IP Law Daily TTAB erred in finding that Coca-Cola ZERO products could be registered
Wednesday, June 20, 2018

TTAB erred in finding that Coca-Cola ZERO products could be registered

By Cheryl Beise, J.D.

In consolidated opposition proceedings between soft drink manufacturers, the Trademark Trial and Appeal Board erred in finding that the term ZERO is descriptive of zero-calorie beverages and that The Coca-Cola Company’s ZERO formative marks—when used in connection with the company’s soft drink and sports drink products—had acquired distinctiveness and were registrable without a disclaimer of the term ZERO, the U.S. Court of Appeals for the Federal Circuit has held. The Board’s conclusion that the term ZERO was not generic was vacated because the Board failed to properly identify the relevant genus of goods. The Board’s finding of secondary meaning was vacated because the Board failed to first determine whether the ZERO marks were highly descriptive. The Board’s treatment of the evidence in this case was also questionable (Royal Crown Company, Inc. v. The Coca-Cola Company, June 20, 2018, O’Malley, K.).

The Coca-Cola Company ("TCCC") filed 17 applications under Section 2(f) of the Lanham Act to register trademarks incorporating the work ZERO in connection with soft drinks, sports drinks, and energy drinks. Royal Crown Company, Inc., and Dr Pepper/Seven Up, Inc. (together, "RC") opposed the applications on the ground that the term ZERO was either generic for zero-calorie soft drinks and beverages or descriptive without acquired distinctiveness, and thus could not be registered without a disclaimer of ZERO. For its part, TCCC opposed the registration of two RC marks that incorporated the term ZERO—PURE ZERO and DIET RITE PURE ZERO (ZERO disclaimed in both marks)—on the ground of likelihood of confusion. The Board consolidated the opposition proceedings.

In May 2016, the Board issued its final decision, holding that the term ZERO is not generic, but is descriptive of zero-calorie beverages, and finding that TCCC’s ZERO formative marks—when used in connection with TCCC’s soft drink and sports drink products—had acquired distinctiveness under Section 2(f) of the Lanham Act and thus could be registered without any disclaimer. The Board, however, sustained RC’s oppositions to TCCC’s applications to register marks incorporating ZERO for energy drinks because TCCC failed to show the marks had acquired distinctiveness for energy drink products. The Board also held that TCCC also could not prevent RC from registering PURE ZERO and DIET RITE PURE ZERO (both with ZERO disclaimed) because those marks were inherently distinctive and were in use prior to all but one of TCCC’s marks. RC appealed the Board’s dismissal of its oppositions to registration of the TCCC marks for soft drinks and sports drinks.

Genericness. The test for determining whether a term is generic involves a two-step inquiry: (1) determining the genus of goods or services at issue and (2) determining whether the term sought to be registered is understood by the relevant public primarily to refer to the genus of goods or services. H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., 782 F.2d 987, 990 (Fed. Cir. 1986).

The Board found that the relevant genus of goods under the first prong of the Marvin Ginn test was "soft drinks, sports drinks, and energy drinks." As to the second prong, the Board determined that the relevant consuming public was "ordinary consumers who purchase and drink soft drinks, energy drinks, or sports drinks." RC did not dispute the second prong finding, but argued that the Board erred in defining the relevant genus. According to RC, the relevant genus should be defined by a particular characteristic or subset of beverages—namely, those with few or no calories or carbohydrates.

The Federal Circuit agreed with RC that the Board erred in its legal framing of the genericness inquiry. First, the Board failed to examine whether ZERO identified "a key aspect" of the genus at issue. In In re Cordua Restaurants, Inc., the Federal Circuit explained that "a term is generic if the relevant public understands the term to refer to part of the claimed genus of goods or services, even if the public does not understand the term to refer to the broad genus as a whole." 823 F.3d 594, 605 (Fed. Cir. 2016) (emphasis added). The court pointed out that the term "pizzeria" is generic for restaurant services, even though the public does not understand the term to refer to the broad class of restaurants as a whole. Similarly, "if the public understands ZERO when used in combination with a designated beverage name to refer to a sub-group or type of beverage that carries specific characteristics, that would be enough to render the term generic," the court said.

The Board also failed to examine how the relevant public understood the brand name at issue when used with the descriptive term ZERO. On remand, the Board was directed to examine whether the term ZERO, when appended to a beverage mark, refers to a key aspect of the genus because it refers to a sub-group or type of the claimed beverage goods. "The Board must make this determination by considering the facts that the genus of goods for which TCCC seeks registration of its marks clearly encompasses zero calorie beverages as a sub-group, and that TCCC only proposed to use ZERO in combination with beverage marks that offer zero calorie versions thereof," the court said.

Descriptiveness. The Board also erred in assessing whether TCCC satisfied its burden of proving acquired distinctiveness without first determining exactly what that burden was. RC argued that the term ZERO, if not generic, is so highly descriptive that the Board’s assessment of TCCC’s evidence of acquired distinctiveness had to be exacting.

The court agreed, noting that an applicant’s burden of showing acquired distinctiveness increases with the degree of descriptiveness. In this case, the Board did not make any finding as to the level of descriptiveness conveyed by the term ZERO in the marks. This was reason enough to vacate the Board’s determination that RCCC’s ZERO marks had acquired distinctiveness. On remand, the Board was directed to make an express finding regarding the degree of the marks’ descriptiveness on the scale ranging from generic to merely descriptive, and to explain how its assessment of the evidentiary record reflects that finding.

Evidentiary record. The court highlighted several flaws in the Board’s evaluation of the evidence. First, the Board failed to define the burden it was imposing on TCCC regarding the evidence it presented because it failed to determine the level of descriptiveness of ZERO in the TCCC marks. Second, contrary to the Board’s intimations, RC was not required to provide direct evidence of consumer perception to support its genericness challenge to TCCC’s marks. RC offered numerous competent sources of evidence on the issue of genericness, including extensive third-party and competitive use. Third, to the extent the Board relied on TCCC’s sales and advertising figures as part of the genericness inquiry, it erred in doing so. Sales and advertising, no matter how extensive, cannot rescue a generic term, the court noted.

The court also was troubled by the Board’s reliance on a consumer survey prepared by TCCC’s expert as indicative of acquired distinctiveness of TCCC’s ZERO marks. Because the survey was more than five years old, it did not disclose contemporary public perception, and its probative value was questionable, particularly in view of RC’s evidence of increased third-party use of ZERO in the intervening years. The framing of the survey’s questions also was flawed, further reducing the evidentiary value of the survey.

Lastly, the court chastised the Board for referring in its opinion to TCCC’s "ZERO family of marks," without ever making an explicit finding that TCCC had demonstrated ownership of a family of marks. Under the family of marks doctrine, TCCC would have had to prove that the surname ZERO was itself distinctive to trigger recognition in and of itself. TCCC conceded on appeal that it was not relying on a ZERO-bearing family of marks.

Because the Board erred in its legal framing of the question of the claimed genericness of TCCC’s marks, and failed to determine whether, if not generic, the marks were at least highly descriptive, the Board’s decision was vacated and the case remanded for further proceedings.

The case is No. 2016-2375.

Attorneys: Laura Popp-Rosenberg (Fross Zelnick Lehrman & Zissu, PC) for Royal Crown Co., Inc. and Dr Pepper/Seven Up, Inc. Bruce William Baber (King & Spalding LLP) for The Coca-Cola Co.

Companies: Royal Crown Co., Inc.; Dr Pepper/Seven Up, Inc.; The Coca-Cola Co.

MainStory: TopStory Trademark FedCirNews

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