In Royal Crown Company, Inc. v. The Coca-Cola Company, [2016-2375] (June 20, 2018), the Federal Circuit vacated the TTAB’s dismissal of Royal Crown’s opposition to Coca-Cola’s registration of various ZERO marks for soft drinks and sports drinks including the term ZERO.

Noting that Royal Crown did not offer direct consumer evidence (surveys or testimony), nor did it offer dictionary evidence linking ZERO to soft drinks, offering only indirect evidence of competitor use of ZERO, the Board concluded that Royal Crown had failed to demonstrate that ZERO is generic for the genus of goods.  On the issue of descriptiveness, the Board found the evidence, including a five year old survey, indicated that ZERO had acquired distinctiveness.

On appeal, the Federal Circuit concluded that the Board erred in its legal framing of the genericness inquiry in two ways: it failed to examine whether ZERO identified a key aspect of the genus at issue, and it failed to examine how the relevant public understood the brand name at issue when used with the descriptive term ZERO.

The Federal Circuit further found that that the Board should have first assessed the level of the marks’ descriptiveness before determining whether Coca-Cola had shown acquired distinctiveness, because absent such a finding, it would not be possible to review whether the evidentiary record can support a finding of acquired distinctiveness.

On genericness, the Federal Circuit said the critical issue was whether members of the relevant public primarily use or understand the term sought to be protected to refer to the genus of goods or services in question.  The Federal Circuit said that evidence of the public’s understanding of the term may be obtained from any competent source, such as purchaser testimony, consumer surveys, listings in dictionaries, trade journals, newspapers and other publications.

The Federal Circuit found the Board’s approach erroneous, asking the wrong question in assessing the alleged genericness of ZERO.  The Federal Circuit said the Board’s approach failed to consider that a term can be generic for a genus of goods or services if the relevant public understands the term to refer to a key aspect of that genus.  The test is not just whether the relevant public would use the term to describe the genus, but also whether the relevant public would understand the term to be generic.  A term is generic if the relevant public understands the term to refer to part of the claimed genus of goods or services, even if the public does not understand the term to refer to the broad genus as a whole.

The Federal Circuit found that the Board failed to consider whether the relevant consuming public would consider the term ZERO to be generic for a subcategory of the claimed genus of beverages, i.e., the subcategory of the claimed beverages encompassing the specialty beverage categories of drinks with few or no calories or few or no carbohydrates.

The Federal Circuit remanded so that the Board could examine whether the term ZERO, when appended to a beverage mark, refers to a key aspect of the genus.  The Court said ZERO need not be equated by the general public with the entire broad genus in order for the term to be generic.

On acquired distinctiveness, the Federal Circuit said that Board erred by failing to first determine exactly what Coca-Cola’s burden was.  An applicant’s burden of showing acquired distinctiveness increases with the level of descriptiveness: a more descriptive term requires more evidence of secondary meaning.  However, the Board did not make any finding as to the degree of descriptiveness conveyed by the term ZERO in the marks and, thus, did not assess Coca-Cola’s evidence through an exacting lens.