Zeroing In On Evidence In Coca-Cola TTAB CaseScott J. Slavick
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The history of mathematics depends on the introduction of the concept of zero — which by virtue of its unique nullity allows for computation, multiplication and division, even the calculus.
But as everyone knows, adding zero to anything results in no change. And a recent raft of applications and oppositions consolidated at the U.S. Patent and Trademark Office's Trademark Trial and Appeal Board might invite readers to consider what zero really adds up to.
The sum is this. Soft-drink giant Coca-Cola Co., which the world knows sells Coke Zero, had attempted to register various marks at the USPTO containing the word "zero," for soft drinks, sport drinks and energy drinks. Competing beverage makers Royal Crown and Dr. Pepper opposed Coca-Cola's registrations, on the ground that the word "zero" is generic or merely descriptive of no-calorie beverages, and because Coca-Cola had not disclaimed the word itself as generic or merely descriptive of such beverages.
To add fizz to the proceedings, Royal Crown and Dr. Pepper were separately pursuing registrations of their own for Pure Zero and Diet-Rite Pure Zero, with "zero" disclaimed. Unsurprisingly, these applications were opposed by Coca-Cola on the basis of likelihood of confusion.
In late May, in a consolidated proceeding at the TTAB, the board dismissed Royal Crown and Dr. Pepper's oppositions to 13 of Coca-Cola's applications. It sustained four of them pending the latter's filing a disclaimer of the word "zero" within two months. At the same time, the board dismissed Coca-Cola's likelihood-of-confusion oppositions to Royal Crown's and Dr. Pepper's applied-for marks, due to failure to prove priority. It's all served up in Royal Crown Co. Inc. and Dr. Pepper / Seven Up Inc. v. The Coca-Cola Co., Opposition Nos. 91178927, et al.
The importance of the case is twofold. First, both applicants and opposers overlook at their own peril the importance of survey data as evidence in determining a mark's registrability — and its relative strength. In this case, such evidence appears to have weighed heavily in the TTAB's decision. Second, when considering arguing for (or against) a mark's genericness or descriptiveness, or when determining whether to assert a weak mark, being cognizant in advance of certain constraints will be helpful in strengthening one's hand before approaching the USPTO.
Generics and Genericization: A Quick Primer
To understand the board's holding, it's helpful to be reminded what a generic term is for purposes of trademark prosecutions. Generic terms are common words or terms, often found in the dictionary, that identify products and services and are not specific to any particular source. The USPTO will not allow an applicant to register as a trademark a term that is generic for the goods and/or services identified in the trademark applicant's application.
In assessing their suitability as trademarks, words can be divided into five categories — from fanciful, invented words, which typically are strong trademarks, to generic terms, which are not protectable at all. The stronger the mark, the more protection it can earn against other marks. The categories, ranked in decreasing order in terms of strength, are:
- Fanciful Marks — coined (made-up) words that have no relation to the goods being described (e.g., Exxon for petroleum products).
- Arbitrary Marks — existing words that contribute no meaning to the goods being described (e.g., Apple for computers).
- Suggestive Marks — words that suggest meaning or relation but that do not describe the goods themselves (e.g., Coppertone for suntan lotion).
- Descriptive Marks — marks that describe either the goods or a characteristic of the goods. Often it is very difficult to enforce trademark rights in a descriptive mark unless the mark has acquired a secondary meaning (e.g., Shoeland for a shoe store).
- Generic Terms — words that are the accepted and recognized description of a class of goods or services (e.g., computer software, facial tissue).
Trademark history is filled with distinctive marks that have become generic over time. Aspirin, cellophane, margarine, videotape, escalator and linoleum are just a few of the generic terms that initially were considered fanciful or arbitrary marks. Trade names such as Xerox and Kleenex remain on the knife's edge of dilution, through ubiquitous usage, but persist as defensible marks.
Xerox and Kleenex are instructive examples, too, for both have sustained a brand identity and defensible trademarks while risking becoming genericized. (If you're older than 40, you'll likely recall the request to “get a Xerox of this, please.” To this day, Xerox runs advertisements in print publications asking readers to call a copy a copy.) Ironically, product popularity and the trademark owner often are the twin culprits in helping a trademark devolve from source-identifying (which is protectable) to generic (which is not). If a trademark is used properly, as Kleenex and Xerox still are, then it is likely to remain the exclusive property of its owner.
The term genericide is sometimes used to describe the process where a trademark owner participates, often unknowingly, in the destruction of the distinctiveness of its own trademark. Once improper advertising and labeling cause consumers to begin using the mark as the name of the product or service, regardless of the source, a trademark loses its distinctiveness, qua aspirin, or lanolin or kerosene.
Tiny Bubbles? The Zero-Sum Game
In the instant case, the TTAB found that the identifications of goods in Coca-Cola's applications adequately defined the genus of the goods at issue as soft drinks, sports drinks, and energy drinks. The question then was whether the word "zero" was understood by the relevant public primarily to refer to that genus of goods.
Royal Crown did not provide any direct evidence regarding consumer understanding of "zero." Neither did it offer any dictionary evidence associating "zero" with soft drinks. That begs a question: Had Royal Crown conducted a consumer survey, and as a result been able to argue that consumers associated "zero" with soft drinks, the case might have come out differently. We will never know — and neither will they.
Royal Crown's indirect evidence, which the board found unpersuasive, included evidence of some 27 third-party zero-calorie soft drinks, sports drinks and energy drinks with names that incorporated the word "zero." However, the board held that “the overall use appears to be relatively minor in comparison to Coca-Cola's, representing a small fraction of Coca-Cola's use of the term for its goods.” Perhaps most important in rejecting Royal Crown's claims, none of its evidence showed that "zero" was the name of a specific category of sports, energy, or soft drinks.
The board felt that third-party registrations for marks with "zero" disclaimed did not prove genericness, because words that are merely descriptive may also be disclaimed. The board also held that a few public references to products labeled with the word "zero," spread over five years, did not establish that ordinary consumers primarily use or understand the word to refer to the genus of soft drinks, sports drinks, or energy drinks. Coca-Cola's own use of "zero" was “as part of a mark in product names” according to the board, and not as the product's genus.
The board held that Royal Crown had not met its burden of proof by establishing by a preponderance of the evidence that zero was generic for soft drinks, sports drinks or energy drinks, even for such drinks that contain no, or fewer than five, calories.
Interestingly, Coca-Cola claimed acquired distinctiveness for Zero in connection with its 17 applied-for marks. The board is still considering whether the Zero marks have acquired distinctiveness, under current board precedent, on the basis of the facts existing as of the time of registrability. Accordingly, the board took into account evidence up to the time of close of the testimony periods.
Coca-Cola's sales of beverages under the "Zero" family of marks were in the billions of dollars; its expenditures on advertising and promotion were in the hundreds of millions. In addition, unlike Royal Crown, Coca-Cola provided survey evidence from a prior proceeding to further support its acquired distinctiveness claim.
In response, Royal Crown argued that Coca-Cola could not establish acquired distinctiveness because its use of the word "zero" had not been substantially exclusive. However, the evidence concerning third-party use of "zero" (and Royal Crown's use as well) in a mark for soft drinks was, in the board's opinion "inconsequential, particularly when compared with the magnitude of Coca-Cola's use." The board went on to hold that the cumulative effect of Coca-Cola's use of "zero" in connection with its line of soft drinks was so extensive that it qualifies as “substantially exclusive” as required under Section 2(f) of the Lanham Act, and that the use of "zero" by others was not so persuasive as to rise to a level that invalidates Coca-Cola's claim of substantially exclusive use.
Not for Nothing: Royal Crown's Limited Win
The board did find, however, that Coca-Cola did not meet its burden of establishing that it had acquired distinctiveness in the term for energy drink products. Royal Crown's oppositions as to those four applications were sustained, although Coca-Cola was allowed two months from the date of this decision in late May, in which to file a motion "to amend these four applications to conform to the findings of the Board by stating that no claim is made to the exclusive right to use ZERO apart from the marks as shown for the applications and goods 'non-alcoholic beverages, namely, energy drinks' and 'syrups and concentrates for making energy drinks.'"
In possibly the only good news for Royal Crown to come out of these oppositions, the board found that the two Royal Crown applications for marks against which Coca-Cola had filed likelihood of confusion claims were inherently distinctive as a whole, and therefore RC could rely on the filing dates of its applications as its constructive first use dates: Feb. 28, 2005, for its application for Diet-Rite Pure Zero, and March 7, 2005, for its application for Pure Zero.
Coca-Cola did not assert likelihood of confusion based on any of its individual marks, but claimed a family of marks using the word "zero." However, Coca-Cola had used only one such mark before Royal Crown's filing dates. Therefore, in the board's view, Coca-Cola could not rely on a family-of-marks argument to prove likelihood of confusion because the company did not have a family of marks prior to Royal Crown's filing date. Thus, the board dismissed Coca-Cola's claim for failure to prove priority.
Some Important Considerations
This decision reminds practitioners of the importance of providing direct evidence to prove descriptiveness and/or genericness. Royal Crown relied only on indirect evidence to persuade the board of the supposed descriptive and generic nature of the "zero" mark used by Coca-Cola. Had Royal Crown provided survey evidence regarding the consumer understanding of the word "zero" specifically for soft drinks, sport drinks and energy drinks, the outcome could have been different.
The weight of survey evidence on the board's decision-making when it concluded that the consumer survey provided by Coca-Cola — along with sales and advertising of beverages under the "Zero" family of marks — qualified its use of the "zero" mark as substantially exclusive for soft drinks cannot be overlooked in this case.
In future applications, trademark attorneys might consider recommending that their clients conduct consumer surveys before launching important trademarks, especially marks that they can anticipate the board may find descriptive or generic or marks that third parties may challenge on the same grounds. Such a strategy — before filing — could include marketing campaigns targeting consumers to familiarize them with a mark before applying to register it.
Secondly, when dealing with descriptive or generic marks, trademark attorneys should consider suggesting their clients use a weak mark in a prominent or salient way to create in the mind of the consumers the required association of the mark with the products in order to claim acquired distinctiveness if necessary. Of course, this is a pretrial strategy — perhaps even a pre-application strategy. Even though Royal Crown presented in evidence many third-party zero-calorie soft drinks, sports drinks and energy drinks with names that incorporated the word "zero," the board found RC's argument unpersuasive because the use of "zero" in these products was minor in comparison to Coca-Cola's use of the word on its products.
If neither of these strategies appear sufficient to overcome descriptive or generic objections, disclaiming the conflicting work (as Royal Crown did) is the safest option to avoid challenges or refusals.
One might think both conducting surveys pretrial or changing labeling and advertising strategies to strengthen an otherwise relatively weak mark would be an expensive strategy, in particular when considering the number of trademarks that larger consumer-oriented companies file yearly. Depending on how marketing budgets are allocated for a family of brands, however, such strategies need be reserved only for marks that the companies' trademark counsel consider weak from the beginning. As the old saying goes “an ounce of prevention is better than a pound of cure.” To that, I've nothing to add.
Reprinted with permission from the September 26, 2016 edition of Law30.com.