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.


At 9:50 AM, Anonymous R Jacobs-Meadway said...

Heart healthy identifies a category of food/beverage products.
No one entity should be able to claim exclusive rights.
Zero is a common descriptive name for zero calorie beverages.
No one entity has used the term exclusively or should be able to use the term exclusively, whether it is a noun or adjective or is the name of the good itself or of the salient feature of the good that the consumer wishes to purchase for that quality/type of product -
There is no reason to take so constricted a view of genericy (see footlong for sandwiches that are a foot long, aka hoagies, subs)

At 1:39 PM, Anonymous Anonymous said...

I whole heartily agree with Professor McCarthy. In the same vein, I think the Federal Circuit/TTAB has also erred in its view that .com marks are generic if the mark includes an item sold through the website -- the courts got it right in regards to marks that consist of 1-800 numbers that mention the product sold, and there is no logical distinction between such 1-800 marks and .com marks. I was glad to see the district court in Virginia hold that is not generic. I also disagree with last year's CHURRASCOS decision -- a mark for a restaurant that consists of a food sold at the restaurant is not generic for restaurant services. Highly descriptive, yes, but not generic. (CHURRASCARIA is the generic term for such restaurants.)

At 9:01 PM, Anonymous joe dreitler said...

I think that when the CAFC was created it was supposed to be with smart lawyers who knew intellectual property law. It did not happen. Whether it was Bose importing patent fraud into the Lanham Act or the sad commentary by Tom McCarthy that the CAFC applied Marvin Ginn and made no effort to read the TLRA it is a sorry commentary. But then, how often does the Supreme Court take a CAFC decision? And what % of the time do they affirm the CAFC. Enough said.

At 9:06 PM, Blogger Bob Cumbow said...

I agree, on three counts. First, yes, the designation, to be generic, has to name the goods or services, not merely refer to them. Second, if referring to them were enough, then we couldn't tell the difference between a generic term and a descriptive one. Third, even if referring were enough, it would have to refer to the goods/services themselves, NOT to some alleged "key aspect" of the goods/services. If referring to an aspect were enough, then descriptive and even suggestive terms could become generic. Definitely a candidate for worst decision of the year.

At 11:33 PM, Anonymous Anonymous said...

I understand that the statute says that a "mark" is generic if the primary significance to the relevant public is that of a "generic name" for a product or service. The problem is that there are a very large number of generic terms (examples below) that may not be a "name" for a product or service but are still unregistrable because they are, in reality, generic terms, unless, as a purist, you insist that these terms must be categorized under the often-criticized language as so highly descriptive that they are incapable of distinguishing them from the goods of others. It was no doubt because of terms like the following that led to the creation of this language. For example, the following adjectives are and should be considered unregistrable generic terms even though they may not be "names"--pasteurized, homogenized (milk), turbo-charged (vehicles), naturally flavored (a variety of foods and beverages), antiseptic (mouthwash), low calorie (a variety of foods and beverages), multigrain (bread), footlong (sandwiches), high-definition (TVs), broad-spectrum, water-resistant (sunscreen), creamy, crunchy (peanut butter). These are just a few I came up with in a few minutes, but one can easily think of many, many more. Just look in your kitchen cabinet or pantry for examples. Why go through the needless mental exercise of saying that these terms are highly descriptive and that a particular applicant has not proven secondary meaning? That seems ridiculous to me. If the answer to this question is that the statute requires this result, then my answer would be that the language of the statute (in several places) should be changed to reflect reality. Realistically, there are many generic terms that are not in fact "names" of goods or services. Only if an applicant sought to register the combined terms above could one conclude that, for example, Multigrain Bread, is a generic name for the product. But if the applicant sought to register only the adjective, the result should clearly be the same.


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