United States: Federal Circuit Repairs 'Cracked' Pretzel Logic

Last Updated: July 17 2015
Article by Scott J. Slavick

Vacates TTAB decision on pretzel crisps, remands under Marvin Ginn

A fundamental precept in trademark law is that an applicant cannot receive registration if an applied-for mark is simply descriptive of the goods or services in connection with which it is to be used. A mark must be inherently distinctive, allowing the user to distinguish its goods and services from others' similar ones. 

This precludes registration for generic marks. In its precedential holding in the trademark touchstone Marvin Ginn case, the U.S. Court of Appeals for the Federal Circuit explained: "Determining whether a mark is generic ... involves a two-step inquiry: First, what is the genus of goods or services at issue? Second, is the term sought to be registered or retained on the register understood by the relevant public primarily to refer to that genus of goods or services?" See H. Marvin Ginn Corp. v. Int'l Ass'n of Fire Chiefs, Inc., 782 F.2d 987, 989 (Fed. Cir. 1986). 

In a recent precedential decision, a unanimous Federal Circuit panel vacated the Trademark Trial and Appeal Board's (TTAB) decision holding the mark Pretzel Crisps to be generic for "pretzel crackers," and remanded the case to the TTAB for application of the legal standard set forth in Marvin Ginn. The court concluded that the board had failed to consider evidence of the relevant public's understanding of the term pretzel crisps in its entirety. See Princeton Vanguard, LLC v. Frito-Lay North America, Inc., Appeal No. 14-1517 (Fed. Cir. May 15, 2015). 

The critical issue in cases that seek to establish if the word or words used in a trademark sought to be registered for a commercial product or service are to be considered generic is whether members of the relevant public primarily use or understand that mark to refer to the genus of the applied-for goods or services in question. 

In this case, the parties did not disagree that the genus of goods at issue was pretzel crackers and the relevant public were ordinary consumers who purchase and eat these types of crackers. Both the appellant and the respondent had conducted and entered as evidence their own experts' surveys of consumers to defend their respective positions. 

The TTAB had held that to determine if an applied-for mark was generic, it had to determine whether the applied-for trademark is generic as a whole. But the board went on to cite a different case, In re Gould, for the holding that when the applied-for mark is a "compound term"— that is, a trademark made up of a combination of two or more words in ordinary grammatical construction — then the board only has to consider the meanings of the words that make up the compound term. If the applied-for mark is a phrase, however, the board's previous holding in American Fertility requires the board to examine the meaning of the disputed phrase in its entirety. 

Compound term? Phrase? The Court of Appeals held that there was no such dichotomy. It explained that the error in the board's analysis was that there is only one legal test to determine if a trademark is generic, namely, the two-part test articulated in Marvin Ginn. Regardless of whether the applied-for mark is a compound term or a phrase, the right test to determine if it is generic is to consider the evidence of the public's understanding of the mark as a whole. See Am. Fertility, 188 F.3d at 1348-49. 

The court also explained that its decision in In re Gould was meant to assist in assessing the genericness of compound terms where evidence shows that the relevant public understands the individual terms to be generic and that putting those terms together to create a compound term does not create any new meaning. The analysis in In re Gould, it said, was not meant to be seen as a shortcut or as a correction of the two-part test in Marvin Ginn

The panel ruling also explained that while analyzing the public's understanding of the constituent words of a compound term may be a useful first step in determining whether a mark is generic, it is only the first step. The board should go on and consider the recorded evidence regarding the public's understanding as to whether joining the words together creates any additional meaning. 

In contrast, in Vanguard, the board had held pretzel crisps to be a compound term, not a phrase, and evaluated the individual terms under the In re Gould standard. The Court of Appeals stated in its discussion that it did not understand why the board analyzed pretzel and crisps separately when the evidence before the board was full of evidence of the public's perception of the term pretzel crisps as a whole.

The Federal Circuit was also troubled that after analyzing the constituent words under In re Gould, the board did not go into any detail into how it also analyzed pretzel crisps as a phrase. The board had simply held that if it had analyzed pretzel crisps as a phrase, then it still would have held it generic because the relevant public would have understood it to be so for pretzel crackers. The Federal Circuit, however, found no evidence that the board had conducted the required step of comparing the board's findings with respect to the individual words to the recorded evidence demonstrating the public's understanding of the combined term.

In sum, therefore, the Federal Circuit panel found that the TTAB had applied the incorrect legal standard and ordered on remand that the board must consider the evidence concerning the relevant public's understanding of pretzel crisps in its entirety. The court's opinion was that the evidentiary record before the board provide significant evidence for it to consider, in the form of declarations, survey evidence, and evidence of use of the phrase in the snack food industry and by the media.

The court also explained that though the board is not required to discuss every piece of evidence put before it, the TTAB cannot simply focus on evidence of what the word crisps means in isolation, then select a few pieces of evidence involving the combined term pretzel crisps, and conclude that the phrase as a trademark is generic. 

The appeals court appeared particularly troubled that the TTAB disregarded Princeton Vanguard's survey evidence without any explanation. Based on its opinion, it seemed that the board felt that the parties' surveys, in essence, cancelled each other out, but the board did not explain why it felt that way. For example, the board did not state that it had any problem with Princeton Vanguard's survey evidence indicating that 55 percent of respondents thought Pretzel Crisps was a brand name and only 36 percent thought it a common name. 

The TTAB's further consideration of this case on remand will be interesting to watch. Will the board simply button up its initial opinion by referencing Princeton Vanguard's evidence but still hold the term pretzel crisps generic? That would seem to comply with the Federal Circuit ruling, but would that be the right thing to do? 

Does the difference between a compound term and a phrase make any legitimate sense? Why does the Court of Appeals maintain these two terms? Where do the definitions of compound term and phrase diverge? Should it even matter? Did the Court of Appeals have it correct before, namely, there should be two standards? Do consumers view phrases differently from compound terms? Have we been trained to do so? 

This case may leave more questions than answers. And regardless of legal analysis, do we really want someone to be able to register a trademark pretzel crisps for pretzel crackers? Or is that, well, a bit crackers?

Originally published on InsideCounsel.com.

This article is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. Brinks Gilson & Lione does not intend to create an attorney-client relationship by offering this information and review of the information shall not be deemed to create such a relationship. You should consult a lawyer if you have a legal matter requiring attention. For further information, please contact a Brinks Gilson & Lione lawyer.

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