New Test Determines Primarily Geographically Misdescriptive Marks

In a decision interpreting Section 2(e)(3) of the Lanham Act (15 U.S.C. '1052(e)(3)), the Federal Circuit Court of Appeals has adopted a new three-part test to be used by the U.S. Patent and Trademark Office (PTO) in determining whether a trademark is “primarily geographically deceptively misdescriptive” (“misdescriptive”). In re California Innovations, Inc., 329 F.3d 1334 (Fed. Cir. 2003). The Federal Circuit held that the amendments to the Lanham Act resulting from the North American Free Trade Agreement (NAFTA) changed the rules under which the PTO may deny registration to misdescriptive marks.

California Innovations, Inc. (“CI”) applied to register the mark CALIFORNIA INNOVATIONS & Design for a variety of goods that did not originate in California. After the PTO refused registration based on likelihood of confusion with prior registrations, CI disclaimed “California” and amended its identification and classification of the goods. The mark was published without opposition, but the PTO later refused registration on the misdescriptiveness ground. This refusal was upheld by the Trademark Trial and Appeal Board on appeal. California Innovations, 329 F.3d at 1336. However, the Federal Circuit reversed and remanded the case to the PTO for reconsideration under a new test made necessary by the NAFTA amendments.

Prior to NAFTA there were three categories of geographical marks:

1) geographically deceptive marks that materially deceive the public ('1052(a)), 2) primarily geographically descriptive marks ('1052(e)(2)) and 3) primarily geographically deceptively misdescriptive marks ('1052(e)(3)). Geographically deceptive marks are permanently unregistrable. The other two categories were registrable on the Supplemental Register and, if the applicant could prove that the mark had acquired distinctiveness, could also be registered on the Principal Register. Primarily geographically descriptive marks and misdescriptive marks were treated identically by the PTO. Pre-NAFTA, it was easy for the PTO to deny registration on the Principal Register under '1052(e) because registration was still available for such marks on the Supplemental Register and the acquired distinctiveness basis was also available.

Also pre-NAFTA, the PTO originally used a test where the only substantive issue was whether the mark conveyed primarily a geographical connotation; that is, whether the mark was known to some large segment of the public as a geographical place name. In 1981, the predecessor to the Federal Circuit rejected that test and adopted a “goods-place association” requirement that “the public must also associate the goods in question with the place identified by the mark.” In re Nantucket, 677 F.2d 95, 99-100 (CCPA 1982). However, no showing was required that the goods-place association was material to the consumer's decision to purchase the goods. A later decision clarified that the geographical place did not have to be well known or noted for the particular goods. The PTO merely had to show that a particular place would be associated with particular goods, not the fame or exclusivity of the place for those goods. In re Loew's Theatres, Inc., 769 F.2d 764, 767-69 (Fed. Cir. 1985).

California Innovations found that the NAFTA amendments erased the distinction between geographically deceptive marks under '1052(a) and misdescriptive marks under '1052(e)(3), because the amendments emphasized protection of the public from deception and expressly excluded misdescriptive marks from eligibility for registration even if acquired distinctiveness was shown. As a result, misdescriptive marks became fatally unregistrable, like geographically deceptive marks. The Federal Circuit therefore determined that a stronger test for rejection of such marks was necessary, and that the PTO cannot rely simply on lack of distinctiveness to deny registration, but must show that the public will be deceived. The relatively easy burden on the PTO of a “naked goods-place association” is no longer justified.

Thus, the Federal Circuit adopted a materiality requirement similar to the one required to reject a mark as geographically deceptive. The PTO cannot deny registration under '1052(e)(3) unless it shows that “the goods-place association made by the consumer is material to the consumer's decision to purchase those goods.” For example, in an earlier decision involving the mark THE VENICE COLLECTION, the Federal Circuit observed that there was “substantial evidence that Venice, Italy is known for glass, lace, art object, jewelry, cotton and silk textiles, printing and publishing,” that “all of applicant's goods are associated with traditional Venetian products,” and “the public would mistakenly believe that they were purchasing 'traditional Venetian products' because the applicant's products were 'indistinguishable' from the products traditionally originating in Venice.” In re Save Venice New York, Inc. 259 F.3d 1346 (Fed. Cir. 2001). This, the Federal Circuit noted, is evidence sufficient to satisfy the new test.

In another prior case, the Federal Circuit found that NEW YORK WAYS GALLERY was unregistrable because “New York is well-known as a place where leather goods and handbags are designed and manufactured” and that “upon encountering goods bearing the mark … [the public] would believe that the goods originate in New York.” In re Hiromichi Wada, 194 F.3d 1297, 1299 (Fed. Cir. 1999). The PTO showed that the place was not only well known but renowned for the products at issue, demonstrating materiality.

The Federal Circuit's new test requires proof that:

• the primary significance of the mark is a generally known geographic location,
• the consuming public is likely to believe the place identified by the mark indicates the origin of the goods bearing the mark, when in fact the goods do not come from that place, and
• the misrepresentation was a material factor in the consumer's decision.

CI only requested review for the goods “thermal insulated bags for food and beverages and thermal insulated wraps for cans.” The Federal Circuit instructed the PTO to consider under the new test whether the mark's primary significance was geographic, as consumers could also associate it with the idea of “a creative, laid-back lifestyle or mindset.” The PTO must also apply the new test to determine if there is a goods-place association between California and the insulated products at issue and whether such an association is material to consumers. The Federal Circuit further held that CI's disclaimer of “California” would not render the mark registrable if the three tests were met. The PTO's request for rehearing was denied.

The California Innovations case dealt specifically with trademarks; that is, marks used in connection with goods. A later Federal Circuit decision, In re Les Halles De Paris, 334 F.3d 1371 (Fed. Cir. 2003), set forth an even stronger test for PTO rejection of misdescriptive service marks; that is, marks used in connection with the provision of services rather than goods. In Les Halles, the Federal Circuit recognized that services are different from goods because consumers will usually receive the services at the location of the business, so that they are aware that the services are not coming from the geographic location named in the mark. Accordingly, the Federal Circuit required the PTO to provide additional evidence to satisfy the services-place association and materiality prongs of the test. In service mark cases, the PTO must now show that (i) consumers “will likely be misled to make some meaningful connection between … the service and the relevant place,” and (ii) there is a “heightened association” between the service provided and the relevant geographic location.

In Les Halles, the service mark owner provided French kosher steakhouse restaurant services in New York under the name LE MARAIS. The evidence showed that “Le Marais” was a well-known and fashionable Jewish area in Paris with a number of fine restaurants. That established the first prong of the test, that the primary significance of the mark was a generally known geographic location. However, the PTO provided no additional support for the services-place association or materiality prongs. Such evidence could include identical menus, advertising that the food was imported from Paris, or that the chefs received specialized Parisian training. The PTO could also have shown that a material reason for the patron's choice of that particular restaurant in New York was its identity with the area in Paris.

NAFTA may have made it impossible to register a misdescriptive mark, but the Federal Circuit has made it more difficult for the PTO to prove that the mark is “deceptively” misdescriptive. It is also possible to respond to a misdescriptiveness objection by submitting evidence and arguments that the mark does not consist primarily of a geographic place name; for example, by showing that the name at issue has some other primary connotation, such as a surname for which you have evidence of acquired distinctiveness. One can also challenge the “misdescriptive” portion of the objection by showing that some activity relevant to the goods or services takes place in the named place.

Keep in mind that the NAFTA amendments did not change the rules for marks that are found to be primarily geographically descriptive under '1052(e)(2). Although such marks can be denied registration on the Principal Register, they are not fatally unregistrable. They can still be registered on the Supplemental Register, and on the Principal Register if you can show that they have acquired distinctiveness.

In a decision interpreting Section 2(e)(3) of the Lanham Act (15 U.S.C. '1052(e)(3)), the Federal Circuit Court of Appeals has adopted a new three-part test to be used by the U.S. Patent and Trademark Office (PTO) in determining whether a trademark is “primarily geographically deceptively misdescriptive” (“misdescriptive”). In re California Innovations, Inc., 329 F.3d 1334 (Fed. Cir. 2003). The Federal Circuit held that the amendments to the Lanham Act resulting from the North American Free Trade Agreement (NAFTA) changed the rules under which the PTO may deny registration to misdescriptive marks.

California Innovations, Inc. (“CI”) applied to register the mark CALIFORNIA INNOVATIONS & Design for a variety of goods that did not originate in California. After the PTO refused registration based on likelihood of confusion with prior registrations, CI disclaimed “California” and amended its identification and classification of the goods. The mark was published without opposition, but the PTO later refused registration on the misdescriptiveness ground. This refusal was upheld by the Trademark Trial and Appeal Board on appeal. California Innovations, 329 F.3d at 1336. However, the Federal Circuit reversed and remanded the case to the PTO for reconsideration under a new test made necessary by the NAFTA amendments.

Prior to NAFTA there were three categories of geographical marks:

1) geographically deceptive marks that materially deceive the public ('1052(a)), 2) primarily geographically descriptive marks ('1052(e)(2)) and 3) primarily geographically deceptively misdescriptive marks ('1052(e)(3)). Geographically deceptive marks are permanently unregistrable. The other two categories were registrable on the Supplemental Register and, if the applicant could prove that the mark had acquired distinctiveness, could also be registered on the Principal Register. Primarily geographically descriptive marks and misdescriptive marks were treated identically by the PTO. Pre-NAFTA, it was easy for the PTO to deny registration on the Principal Register under '1052(e) because registration was still available for such marks on the Supplemental Register and the acquired distinctiveness basis was also available.

Also pre-NAFTA, the PTO originally used a test where the only substantive issue was whether the mark conveyed primarily a geographical connotation; that is, whether the mark was known to some large segment of the public as a geographical place name. In 1981, the predecessor to the Federal Circuit rejected that test and adopted a “goods-place association” requirement that “the public must also associate the goods in question with the place identified by the mark.” In re Nantucket, 677 F.2d 95, 99-100 (CCPA 1982). However, no showing was required that the goods-place association was material to the consumer's decision to purchase the goods. A later decision clarified that the geographical place did not have to be well known or noted for the particular goods. The PTO merely had to show that a particular place would be associated with particular goods, not the fame or exclusivity of the place for those goods. In re Loew's Theatres, Inc., 769 F.2d 764, 767-69 (Fed. Cir. 1985).

California Innovations found that the NAFTA amendments erased the distinction between geographically deceptive marks under '1052(a) and misdescriptive marks under '1052(e)(3), because the amendments emphasized protection of the public from deception and expressly excluded misdescriptive marks from eligibility for registration even if acquired distinctiveness was shown. As a result, misdescriptive marks became fatally unregistrable, like geographically deceptive marks. The Federal Circuit therefore determined that a stronger test for rejection of such marks was necessary, and that the PTO cannot rely simply on lack of distinctiveness to deny registration, but must show that the public will be deceived. The relatively easy burden on the PTO of a “naked goods-place association” is no longer justified.

Thus, the Federal Circuit adopted a materiality requirement similar to the one required to reject a mark as geographically deceptive. The PTO cannot deny registration under '1052(e)(3) unless it shows that “the goods-place association made by the consumer is material to the consumer's decision to purchase those goods.” For example, in an earlier decision involving the mark THE VENICE COLLECTION, the Federal Circuit observed that there was “substantial evidence that Venice, Italy is known for glass, lace, art object, jewelry, cotton and silk textiles, printing and publishing,” that “all of applicant's goods are associated with traditional Venetian products,” and “the public would mistakenly believe that they were purchasing 'traditional Venetian products' because the applicant's products were 'indistinguishable' from the products traditionally originating in Venice.” In re Save Venice New York, Inc. 259 F.3d 1346 (Fed. Cir. 2001). This, the Federal Circuit noted, is evidence sufficient to satisfy the new test.

In another prior case, the Federal Circuit found that NEW YORK WAYS GALLERY was unregistrable because “New York is well-known as a place where leather goods and handbags are designed and manufactured” and that “upon encountering goods bearing the mark … [the public] would believe that the goods originate in New York.” In re Hiromichi Wada, 194 F.3d 1297, 1299 (Fed. Cir. 1999). The PTO showed that the place was not only well known but renowned for the products at issue, demonstrating materiality.

The Federal Circuit's new test requires proof that:

• the primary significance of the mark is a generally known geographic location,
• the consuming public is likely to believe the place identified by the mark indicates the origin of the goods bearing the mark, when in fact the goods do not come from that place, and
• the misrepresentation was a material factor in the consumer's decision.

CI only requested review for the goods “thermal insulated bags for food and beverages and thermal insulated wraps for cans.” The Federal Circuit instructed the PTO to consider under the new test whether the mark's primary significance was geographic, as consumers could also associate it with the idea of “a creative, laid-back lifestyle or mindset.” The PTO must also apply the new test to determine if there is a goods-place association between California and the insulated products at issue and whether such an association is material to consumers. The Federal Circuit further held that CI's disclaimer of “California” would not render the mark registrable if the three tests were met. The PTO's request for rehearing was denied.

The California Innovations case dealt specifically with trademarks; that is, marks used in connection with goods. A later Federal Circuit decision, In re Les Halles De Paris, 334 F.3d 1371 (Fed. Cir. 2003), set forth an even stronger test for PTO rejection of misdescriptive service marks; that is, marks used in connection with the provision of services rather than goods. In Les Halles, the Federal Circuit recognized that services are different from goods because consumers will usually receive the services at the location of the business, so that they are aware that the services are not coming from the geographic location named in the mark. Accordingly, the Federal Circuit required the PTO to provide additional evidence to satisfy the services-place association and materiality prongs of the test. In service mark cases, the PTO must now show that (i) consumers “will likely be misled to make some meaningful connection between … the service and the relevant place,” and (ii) there is a “heightened association” between the service provided and the relevant geographic location.

In Les Halles, the service mark owner provided French kosher steakhouse restaurant services in New York under the name LE MARAIS. The evidence showed that “Le Marais” was a well-known and fashionable Jewish area in Paris with a number of fine restaurants. That established the first prong of the test, that the primary significance of the mark was a generally known geographic location. However, the PTO provided no additional support for the services-place association or materiality prongs. Such evidence could include identical menus, advertising that the food was imported from Paris, or that the chefs received specialized Parisian training. The PTO could also have shown that a material reason for the patron's choice of that particular restaurant in New York was its identity with the area in Paris.

NAFTA may have made it impossible to register a misdescriptive mark, but the Federal Circuit has made it more difficult for the PTO to prove that the mark is “deceptively” misdescriptive. It is also possible to respond to a misdescriptiveness objection by submitting evidence and arguments that the mark does not consist primarily of a geographic place name; for example, by showing that the name at issue has some other primary connotation, such as a surname for which you have evidence of acquired distinctiveness. One can also challenge the “misdescriptive” portion of the objection by showing that some activity relevant to the goods or services takes place in the named place.

Keep in mind that the NAFTA amendments did not change the rules for marks that are found to be primarily geographically descriptive under '1052(e)(2). Although such marks can be denied registration on the Principal Register, they are not fatally unregistrable. They can still be registered on the Supplemental Register, and on the Principal Register if you can show that they have acquired distinctiveness.