CAFC says TTAB applied the incorrect legal standard in assessing whether the term PRETZEL CRISPS is generic

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Princeton Vanguard, LLC (“Princeton Vanguard”) appeals
from the final decision of the Trademark Trial and
Appeal Board (“the Board”) cancelling its registration of
the mark PRETZEL CRISPS for pretzel crackers on the
Supplemental Register and denying its application to
register PRETZEL CRISPS on the Principal Register.
Frito-Lay N. Am., Inc. v. Princeton Vanguard, LLC, 109
U.S.P.Q.2d 1949 (T.T.A.B. Feb. 28, 2014) (“Board Decision”).
Because the Board applied the incorrect legal
standard in evaluating whether the mark is generic, we
vacate and remand for further proceedings.

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Princeton Vanguard argument:

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On appeal, Princeton Vanguard argues that the Board
erred in its genericness analysis when it assessed the
PRETZEL CRISPS mark as a compound term instead of a
phrase. Specifically, Princeton Vanguard contends that
the Board “took the short-cut of analyzing whether the
words ‘pretzel’ and ‘crisps’ are each generic for a pretzel
and a cracker, and then it merely assumed the public
would understand the combined mark PRETZEL CRISPS
to be generic for ‘pretzel crackers’ without due consideration
of the actual evidence of record.” A

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The CAFC noted:

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The Board appears to believe that there is a dichotomy
in the standard applicable to a particular mark depending
on whether it is a compound term or a phrase.
According to the Board, if the mark is a compound term,
then Gould applies, and it can focus on the individual
words, but if it is a phrase, American Fertility requires
that the Board consider the mark in its entirety. Id. at
1953. Because the Board found “no additional meaning
added to ‘PRETZEL CRISPS’ in relation to ‘pretzel crackers,’
when the individual terms are combined,” the Board
analyzed it as a compound term. Id. The Board then
considered the terms individually and concluded that
“pretzel” is generic for pretzels and pretzel snacks, and
“crisps” is generic for crackers. Id.
The problem with the Board’s analysis is that there is
only one legal standard for genericness: the two-part test
set forth in Marvin Ginn. Am. Fertility, 188 F.3d at 1348.

(...)

As noted, here, the Board determined that PRETZEL
CRISPS is a compound term, not a phrase, and evaluated
the terms individually under Gould. Board Decision, 109
U.S.P.Q.2d at 1953. The Board concluded that the “commonly
understood meaning of the words ‘pretzel’ and
‘crisps,’ demonstrates that purchasers understand that
‘PRETZEL CRISPS’ identifies ‘pretzel crackers.’” Id. at
1959. Where, as here, the record is replete with evidence
of the public’s perception of the term PRETZEL CRISPS
as a whole, it is unclear why the Board would resort to
analyzing the terms individually or why it would believe
doing so would aid its analysis. In any event, as we have
explained, the appropriate legal standard set forth in
Marvin Ginn requires consideration of the mark as a
whole.

At the end of its decision, the Board stated in passing
that, although it analyzed the term PRETZEL CRISPS as
a compound term, “were we to analyze it as a phrase, on
this record, our conclusion would be the same, as the
words strung together as a unified phrase also create a
meaning that we find to be understood by the relevant
public as generic for ‘pretzel crackers.’” Board Decision,
109 U.S.P.Q.2d at 1960. But the Board’s decision lacks
any indicia that it actually engaged in such an analysis.
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Of "substantial evidence"

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We reiterate, however, that substantial
evidence review “requires an examination of the
record as a whole, taking into account both the evidence
that justifies and detracts from an agency’s opinion.”
Falkner v. Inglis, 448 F.3d 1357, 1363 (Fed. Cir. 2006).
Our review under that standard “can only take place
when the agency explains its decisions with sufficient
precision, including the underlying factfindings and the
agency’s rationale.” Packard Press, Inc. v. HewlettPackard
Co., 227 F.3d 1352, 1357 (Fed. Cir. 2000).

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link: http://www.cafc.uscourts.gov/images/stories/opinions-orders/14-1517.Opinion.5-13-2015.1.PDF