Monday, February 27, 2012

Precedential No. 7: On Remand from District Court, TTAB Sustains Section 2(e)(3) Opposition to GUANTANAMERA for Cigars

In February 2008, the Board sustained this opposition to registration of the mark GUANTANAMERA for cigars, finding the mark to be primarily geographically deceptively misdescriptive under Section 2(e)(3). [TTABlogged here]. In August 2010, the U.S. District Court for the District of Columbia reviewed the Board's decision and reversed and remanded [here], ruling that the Board had "erred as a matter of law in applying the materiality requirement" of Section 2(e)(3) of the Trademark Act. The Board has now sustained the opposition again, finding that "a significant portion of consumers of cigars would be materially influenced by the geographic meaning of applicant's mark." Corporacion Habanos, S.A. v. Guantanamera Cigars Company, 102 USPQ2d 1085 (TTAB 2012) [precedential].

The district court found that "Guantanamera" means "girl from Guantanamo," that the primary significance of GUANTANAMERA is geographic, that the consuming public is likely to believe that Applicant's cigars originate from Cuba, and that cigar tobacco is produced in the Guantanamo province. However the court ruled that the Board had failed to address the third element of the California Innovations test: the materiality of the geographic representation inherent in the mark.

The court concluded that our decision did not address whether a significant portion of relevant consumers would be materially influenced in their purchasing decisions; and "[t]o establish a prima facie case, the TTAB or the opposition must show that 'a significant portion of the relevant consumers would be materially influenced in the decision to purchase the product or service by the geographic meaning of the mark.'" [The court relied on the CAFC's In re Spirits decision, decided after the Board had ruled in this case.]

The Board reopened the proceeding so that the parties could address that one issue. The parties submitted more than three thousand pages of additional evidence (much to the Board's dismay).

Applicant's Expert and His Report: Opposer objected to Applicant's expert witness report, asserting that it was not competent expert testimony under FRE Rule 702 and Daubert. After reviewing the applicable law, the Board ruled that the witness was qualified, based on his experience, as an expert in the advertising and selling of "Cuban cigar brands, i.e., cigar brands with Cuban names or words or references to Cuba, in the United States." He owned two cigar stores for many years, interacted with sellers and buyers, regularly reviewed cigar magazines and websites, traveled to cigar manufacturing regions, operates an educational institution, and writes a blog. ['nuff said!- ed.].

His report, however, was inadmissible. It revealed no methodology applied by the witness in reaching his conclusions [e.g., that the primary significance of "Guantanamera" is a famous song of Cuban origin, that those who do relate the word to Guantanamo, Cuba, do not perceive a connection with cigars, and that even if they did, this would not be a material factor in the purchasing decision]. He did not conduct any studies or focus groups, but relied only on his "educated perception." In short, there was "nothing in the report or his testimony to demonstrate that the report is reliable."

Materiality: The question at hand was whether "a significant portion of the relevant consumers would be materially influenced in the decision to purchase the cigars by the geographic meaning of the mark." In Spirits, the CAFC reversed the Board because, in finding that MOSKOVSKAYA was primarily geographically deceptively misdescriptive of vodka, it failed to consider whether Russian speakers, who would be deceived into believing that the vodka came from Moscow, constituted a "substantial portion of the intended audience." The court there noted that:

only 0.25% of the U.S. population speaks Russian.… If only one quarter of one percent of the relevant consumers was deceived, this would not be, by any measure, a substantial portion. However, it may be that Russian speakers are a greater percentage of the vodka-consuming public; that some number of non-Russian speakers would understand the mark to suggest that the vodka came from Moscow; and that these groups would together be a substantial portion of the intended audience.

Spanish speakers constitute more that 12 percent of the United States population. Tens of millions more have received Spanish language instruction in school. The Board concluded that "(i) persons who speak Spanish at home, and (ii) persons who do not speak Spanish at home but who know Spanish, are a substantial portion of the U.S. population." Moreover, Applicant's advertising is aimed at Spanish-speaking consumers and at the general adult population. The Board therefore found that "persons who speak or know Spanish are a substantial portion of the intended audience (or purchasers) of applicant's goods."

The question, then, was whether these consumers would be deceived by the geographical misdescription. Applicant argued that direct evidence of materiality is required, but the Board concluded otherwise. Reviewing the case law, noting the difficulty in obtaining direct evidence from purchasers, and observing that the TTAB does not require survey evidence in any proceeding (given the limited nature of its jurisdiction), the Board ruled that indirect evidence of materiality is acceptable in an inter partes proceeding.

Applicant argued that, even if the Board is permitted to draw an inference of materiality, here there is no evidence that Guantanamo is "famous or otherwise known" in this country for cigar production. Instead, according to Applicant, "Guantanamo is famous for a US Naval Detention center and as it relates to the song titled Guantanamera." The latter argument, however, conflicted with the District Court's finding that "Cuba, or Guantanamo, Cuba is the primary significance of GUANTANAMERA," and that the consuming public is likely to believe that the cigars come from Cuba. It also ignored the requirement that the mark be considered in the context of the goods.

Moreover, the law does not require that the place identified in the mark be "noted for" the goods in order for the Section 2(e)(3) bar to apply. It is enough that the consumer would expect the goods to come from that geographical location.

Finally, turning to the question of whether the misdescription would be a material factor in the purchasing decision, the Board answered in the affirmative.

From the advertisements, webpages, testimony, magazines and cigar publications and encyclopedias, we find that opposer has established that sellers of cigars in the United States market non-Cuban cigars through branding and marketing associations with Cuba because they believe that consumers value associations with Cuba in making purchasing decisions.

And so the Board concluded that the Spirits test had been met, and it sustained the opposition.

TTABlog comment: From these cases, I distill the following: it's okay if native speakers of a foreign language are materially deceived by a geographical misdescription, as long as they comprise only a small portion of the entire intended market. In other words for the native speakers who are deceived - as they say in Russia - tough s%$tsky.

Text Copyright John L. Welch 2012.


At 10:27 AM, Anonymous Anonymous said...

"the TTAB does not require survey evidence in any proceeding (given the limited nature of its jurisdiction)" but they told the applicant - as they say in Russia -tough s%$tsky when he tried to offer an expert who relied only on his "educated perception" and not a survey.

At 10:39 AM, Anonymous Anonymous said...

I smell another reversal coming down the line for the Board if the appeal is to the USDC.
Must drive Board crazy in deciding cases trying to guess if an appeal is to the CAFC (why anyone would, I know not) which will give deference or to a USDC which will look at the TTAB analysis and go "huh"? Is the Board supposed to do a "real world" analysis like a court would in granting an injunctionfor purposes of refusing registration or upholdiong an Examiner or should the analysis be somethnig less given that it's not the same issue (most of the time)?

At 5:16 PM, Blogger William Maguire said...

I think this blog post should be read while listening to The Sandpipers sing the song... just sayin'...

At 7:20 AM, Anonymous Frank Herrera said...

This will be appealed. Again. This case started 10 years ago. We'll take it another 10 years if need be. Frank Herrera


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