Precedential No. 17: Is PERKS Generic For Volume Discount Buying Services? Merely Descriptive?

In a somewhat complicated, yet enervating brouhaha, Coach/Braunsdorf petitioned for cancellation of a registration for the mark PERKSPOT for discount buying program services, claiming likelihood of confusion with its registered marks PERKS, Perks, and PERKSCARD for volume discount buying services. Respondent counterclaimed for cancellation of the first and third of Petitioner's pleaded registrations on the grounds of genericness, and cancellation of the second on the ground of mere descriptiveness. In a 57-page opinion that seemed much longer, the Board denied the genericness counterclaim, upheld the mere descriptiveness counterclaim, and dismissed Petitioner's likelihood of confusion claim. Coach/Braunsdorf Affinity, Inc. v. 12 Interactive, LLC, 110 USPQ2d 1458 (TTAB 2014) [precedential].

Genericness counterclaim: The Board found the genus of Petitioner's services to be volume discount buying services. The relevant public comprised companies that purchase volume discount buying services for customers and employees, as well as individuals who join organizations offering volume discount buying services.

In determining how the relevant purchasers perceive the marks PERKS and PERKSCARD, the Board considered dictionary definitions, Petitioner's own use of the marks, and third-party use of the word "perks," including third-party registrations.

The dictionary evidence showed that a "perk" is an employee benefit that is additional to salary. Third-party use showed that the term "perks" has been extended to describe benefits provided to a person in order to induce him or her to enter into a commercial relationship, or provided as a reward to build loyalty.

A volume discount buying service is not, by its nature, a "perk." Neither PERKS nor PERKSCARD is the generic name of such a service. Although a volume discount buying service may be a "perk," not all volume discount buying services are "perks." For example, such a service may be offered to a customer other than as compensation for employment or as an inducement to enter into some other commercial relationship.

And so the Board dismissed the genericness counterclaim. [Note that at page 3 of the decision, the Board said that all three pleaded registrations were the subject of this counterclaim - ed.].

Mere Descriptiveness Counterclaim: Petitioner's registration for the mark Perks had already been cancelled for failure to file the Section 8 declaration of use, but because the parties had briefed the mere descriptiveness issue, the Board decided it. [The Board noted that Petitioner's registration for the mark PERKS was more than five years old when the petition for cancellation was filed, and so that registration cannot be cancelled on the ground of mere descriptiveness (See Section 14 of the Trademark Act)].

Petitioner asserted that the counterclaim to cancel the Perks registration was an improper collateral attack on its "incontestable" PERKS registration. The Board agreed that it appeared illogical to cancel the Perks registration while the PERKS registration cannot be attacked for mere descriptiveness. However, the Board pointed out, the "prior registration" or Morehouse defense is an equitable defense that is not available against a claim of mere descriptiveness. The public interest demands that registrations for marks that are merely descriptive be cancelled. Petitioner's prior registration would remain viable, but the newer registration, with a newer filing date and less than five years of existence, was not immune to a mere descriptiveness attack.

The Board then found that the term "perks" directly conveys information concerning a characteristic of Petitioner's services because the services are administered as "perks" programs. Consequently, judgment was entered in favor of Respondent on this counterclaim.

Likelihood of Confusion:  The Board next considered the likelihood of confusion issue vis-a-vis Petitioners' two remaining pleaded registrations, for PERKS and PERKSCARD. It found the involved services to be legally identical, and it therefore presumed that the channels of trade and classes of purchasers are the same.

As to the strength of the pleaded marks, the Board found that in terms of conceptual strength, the word "perks" is descriptive. The fact that the PERKS registration is "incontestable" means only that it cannot be challenged as invalid on the ground of mere descriptiveness. However, for purposes of a likelihood of confusion analysis, the mark can be considered descriptive.

The mark PERKSCARD is likewise descriptive because it describes a card used to obtain perks or benefits.

Given the weakness of the term "perks" in Petitioner's marks, the Board concluded that Respondent's mark PERKSPOT is sufficiently different from the marks PERKS and PERKSCARD to avoid a likelihood of confusion. And so the Board denied the petition for cancellation of the PERKSPOT registration.

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Text Copyright John L. Welch 2014.