Thursday, August 19, 2010

Ruling that TTAB Misapplied Section 2(e)(3) Test, District Court Reverses TTAB's "GUANTANAMERA" Decision

In a review by way of civil action, brought under 15 U.S.C. Section 1071(b)(1), the U.S. District Court for the District of Columbia reversed the TTAB's decision in Corporacion Habanos, S.A. v. Guantanamera Cigars Co., 86 USPQ2d 1473 (TTAB 2008) [precedential]. The Board had found the mark GUANTANAMERA for cigars to be primarily geographically deceptively misdescriptive under Section 2(e)(3). [TTABlogged here]. The federal court ruled that the Board "erred as a matter of law in applying the materiality requirement" of Section 2(e)(3) of the Trademark Act. Guantanamera Cigar Co. v. Corporacion Habanos, S.A., Civil Action No. 08-0721 (RCL) (August 5, 2010 D.D.C.).

Opposer's cigars

The district court followed the CAFC's decision in In re Spirits International, N.V., 90 USPQ2d 1489 (Fed. Cir. 2009) [precedential], which vacated a Board decision that had found MOSKOVSKAYA to be primarily geographically deceptively misdescriptive of vodka. The CAFC ruled that the Board had improperly applied the materiality test because it failed to consider whether a substantial portion of all relevant consumers (not just Russian speakers) is likely to be deceived by the mark. [TTABlogged here].

The district court ruled that, under Spirits, it must be shown 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 TTAB decided the GUANTANAMERA case before the CAFC's decision in Spirits, and did not make any findings regarding a "'substantial portion' of materially deceived consumers."

Spirits plainly demands more than a finding of Cuba’s reputation for high quality cigars. In Spirits, Moscow’s renown reputation [sic] for vodka was not enough to affirm the TTAB’s legal conclusion; likewise, Cuba’s renown reputation for cigars is not enough in this case.

Defendant Habanos argued that there are millions of Spanish-speakers in the USA, that the English speaking public recognizes "Guantanamera" to mean Guantanamo, Cuba, and that Plaintiff targeted Spanish-speaking consumers.

Nevertheless, this evidence fails to determine that a substantial proportion of the target audience would be deceived into purchasing the cigars because of the false goods-place association. Habanos never introduced evidence that suggested material deception of a substantial proportion of the relevant consuming public.

And so the district court remanded the case to the TTAB for proper application of the materiality test under Section 2(e)(3).

TTABlog comment: What evidence does Opposer need to show that deception would occur because of the false-goods place association? How would it establish that a "substantial portion" of the cigar-smoking population would believe that GUANTANAMERA cigars come from Cuba? Would it need a survey?

What would an Examining Attorney have to show in a Section 2(e)(3) refusal? [Note that when the MOSKOVSKAYA case was returned to the Examining Attorney, the refusal to register was withdrawn and the case passed to publication.] Would it suffice to show that the term GUANTANAMERA is used in English-language media in reference to the place in Cuba?

Since the GUANTANAMERA case was tried before the Spirits decision came down, should the Board re-open the testimony periods to allow the parties to submit additional evidence regarding materiality?

Text Copyright John L. Welch 2010.


At 6:33 AM, Anonymous Anonymous said...

The problem is Habanos' claim imply that any reference to a place in Cuba would be geographically deceptively misdescriptive for cigars, even the place in question (Guantanamo) is not known for its tobacco industry. That is like calling DES MOINES for cigarettes geographically deceptively misdescriptive-- even Des Moines is hardly associated with tobacco.

At 2:27 PM, Anonymous Anonymous said...

What's worse (as a matter of equity and common sense), if opposer prevails, opposer could argue that its use of the mark is geographically descriptive (and thus entitled to a possible finding of acquired distinctiveness), but applicant's use could be found deceptively misdescriptive (and thus never registerable)

Thus, applicant will be the longest continuous user of the mark, and the first to file an application for the mark...but opposer will be the registrant.

That stinks.

At 9:54 AM, Anonymous Frank Herrera said...

to both anonymous comments above: yes, thank you. Exactly our point(s). We've been arguing this for 8 years. -Frank Herrera


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