In a rare review of a Trademark Trial and Appeal Board (TTAB) case, the Court of Appeals for the Federal Circuit vacated and remanded the decision in Royal Crown Co., Inc. v. The Coca-Cola Co.,[1] involving the doctrine of trademark genericism. The Fed Circuit panel found fault with the TTAB’s analysis of the test for generic marks, and also found the TTAB erred in its finding of descriptiveness in its conclusion that the ZERO mark had acquired distinctiveness.
The facts are as follows.
Coca-Cola’s term ZERO had been used on a variety of its soft drink products, including, inter alia, SPRITE ZERO, COCA-COLA ZERO, COKE ZERO ENERGY, and VAULT ZERO. Opposer Royal Crown, owner of the DR PEPPER® and SEVENUP® marks, and a competitor of Coca-Cola, filed several oppositions to various published trademark applications. There were a total of 17 cases.[2] Royal Crown primarily argued that ZERO was a generic term for Coca-Cola’s soft drinks and sports drinks goods. Secondarily, Royal Crown argued that ZERO was merely descriptive of Coca-Cola’s soft drinks and sports drinks goods. Royal Crown further requested that Coca-Cola disclaim usage of the term ZERO. A disclaimer is a statement that the trademark applicant does not claim exclusive rights to that element of the mark. [3] Coca-Cola asserted that ZERO had acquired distinctiveness under 15 U.S.C. §2(f) of the Lanham Act, and refused to disclaim.
The TTAB determined that the genus of goods involved is soft drinks, including the subset of soft drinks that contain minimal or no calories. Additionally, the TTAB determined that the general public did not understand ZERO to refer to the context of soft drinks, and in particular, those soft drinks with minimal or no calories. The TTAB finally determined ZERO had acquired distinctiveness, but did not address the descriptiveness of the term. TTAB also did not credit Coca-Cola’s concession that ZERO was merely descriptive against a finding of acquired distinctiveness.
The panel was composed of Judges Newman, O’Malley, and Taranto, with Judge O’Malley writing for the court. The test for whether a mark is generic is a two-step inquiry. First, the mark’s genus of goods or services must be determined. Second, the mark must be understood by the general public to refer to that genus of goods or services.[4]
Judge O’Malley noted:
The only relief Royal Crown seeks in its oppositions to [Coca-Cola’s] applications is that [Coca-Cola] be required to disclaim the term ZERO. Royal Crown does not argue that, if [Coca-Cola] disclaims ZERO, the marks should not be allowed. The USPTO may condition registration of a larger mark on the applicant’s disclaimer of an “unregistrable component of a mark otherwise registrable.”[5]
She also noted that Coca-Cola conceded during the trial that ZERO was not inherently distinctive in association with the genus of particular goods at issue – soft drinks and sports drinks. This is indicative, therefore, of ZERO’s descriptiveness. Here, the TTAB erred in analyzing the genericness framework. Specifically, a “term can be generic for a genus of goods or services if the relevant public . . . understands the term to refer to a key aspect of that genus.”[6] Explained another way, the test requires determining whether the public would use a term to describe a genus, and understand that term to be generic. The general public could understand ZERO, as used in conjunction with soft drinks, can be determined as a specific characteristic of a particular soft drink (here, zero calories), the term ZERO can be construed as generic. The TTAB had failed to consider that the public would consider ZERO as a subcategory of soft drinks – a subcategory of minimal or no calorie-soft drinks. Therefore, the TTAB must analyze this aspect of the genericness framework before determining if registration is possible.
As to the descriptiveness issue, Judge O’Malley noted that even if ZERO was not generic, it could still not be registered on the Principal Register if its descriptiveness does not show it has the necessary level of acquired distinctiveness.
We have long held that “the applicant’s burden of showing acquired distinctiveness increases with the level of descriptiveness; a more descriptive term requires more evidence of secondary meaning.”[7]
She found the TTAB’s analysis of the term ZERO’s level of descriptiveness to be highly deficient, and believed the TTAB should conduct a discussion “through an exacting lens.”
In doing so, the Fed Circuit panel vacated and remanded for further determination the issues of genericness and acquired distinctiveness back to the TTAB. Given the players and amount of commercial and marketing resources already employed, expect this case to be appealed by either party back to the Fed Circuit upon a second ruling by the TTAB.
[1] ___F.3d___ (Fed. Cir. 2018) (slip op.), vacating and remanding, Opp. No. 91178927 (Parent Case), 2016 TTAB LEXIS 234 (T.T.A.B. May 23, 2016).
[2] See Opp. Nos. 91180771 (SPRITE ZERO), 91178927 (COCA-COLA ZERO), 91186579 (FANTA ZERO, VANILLA COCA-COLA ZERO), POWERADE ZERO), 91180772 (COKE ZERO), 91190658 (VAULT ZERO), 91183482 (PIBB ZERO, COKE CHERRY ZERO, CHERRY COCA-COLA ZERO, COCA-COLA VANILLA ZERO, CHERRY COKE ZERO, COCA-COLA CHERRY ZERO), and 91185755 (COKE ZERO ENERGY, COKE ZERO BOLD, VANILLA COKE ZERO).
[4] See Royal Crown, supra (slip op. at 10). See also H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., 782 F.2d 987, 989 (Fed. Cir. 1986).
[5] Id. (slip op. at 7-8). See also In re Stereotaxis, Inc., 429 F.3d 1039, 1041 (Fed. Cir. 2005).
[6] Id. (slip op. 12), citing In re Cordua Rests., Inc., 823 F.3d 594, 603 (Fed. Cir. 2016).
[7] Id. (slip op. at 14), citing In re Boston Beer Co., 198 F.3d 1370, 1373 (Fed. Cir. 1999) (“the greater the degree of descriptiveness the term has, the heavier the burden to prove it has attained secondary meaning”); In re La. Fish Fry Prods., Ltd., 797 F.3d 1332, 1335 (Fed. Cir. 2015) (finding FISH FRY PRODUCTS did not have acquired distinctiveness, in part, because the term was highly descriptive).