Trademark Law | Expert Legal Commentary

June 26, 2009

In re Spirits Int’l: A Mark Is Geographically Deceptively Misdescriptive Only if Materially Deceptive to a Substantial Portion of the Intended Audience

In re Spirits International

By Tom Zuber of Zuber Lawler & Del Duca and Laura Castner of Kinsella Weitzman Iser Kump & Aldisert LLP

In re Spirits Int’l: A Mark Is Geographically Deceptively Misdescriptive Only if Materially Deceptive to a Substantial Portion of the Intended Audience

Clarifying the application of the doctrine of foreign equivalents, the Federal Circuit held that a mark is geographically deceptively misdescriptive if a substantial portion of the relevant consumer market is likely to be deceived by the mark. In In re Spirits International, 563 F.3d 1347 (Fed. Cir. 2009), the Federal Circuit vacated a TTAB decision that had affirmed the Patent Office’s refusal to register a mark on the grounds that it was primarily geographically deceptively misdescriptive. The Federal Circuit remanded the case for a determination of whether a substantial portion of the target audience would be deceived by the mark.

Background

Spirits Int’l NV (“Spirits”) applied for the mark “MOSKOVSKAYA” for vodka. The Patent Office’s Examining Attorney translated the mark from Russian as “of or from Moscow” and Spirits agreed with that translation. Spirits further conceded that its vodka would not be manufactured, produced, or sold in Moscow and had no other connection to Moscow. Applying the doctrine of foreign equivalents, the Examining Attorney refused to register the mark on the grounds that the public, in translating the mark, would likely believe that the vodka was from Moscow and therefore be deceived by the mark in a manner that would be material.

The Trademark Trial and Appeal Board (TTAB) affirmed the denial of the registration, noting that to be “material” deceptiveness, “an appreciable number of consumers for the goods” must be deceived. The TTAB further defined “appreciable number” as requiring only a showing that some portion of relevant consumers would be deceived. The TTAB found that the mark met that materiality requirements because, based upon the 2000 U.S. Census, 706,000 people in the U.S. speak Russian and therefore would be able to translate, and be deceived by, the mark. Spirits appealed to the Federal Circuit. In re Spirits International, 563 F.3d 1347 (Fed. Cir. 2009).

Clarifying the proper scope and analysis of the materiality requirement

At issue before the court was the scope of the “materiality” requirement of an analysis of a “geographically deceptively misdescriptive” proposed mark, which is prohibited from registration by 15 U.S.C. section 1052(e)(3).

As the Federal Circuit Court explained, before the passage of NAFTA, the Patent and Trademark Office (“PTO”) could deny registration of geographically misdescriptive marks if: (1) the primary significance of the mark was a generally known geographic location, and (2) the relevant public would likely believe (incorrectly) that the goods marked came from or were otherwise affiliated with that location. 563 F.3d at 1352-1353. After the passage of NAFTA, the PTO also (3) must demonstrate that the misdescription would materially affect a consumer’s decision to buy the goods. Id. at 1353. This latter, newer requirement had not been fully interpreted by the Federal Circuit – the Spirits case presented that opportunity and it was the focus of the Court’s opinion.

The Court framed the question as: “whether a substantial portion of the relevant consumers is likely to be deceived, not whether any absolute number of particular segment of the relevant consumers (such as foreign language speakers) is likely to be deceived.” Id. at 1353. Therefore, in denying a mark, the PTO must define and determine the intended audience for the mark and then determine that a “substantial portion” of that target market would be deceived by the mark.

In this case, the Federal Circuit determined that he PTO did not perform the correct, complete inquiry. The PTO only determined that 760,000 people in the U.S. spoke Russian – 0.25% of the U.S. population. If the entire U.S. population were the relevant target consumer group for the mark, then this tiny percentage “would not be, by any measure, a substantial portion.” Id. at 1357.

On the other hand, if the TTAB determined that “Russian speakers are a greater percentage of the vodka-consuming public; that some number of non-Russian speakers would understand the mark to suggest that the vodka came from Moscow; and that these groups would together be a substantial portion of the intended audience,” then the PTO might establish a prima facie case of material deception. Id. The Court remanded the matter for determination of this issue.

CONCLUSION

In Spirits, the Federal Circuit clarified the role of the doctrine of foreign equivalents in a determination of whether a mark is geographically deceptively misdescriptive. The Court made clear that simply relying on the number of speakers of the language in question, without consideration of what percentage of the relevant target audience they comprise, is not alone sufficient to establish that a substantial portion of the target audience will be deceived.

About the Authors

Tom Zuber is a Partner of Zuber Lawler & Del Duca, focusing on intellectual property protection and exploitation.

Image Credit: ©iStockphoto.com/dulezidar

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Tom Zuber
Laura Castner

Companies Mentioned

Spirits International B.V.

Trademark Trial and Appeal Board

U.S. Patent and Trademark Office

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