Wednesday, June 27, 2018

Professor McCarthy Critiques the CAFC's ZERO Decision

Professor J. Thomas McCarthy has provided the following thought-provoking comments on the CAFC's ruling last week in the ZERO case [TTABlogged here], in which the appellate court vacated and remanded the Board's decision, ruling that the Board erred in its "legal framing" of the genericness issue and erred in failing to assess the level of descriptiveness of the term ZERO. What do you think of the Professor's comments?


Every trademark lawyer knows that the line between generic and descriptive is worth fighting over. If the designation is put into the “generic name” category, then it’s neither registerable as a mark nor protectable as a common law mark. If it’s a “generic name,” every competitor can use the words freely. If it’s “descriptive,” proving a secondary meaning can establish trademark rights.

The CAFC’s ZERO decision of June 20, 2018 smudged that crucial line and in doing so, made it easier to put words into the generic name category, free for all to use. Royal Crown Co. v. The Coca-Cola Co., __ F.3d ___, 2018 WL 3040163 (Fed. Cir. 2018). The CAFC reversed the T.T.A.B.'s decision that dismissed the Opposition of Royal Crown to Coca-Cola’s applications for various ZERO marks such as COCA-COLA ZERO and COKE ZERO without disclaiming “Zero.” Royal Crown argued that ZERO was a generic name for soft drinks with minimal or no calories and if it was not a generic name, it was descriptive and Coca-Cola had not acquired a secondary meaning for it.

The CAFC launched its analysis of the generic name issue with a mis-step that it has made over and over in recent years. The court quoted from its 1986 Marvin Ginn decision that: “A generic term ‘is the common descriptive name of a class of goods or services.’” That was what the Lanham Act said in 1986 but has not been the law for almost thirty years. A key 1989 statutory change deleted the confusing terminology “common descriptive name” to denote a generic name of a product or service. Yet, notwithstanding that statutory change, the Federal Circuit persists in mis-defining a generic name as “the common descriptive name.” This was the court’s first step in blurring the line between generic and descriptive.

In its second mis-step, the court stated, as it has repeatedly in the past, that “the critical issue in genericness cases is whether members of the relevant public primarily use or understand the term sought to be protected to refer to the genus of goods or services in question.” In the Royal Crown decision, the court uses the terms “refer to” or “refers to” sixteen times. In my view, this is not the law. It is a misleading and incorrect way of asking the question because it smears the critical line between a generic name and a descriptive word. “Refers to” is such a vague phrase that it could easily include both product names and product descriptions. For a hypothetical example, “heart healthy” “refers to” the content of a food. But while it “describes” the food, it does not “name” a food. I don’t say that I had a glass of juice and a “heart healthy” for lunch. An order for a “heart healthy” at the deli counter will bring blank stares. While it’s probably next to impossible to prove a secondary meaning in “heart healthy” (unless in combination with something else) it’s hard for me to see how it should be categorized as a generic name of something. This is what the Federal Circuit was getting at in the “descriptive” part of its opinion, chiding the T.T.A.B. for not deciding if “zero” was “highly” descriptive and thus requiring much more convincing evidence of having acquired distinctiveness (secondary meaning.)

To determine genericness, the proper question to ask is if the designation is a name of the product or service. The Lanham Act does not ask if the word “refers to” a product or service. The statute in three places requires that the primary significance of the word be as a “generic name for the goods or services.” Lanham Act § 14, 15 U.S.C.A. § 1064(3) (Cancellation); Lanham Act § 45, 15 U.S.C.A. § 1127 (Defining “abandonment”); Lanham Act § 15, 15 U.S.C.A. § 1065 (Exception to incontestable status).

The CAFC in the Royal Crown case concluded: “The Board therefore must consider whether ZERO is generic because it refers to a key aspect of at least a sub-group or type of the claimed beverage goods.” This judicial re-writing of the statute smudges the line between descriptive and generic. It expands the “generic name” category to include words that describe but do not name the goods.

Read comments and post your comment here.

TTABlog comment: What do you think? I think the Board's recent MECHANICALLY FLOOR-MALTED decision [TTABlogged here] is an example of the expansion of the "genericness" category.

Text Copyright John L. Welch 2018.

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