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Royal Crown Co. v. Coca-Cola Co.

Assessment of Mark’s Genericness Must Consider Genericness As to Sub-Groups Within Designated Genus

Royal Crown Co. v. Coca-Cola Co., __ F.3d __, 2018 WL 3040163 (Fed. Cir. June 20, 2018) (Newman, O’MALLEY, Taranto) (TTAB) (4 of 5 stars)

Fed Cir vacates TTAB’s dismissal of Royal Crown’s opposition to Coca-Cola’s registration of trademarks for beverages including the term ZERO. The Board erred in its framing of the inquiry into whether ZERO was generic across the genus of goods at issue. Applying the two-part test of Marvin Ginn, 782 F.2d 987 (Fed. Cir. 1986), the Board erred in its application of the second prong, which addresses whether the term is “understood by the relevant public primarily to refer to [a certain] genus of goods or services.” Op. at 10 (quoting Marvin Ginn). Per In re Cordua Restaurants, 823 F.3d 594 (Fed. Cir. 2016), this inquiry examines not only whether the public would use the term to mean the genus, but also whether it would understand the term to refer to the genus, in whole or in part. “So too here, 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.” Op. at 13. The Board, by looking only for evidence that ZERO referred to the entire genus of soft drinks, neglected to consider whether the term generically addressed “zero calorie beverages as a sub-group.” Id. at 14.

The Board committed further error in failing to apply a “sliding-scale” approach to the balancing the alleged descriptiveness of the ZERO mark against Coca-Cola’s evidence of acquired distinctiveness. “While the Board here cited In re Steelbuilding.com (415 F.3d 1293 (Fed. Cir. 2005)) for the general proposition that higher levels of descriptiveness require a more substantial showing of acquired distinctiveness, it never returned to this point in its discussion.” Op. at 15. Vacatur was required to permit the Board, “if it reaches the question of acquired distinctiveness,” to make an “express finding regarding the degree of the mark’s descriptiveness on the scale ranging from generic to merely descriptive, and it must explain how its assessment of the evidentiary record reflects that finding.” Op. at 16.

The opinion also recites “several other concerns” with the Board’s treatment of the evidence. Contrary to the Board’s suggestion, Royal Crown’s genericness challenge did not require “direct evidence of consumer perception”; such evidence may come from “any competent source.” Id. at 16–17. The opinion also reminds the Board, and Coca-Cola, that if a term is generic, then per Northland Aluminum, 777 F.2d 1556 (Fed. Cir. 1985), it “cannot be rescued by proof of distinctiveness or secondary meaning no matter how voluminous the proffered evidence may be.” Op. at 17–18 (quoting Northland Aluminum). It was an error for the Board to rely on Coca-Cola’s evidence of sales or advertising in the genericness inquiry.

The opinion also criticizes the Board for relying on a Coca-Cola presented survey from five years before the close of testimony, noting both its age and that it sought only to determine if consumers “associated” ZERO with one or more companies’ products—not whether they would be confused by seeing ZERO on a different company’s label.

KEYWORDS: TRADEMARK; GENERICNESS; ACQUIRED DISTINCTIVENESS; DESCRIPTIVENESS; SURVEYS