CAFC vacates TTAB decision in Royal Crown/ "zero" case

The issue was the dismissal of Royal Crown's opposition to proposed marks of Coca-Cola:



Royal Crown Company, Inc. and Dr Pepper/Seven Up,
Inc. (together, “Royal Crown”) appeal a decision of the
Trademark Trial and Appeal Board (“the Board”) dismissing
Royal Crown’s opposition to the registration of The
Coca Cola Company’s (“TCCC”) trademarks for various
soft drinks and sports drinks including the term ZERO.
Royal Crown Co. v. Coca-Cola Co. (TTAB Decision),
Opposition No. 91178927 (Parent Case), 2016 TTAB
LEXIS 234 (T.T.A.B. May 23, 2016).1 Because we conclude
that 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,



Background:


Whether the Board applied the correct legal standard
to the facts is a question of law. Princeton Vanguard,
LLC v. Frito-Lay N. Am., Inc., 786 F.3d 960, 964 (Fed.
Cir. 2015) (citing In re Dial–A–Mattress Operating Corp.,
240 F.3d 1341, 1345 (Fed. Cir. 2001)). We review the
Board’s legal determinations de novo and without deference.
Hewlett-Packard Co. v. Packard Press, Inc., 281
F.3d 1261, 1265 (Fed. Cir. 2002).
Whether an asserted mark is generic or descriptive is
a question of fact. Princeton Vanguard, 786 F.3d at 964
(citing In re Hotels.com, LP, 573 F.3d 1300, 1301 (Fed.
Cir. 2009)); In re Bayer Aktiengesellschaft, 488 F.3d 960,
964 (Fed. Cir. 2007). “On appellate review of the Board’s
factual finding of genericness, we determine whether, on
the entirety of the record, there was substantial evidence
to support the determination.” Hotels.com, 573 F.3d at
1302.
We review the Board’s factual findings for substantial
evidence, which requires “such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.” Consol. Edison Co. of N.Y. v. N.L.R.B, 305
U.S. 197, 229 (1938). The Board’s analysis must encompass
the entire evidentiary record. See Princeton Vanguard,
786 F.3d at 970.
At the outset, because TCCC seeks registration of its
ZERO-containing marks under Section 2(f) of the Lanham
Act, TCCC has conceded that ZERO is not inherently
distinctive in association with the genus of goods at
issue—soft drinks, energy drinks, and sports drinks. And,
TCCC thus concedes that ZERO is, to some extent, descriptive.
The only relief Royal Crown seeks in its oppositions
to TCCC’s applications is that TCCC be required to
disclaim the term ZERO.

(...)

If the Board concludes that Royal Crown has not met
its burden to demonstrate the genericness of TCCC’s
ZERO-bearing marks, TCCC will need to demonstrate the
acquired distinctiveness of its marks—that, “in the minds
of the public, the primary significance of a product feature
or term is to identify the source of the product rather than
the product itself.” Coach Servs., Inc. v. Triumph Learning
LLC, 668 F.3d 1356, 1379 (Fed. Cir. 2012) (quoting
Dial-A-Mattress, 240 F.3d at 1347). Only then can marks
such as the marks TCCC claims, which TCCC has conceded
are not inherently distinctive based on its Section 2(f)
filings, qualify for registration on the principal register.
See 15 U.S.C. § 1052(f); Two Pesos, Inc. v. Taco Cabana,
Inc., 505 U.S. 763, 769 (1992).




The outcome:


We conclude the Board erred in its legal framing of
the genericness inquiry in two ways—it failed to examine
whether ZERO identified a key aspect of the genus at
issue, and it failed to examine how the relevant public
understood the brand name at issue when used with the
descriptive term ZERO. We also find that the Board
should have first assessed the level of the marks’ descriptiveness
before determining whether TCCC satisfied its
burden of establishing acquired distinctiveness. Absent
such a finding, it is not possible for us to review on appeal
whether the evidentiary record can support the Board’s
finding of acquired distinctiveness. We vacate and remand
for the Board to apply the proper legal standard for
genericness an





As to genericness:




“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.”

(...)

The Board’s approach was erroneous. The Board
asked the wrong question in assessing the alleged genericness
of the ZERO term. Specifically, the Board failed to
consider that “a term can be generic for a genus of goods
or services if the relevant public . . . understands the term
to refer to a key aspect of that genus.” In re Cordua
Rests., Inc., 823 F.3d 594, 603 (Fed. Cir. 2016) (emphasis
added). We explained in In re Cordua that “the test is not
only whether the relevant public would itself use the term
to describe the genus, but also whether the relevant
public would understand the term to be generic. Any
term that the relevant public understands to refer to the
genus . . . is generic.”