under the circumstances shown here, is insufficient to show use that affects interstate commerce.

adidas AG v. Christian Faith Fellowship Church, Cancellation No. 92053B14, 2015 WL 5882313, at *7 (T.T.A.B. Sept. 14, 2015) (.Board Op.) (footnote omitted).

The Church appeals, and we have jurisdiction under 28 U.S.C. § 1295(a)(4)(B).

Discussion

The Lanham Act provides that “[t]he owner of a trademark used in commerce may request registration of its trademark.” 15 U.S.C. § 1051(a)(1) (emphasis added). Section 1051(a)’s “use in commerce” requirement distinguishes it from § 1051(b), which offers protection for “[a] person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce.” Id. § 1051(b). The Lanham Act explains the “use in commerce” requirement as it relates to goods: .

The term “use in commerce” means the bona fide use of a mark in • the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce—
(1) on goods when—
(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and
(B) the goods are sold or transported in commerce....

Id. § 1127 (emphases added). Further, the Lanham Act defines “commerce” as “all commerce which may lawfully be regulated by Congress.” Id. Thus, to register a mark under § 1051(a), one must sell or transport goods bearing the mark such that the sale or transport would be subject to Congress’s power under the Commerce Clause, which includes its power to regulate interstate commerce. Larry Harmon Pictures Corp. v. Williams Rest Corp., 929 F.2d 662, 664 (Fed. Cir. 1991) (citing U.S. Const., art. I, § 8); see also In re Silenus Wines, Inc., 557 F.2d 806, 808-12 (CCPA 1977).

The dispute between the parties in this case is limited to whether the Church, which filed its applications under § 1051(a)’s “use in commerce” subsection, made a sale of marked goods in commerce regulable by Congress before applying for its marks.

I.

As a threshold matter, we address whether the Board erred in admitting Ms. Howard’s check into evidence and in finding that Ms. Howard resided in Wisconsin. Adidas argues that the Board should not have admitted the check because Ms. Howard’s pre-printed address on the check constitutes inadmissible hearsay and because the check was not authenticated. We review the Board’s admission of the cheek for abuse of discretion. Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356, 1363 (Fed. Cir. 2012) (citing Crash Dummy Movie, LLC v. Mattel, Inc., 601 F.3d 1387, 1390 (Fed. Cir. 2010)). “We will reverse only if the Board’s evidentiary ruling was: (1) ‘clearly unreasonable, arbitrary, or fanciful’; (2) ‘based on an erroneous conclusion!;] of law; (3) premised on ‘clearly erroneous findings of fact’; or (4) the record ‘contains no evidence on which the Board could rationally base its decision.’ ” Id. (quoting Crash Dummy Movie, 601 F.3d at 1390-91).

No party disputes that Ms. Howard’s pre-printed address on the check is a hearsay statement, which is typically not admissible into evidence. The Federal Rules of Evidence provide, however, an exception to the bar on hearsay evidence for business records of regularly conducted conduct kept in the ordinary course. Fed. R. Evid. 803(6). The Board relied on this exception in admitting Ms. Howard’s check. A Church pastor, whose duties included Church recordkeeping, testified that the check was maintained in the Church’s records in the normal course of Church bookstore sales, along with the corroborating entry in the bookstore ledger of sales. Adidas argues that the pre-printed address on the check had nothing to do with Church business, and therefore, the check should not have been admissible under the business records exception. We disagree.

The business records exception “does not require that the document actually be prepared by the business entity proffering the document.” Air Land Forwarders, Inc. v. United States, 172 F.3d 1338, 1343 (Fed. Cir. 1999). When a business relies on a document it has not itself prepared, two factors bear on the admissibility of the evidence as a business record: “[1] that the incorporating business rely upon the accuracy of the document incorporated[;3 and [2] that there are other circumstances indicating the trustworthiness of the document.” Id. We hold that the Board did not abuse its discretion in determining that the Church relied on the check, a bank-issued negotiable instrument, as accurate and trustworthy. We also hold that the check is self-authenticating as commercial paper under Federal Rule of Evidence 902(9). See United States v. Pang, 362 F.3d 1187, 1192 (9th Cir. 2004) (“[A] check is a species of commercial paper, and therefore self-authenticating” (citing Fed. R. Evid. 902(9))).

Based on the admitted check and a Church pastor’s testimony that many Church parishioners reside in Wisconsin, the Board found that Ms. Howard resided in Wisconsin. Adidas argues this factual conclusion was unsupported. We review the Board’s factual determinations under a substantial evidence standard. In re Chippendales USA, Inc., 622 F.3d 1346, 1350 (Fed. Cir. 2010) (citing In re Pacer Tech., 338 F.3d 1348, 1349 (Fed. Cir. 2003); 5 U.S.C. § 706(2)(E)). We conclude that the admitted check and the Church pastor’s testimony constitute substantial evidence to support the Board’s determination regarding Ms. Howard’s residence.

II.

Having resolved that the Board properly admitted the Church’s evidence of an intrastate sale to an out-of-state resident, we now consider whether such a sale is regulable by Congress, satisfying the Lanham Act § 1051(a) “use in commerce” requirement. We review de novo the Board’s legal conclusions, including “its interpretations of the Lanham Act and the legal tests it applies in measuring registra-bility.” In re Viterra Inc., 671 F.3d 1358, 1361 (Fed. Cir. 2012) (quoting In re Save Venice N.Y., Inc., 259 F.3d 1346, 1351-52 (Fed. Cir. 2001)); cf. Taylor v. United States, — U.S.-, 136 S.Ct. 2074, 2080, 195 L.Ed.2d 456 (2016) (holding the meaning of “commerce” element in a different federal statute, the Hobbs Act, to be a question of law).

A.

Congress’s power under the Commerce Clause is broad. Larry Harmon, 929 F.2d at 664 (citing Silenus Wines, 557 F.2d at 809-10). The Supreme Court’s contemporary Commerce Clause decisions illustrate Congress’s legislative abilities under this enumerated power. Beginning in the modern era with Wickard v. Filburn, the Supreme .Court has interpreted the Commerce Clause as vesting in Congress the power to regulate activities that have a substantial effect.on interstate commerce, explaining:

[E]ven if ... activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce and this irrespective of whether such effect is what might at some earlier time have been defined as “direct” or “indirect.”

317 U.S. 111, 125, 63 S.Ct. 82, 87 L.Ed. 122 (1942). In Wickard, a farmer grew wheat for commercial sale, but also for personal and farm use. Id. at 114, 63 S.Ct. 82. Congress passed a statute imposing quotas on the amount of wheat that farmers could harvest, with penalties assessed for harvesting wheat in excess of the quota level, even if the wheat was for personal use and not for sale. Id. at 114-15, 119, 63 S.Ct. 82. The farmer challenged the statute’s application to him as exceeding Congress’s Commerce Clause powers, claiming his wheat harvesting was local in nature and had, at most, only an indirect effect on interstate commerce. Id. at 119, 63 S.Ct. 82. The Court disagreed with the farmer’s arguments, holding that the activity must be viewed not in isolation, but in the aggregate: “That [the farmer’s] own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the scope of federal regulation where, as here, his contribution, taken.together with that of many others similarly situated, is far from trivial.” Id. at 127-28, 63 S.Ct. 82.

The Supreme Court reaffirmed Wick-ard’& “substantial effects” doctrine in Gonzales v. Raich, in which one of the parties grew marijuana on her property for personal, medicinal - use and did not sell or transport the drug. 545 U.S. 1, 6-8, 125 S.Ct. 2195, 162 L.Ed.2d 1 (2005). She argued that her local and de minimis cultivation and possession of marijuana should not be subject to federal drug laws passed under the Commerce Clause. Id. at 15, 125 S.Ct. 2195. The Supreme Court framed her argument as a request to “excise individual applications of a concededly valid statutory scheme/’ Id. at 23, 125 S.Ct. 2195, But the Supreme Court held the statute’s application to individuals was a valid exercise of Congress’s powers under the Commerce Clause, indicating that its “case law firmly establishes Congress’s power to regulate purely local activities that are part of an economic ‘class of activities’ that have a substantial effect on interstate commerce.” Id. at 17, 125 S.Ct. 2195 (citing Perez v. United States, 402 U.S. 146, 151, 91 S.Ct. 1357, 28 L.Ed.2d 686 (1971); Wickard, 317 U.S. at 128-29, 63 S.Ct. 82). The Court did not believe that the case turned on the intrastate nature of the marijuana cultivation and possession at issue, explaining “[t]hat the regulation ensnares some purely intrastate activity is of no moment.” Id. at 22, 125 S.Ct. 2195. The Court “refuse[d] to excise individual components of th[e] larger scheme,” id. because, “where the class of activities is regulated and that class is within the reach of federal power, the courts have no power ‘to excise, as trivial, individual instances’ of the class,” id. at 23, 125 S.Ct. 2195 (quoting Perez, 402 U.S. at 154, 91 S.Ct. 1357 (alteration omitted)). Thus, the Court held that when “a general regulatory statute bears a substantial relation to commerce, the de minimis character of individual instances arising under that statute is of no consequence” and Congress has the power to regulate it under the Commerce Clause. Id. at 17, 125 S.Ct. 2195 (quoting United States v. Lopez, 514 U.S. 549, 558, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995)).

The Supreme Court most recently addressed the Commerce Clause’s “substantial effects” doctrine in Taylor, which involved a man federally convicted of robbery under a provision of the Hobbs Act for his participation in two home invasions involving marijuana dealers. 136 S.Ct. at 2077-78 (citing 18 U.S.C. § 1951(a)). The Hobbs Act criminalizes robberies and attempted robberies that affect any commerce “over which the United States has jurisdiction.” Id. at 2077 (quoting 18 U.S.C. § 1951(b)(3)). Citing Raich, the Court held that Congress legislated within its Commerce Clause powers when enacting the provision at issue. Id. at 2077-78, 2080. As applied, the Court reiterated that, under the aggregation approach to the substantial effects test, “proof that the defendant’s conduct in and of itself affected or threatened commerce is not needed.” Id. at 2081. Rather, the Court instructed that “[a]ll that is needed is proof that the defendant’s conduct fell within a category of conduct that, in the aggregate, had the requisite effect” on commerce. Id. The Court emphasized that, in the case before it, “the Government need not show' that the drugs that a defendant stole or attempted to steal either traveled or were destined for transport across state lines.... And it makes no difference under our cases that any actual or threatened effect on commerce in a particular case is minimal.” Id. (citing Perez, 402 U.S. at 154, 91 S.Ct. 1357).

B.

Our past Lanham Act “use in • commerce” cases equally reflect the broad scope of Congress’s Commerce Clause powers. For example, in Larry Harmon, the appellant argued that the Lanham Act’s “use in commerce” requirement could not “be satisfied by a single-location restaurant ... that serves only a minimal number of interstate travelers.” 929 F.2d at 663. The appellant did not dispute “that there ha[d] been some use in commerce of [registrants mark,” and indeed, the record established that the “mark ha[d] been used in connection with services rendered to customers traveling across state boundaries.” Id. at 666. Yet, the appellant petitioned this court to adopt a standard relating to the percentage of services furnished to interstate travelers to determine whether a mark had been used in commerce under the Lanham Act. Id. We refused to do so. Recognizing that “[t]he Lanham Act by its terms extends to all commerce which Congress may regulate,” id. and that “Congress has broad powers under the commerce clause,” id. at 664, we “rejected] [appellant’s argument that a certain increased threshold level of interstate activity is required before registration of the mark used by a single-location restaurant may be granted,” id. at 666. Likewise, our predecessor court explained in Silenus Wines that because Congress passed the Lanham Act in the wake of Wickard and because the Act expansively defines commerce as “all commerce which may lawfully be regulated by Congress,” it “clearly involves a broadening of jurisdiction” from earlier federal trademark statutes. 557 F.2d at 809-10. The court held that, under this broad jurisdiction, the intrastate sale of imported French wine constitutes “use in commerce” under the Act. Id. at 809.

C.

Moving to the facts of this case, it is clear in light of the foregoing precedent that the Church’s sale of two “ADD A ZERO”-marked hats to an out-of-state resident is regulable by Congress under the Commerce Clause and, therefore, constitutes “use in commerce” under the Lan-ham Act. We reach this conclusion without defining the outer contours of Congress’s Commerce Clause powers because the transaction at issue falls comfortably within the bounds of those powers already sketched for us by the Supreme Court. The Lanham Act is a comprehensive scheme for regulating economic activity— namely the marking of commercial goods—and the “use in commerce” preregistration requirement is an “essential part” of the Act. Lopez, 514 U.S. at 561, 115 S.Ct. 1624. Further, it cannot be doubted that the transaction at issue—the private sale of goods, particularly apparel, to an out-of-state resident—is “quintessentially economic.” Raich, 545 U.S. at 25, 125 S.Ct. 2195; see United States v. Morrison, 529 U.S. 598, 611, 120 S.Ct. 1740, 146 L.Ed.2d 658 (2000) (“[I]n those cases where we have sustained federal regulation of intrastate activity based upon the activity’s substantial effects on interstate commerce, the activity in .question has been some sort of economic endeavor.”). This transaction, taken in the aggregate, would cause a substantial effect on interstate commerce and thus it falls under Congress’s Commerce Clause powers. Taylor, 136 S.Ct. at 2080-81; Raich, 545 U.S. at 17, 125 S.Ct. 2195; Wickard, 317 U.S. at 125, 63 S.Ct. 82. The Church did not need to present evidence of an actual and specific effect that its sale of hats to an out-of-state resident had on interstate commerce. Nor did it need to make a particularized showing that the hats themselves were destined to travel out of state. See Taylor, 136 S.Ct. at 2081.

The Board’s rationale that the sale to Ms. Howard was “de minimis” and thus “insufficient to show use that affects interstate commerce” is squarely at odds with the Wickard progeny of Commerce Clause cases. Board Op. at *7. In particular, the Board’s reasoning contravenes Raich, which expressed that “the de min-imis character of individual instances” arising under a valid statute enacted under the Commerce Clause “is of no consequence.” 545 U.S. at 17, 125 S.Ct. 2195. “[I]t makes no difference under, our cases that any actual or threatened effect on commerce in a particular case is minimal.” Taylor, 136 S.Ct. at 2081 (citing Perez, 402 U.S. at. 154, 91 S.Ct. 1357); see also Larry Harmon, 929 F.2d at 666. Adidas’s argument that the Church must present actual proof that its sale to Ms. Howard directly affected commerce also contradicts precedent. “[PJroof that the defendant’s conduct in and of itself affected or threatened commerce is not needed. All that is needed is proof that the defendant’s conduct fell within a category of conduct that, in the aggregate, had the requisite effect.” Taylor, 136 S.Ct. at 2081.

Adidas would like us to cabin Raich and Taylor to their particular facts, namely to cases involving the market for illegal drugs. But the Supreme Court’s elucidation of the Constitutional reach of the Commerce Clause in those cases applies to more than just federal drug regulation. Raich and Taylor apply, and indeed rest on, principles derived from Wickard, which involved the national market for wheat, not illegal drugs. And Taylor is particularly applicable because, similar to the present ease, it involves the construction of a statutory provision that defines “commerce” as including “all .,. commerce over which the United States has jurisdiction,” 18 U.S.C. § 1951(b)(3). Moreover, there is nothing in these cases themselves to limit the Constitutional precepts and legal tests discussed therein to their facts. The Supreme Court has advised that, as a court of appeals, we must not “confus[e] the factual contours of [a Supreme Court decision] for its unmistakable holding” in an effort to reach a “novel interpretation” of that decision. Thurston Motor Lines, Inc. v. Jordan K Rand, Ltd., 460 U.S. 533, 534-35, 103 S.Ct. 1343, 75 L.Ed.2d 260 (1983) (per curiam); see also Rivers v. Roadway Express, Inc., 511 U.S. 298, 312, 114 S.Ct. 1510, 128 L.Ed.2d 274 (1994) (“[0]nce the Court has spoken, it is the duty of other courts to respect that understanding of the governing rule of law.”); Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1347 (Fed. Cir. 2010) (en banc) ("As a subordinate federal court, we may not so easily dismiss [the Supreme Court’s] statements as dicta but are bound to follow them.”). We find that the principles discussed in Raich and Taylor apply here regardless of the factual differences at play.

D.

Finally, we note that the Board erred by not properly applying our holdings in Larry Harmon and Silemts Wines, which bear on the Lanham Act’s “use in commerce” requirement specifically rather than on the Commerce Clause in the abstract. Had it done so, it would not have concluded that a sale it characterized as de minimis was therefore insufficient to satisfy the “use in commerce” requirement.

In Larry Harmon, we refused to adopt a de minimis test for the “use in commerce” requirement. 929 F.2d at 666. We further held that the Lanham Act by its terms extends to all commerce which Congress may regulate. Id. Although Larry Harmon involved a service mark and the marks here are for goods, the “in commerce” requirement is the same regardless of the type of mark and thus Larry Harmon applies to this case. True enough, § 1127 provides distinct tests for the type of use that must occur for goods versus services to satisfy the “use in commerce” requirement. For example, the statute requires that marked goods be “sold or transported” in commerce, while service marks must be “used or displayed in the sale or advertising of services and the services [must be] rendered” in commerce. But this distinction goes to the meaning of “use” in the “use in commerce” requirement, not to whether a use is “in commerce,” which we analyze under the same rubric regardless of the delineation between goods and services.

Our predecessor court made this very point in Silenus Wines, 557 F.2d 806. In that case, the court rejected the argument that an earlier decision, In re Gastown, Inc., 326 F.2d 780 (CGPA 1964), was limited to service marks. Silenus Wines, 557 F.2d at 808. Gastoum held that an applicant’s operation of marked auto service stations on an interstate highway satisfied the “use in commerce” requirement. Gastown, 326 F.2d at 784. Silenus Wines explained that “Gastoum’s rationale is not limited to services” because its “result depended on the Trademark Act definition of ‘commerce’ ” rather than on the Act’s prescribed uses for service marks. Silenus Wines, 557 F.2d at 808.

The Board also erred to the extent it relied on In re Cook, United, Inc., 188 U.S.P.Q. 284 (T.T.A.B. 1975), and In re The Bagel Factory, Inc., 183 U.S.P.Q. 553 (T.T.A.B. 1974), for the proposition that an intrastate sale of goods can never be a sale “in commerce” without the trademark applicant doing something more, such as knowingly directing the movement of goods across state lines. Cook, 188 U.S.P.Q. at 287-88; Bagel Factory, 183 U.S.P.Q. at 554-55. These Board cases have been the source of confusion in our “use in commerce” doctrine. Doubt has been cast on the vitality of the Bagel Factory holding, with commentators noting that “under the modern interpretations of the Commerce Clause ... it would appear that a sale or delivery does not have to cross a state line in order to affect ‘commerce.’” 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competítion § 19:123 (4th ed.) (footnote omitted). Others have similarly explained that, in Cook, “the PTO was operating under a different standard” than the one provided in the Supreme Court’s Commerce Clause precedent and have concluded that, especially after Larry Harmon, “not only is the PTO’s perspective [as stated in Cook] no longer appropriate nor correct, it is no longer the law.” Peter C. Christensen & Teresa C. Tucker, The “Use in Commerce" Requirement for Trademark Registration After Larry Harmon Pictures, 32 IDEA 327, 332, 341 (1992).

To the extent Cook and Bagel Factory assert that the Lanham Act requires commercial activity, whether for goods or services, beyond that which is sufficient for Congress to regulate commercial activity under the Commerce.Clause, they are incorrect. It is beyond dispute that “the definition of commerce in the Lanham Act means exactly what the statute says, i.e. ‘all commerce which may lawfully be regulated by Congress.’ ” Larry Harmon, 929 F.2d at 666 (quoting 15 U.S.C. § 1127); see also Gastown, 326 F.2d at 784 (quoting Bulova Watch Co. v. Steele, 194 F.2d 567, 571 (5th Cir.), aff'd, 344 U.S. 280, 73 S.Ct. 252, 97 L,Ed. 319 (1952)); cf. Taylor, 136 S.Ct. at 2079 (construing provision of Hobbs Act—which defines “commerce” as including “all ... commerce over which the United States has jurisdiction,” 18 U.S.C. § 1951(b)(3)—as extending to full reach of Congress’s Commerce Clause powers). Because one need not direct goods across state lines for Congress to regulate the activity under the Commerce Clause, there is likewise no such per se condition for satisfying the Lanham Act’s “use in commerce” requirement. See Raich, 545 U.S. at 22, 125 S.Ct. 2195 (“That the regulation [passed under the Commerce Clause] ensnares some purely intrastate activity is of no moment,”); Wickard, 317 U.S.- at 125, 63 S.Ct. 82 (“[Ejven if ... activity be local ... it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce....”). In so holding, we comport with our own precedent, which disavows the bright line approach taken in Cook and Bagel Factory. See Larry Harmon, 929 F.2d at 666 (“It is not required that such services be rendered in more than one state to satisfy the use in commerce requirement.” (citing Gastown, 326 F.2d at 782-84)); Silenus Wines, 557 F.2d at 810-811 (“[The PTO] stated that ‘commerce’ did not cover intrastate transactions regardless of affect on interstate and foreign commerce.... We reject the PTO position.”).

Conolusion

For the foregoing reasons, we reverse the Board’s cancellation of the Church’s “ADD A ZERO” marks for not using them in commerce before federally registering them and remand for the Board to address Adidas’s other cancellation grounds.

REVERSED AND REMANDED

Costs

Costs to Appellant.

      . The Church also presented evidence to the Board that it began offering the "ADD A ZERO”-marked apparel for sale on its website in 2010. Like the Board, we do not consider this evidence because it concerns activity after the critical trademark registration date of March 2005. See Couture v. Playdom, Inc., 778 F.3d 1379, 1381 (Fed. Cir.), cert. denied, — U.S.-, 136 S.Ct. 88, 193 L.Ed.2d 35 (2015) ("Use in commerce must be 'as of the application filing date.' ” (quoting 37 C.F.R. § 2.34(a)( 1 )(i))).