Addressing the proper analysis for assessing genericness and acquired distinctiveness of a trademark, the US Court of Appeals for the Federal Circuit vacated a US Trademark Trial and Appeal Board (TTAB) decision denying an opposition to applications filed by one soft drink company against the applications of another to register various trademarks containing the word ZERO. Royal Crown Company, Inc. et al. v. The Coca-Cola Company, Case No. 16-2375 (Fed. Cir., June 20, 2018) (O’Malley, J).

Royal Crown makes and distributes beverages under various trademarks, including the marks DIET RITE PURE ZERO and PURE ZERO. Royal Crown applied to register these two trademarks and disclaimed the word ZERO. Coca-Cola also makes and distributes beverages under various trademarks that include the word ZERO, such as COKE ZERO. Coca-Cola also applied to register many of its ZERO trademarks. The US Patent and Trademark Office (PTO) issued an office action asking Coca-Cola to disclaim the word ZERO because the term merely describes the calorie or carbohydrate content of the goods. In response, Coca-Cola argued that its various ZERO marks had acquired distinctiveness, and refused to disclaim ZERO. The PTO accepted Coca-Cola’s evidence of acquired distinctiveness and published Coca-Cola’s various ZERO applications without a disclaimer of the word ZERO.

Royal Crown opposed Coca-Cola’s various ZERO applications, contending that (1) ZERO was generic when applied to certain beverages, and (2) ZERO was merely descriptive and could not indicate the source of Coca-Cola’s products. Rather than arguing that Coca-Cola’s applications should all be refused, Royal Crown only sought to require Coca-Cola to disclaim ZERO in its applications. The TTAB rejected Royal Crown’s arguments on both points, and Royal Crown appealed.

On appeal, the Federal Circuit criticized the TTAB’s genericness analysis. The proper test for assessing whether a term is generic asks:

• What is the genus for the goods or services at issue?

• Is the term sought to be registered understood by the relevant public to primarily refer to that genus of goods or services?

The TTAB found that the relevant genus was soft drinks, sport drinks and energy drinks, but failed to consider that the relevant genus included a subcategory of zero-calorie or zero-carbohydrate beverages. The Court cited its decision in In re Cordua (IP Update, Vol. 19, No. 6) and stated that a term is generic if the relevant public understands the term to refer to part of the claimed genus or services, even if the public does not understand the term to refer to the broad genus as a whole. The Court explained that the TTAB also failed to consider whether ZERO would be generic for a subcategory of the genus of soft drinks, sport drinks and energy drinks—zero-calorie or zero-carbohydrate beverages. The Court vacated the TTAB’s decision and ordered the TTAB to consider whether ZERO refers to a key aspect of zero-calorie or zero-carbohydrate beverages.

The Federal Circuit also considered whether the TTAB erred in determining that Coca-Cola had proven that its various ZERO marks had acquired distinctiveness. On this issue, the Court found that the TTAB had committed a significant flaw by failing to determine whether Coca-Cola’s ZERO marks were highly descriptive or merely descriptive. The more descriptive a mark is, the more evidence is necessary to demonstrate that a mark has acquired distinctiveness. As the Court explained, the TTAB failed to specify the evidentiary burden Coca-Cola needed to meet to show that its ZERO marks were eligible for registration.

In reviewing the TTAB’s examination of Coca-Cola’s evidence of acquired distinctiveness, the Federal Circuit noted the TTAB’s reliance on a survey from 2008 and a reference to Coca-Cola’s “family” of ZERO marks. The Court noted that acquired distinctiveness was a time-related concept and questioned the probative value of a survey conducted more than five years before the close of testimony before the TTAB. The Court also doubted that the family of marks doctrine would help demonstrate the acquired distinctiveness necessary to support registration of Coca-Cola’s ZERO marks, given the fact that Coca-Cola would still need to demonstrate that the shared feature of the family of marks—ZERO—was distinctive.