Troy & Schwartz Attorneys-At-Law

Background & Current Issues.  Trade secrets have historically been an outlier in the area of intellectual property (IP) law because they have not been viewed as “real” IP.  Today they are being increasingly viewed as valuable IP assets.  Indeed Gene Quinn, one of the most influential IP thought leaders in the U.S., has predicted that trade secrets may pass patents in terms of valuation.

Nevertheless, trade secrets have their own unique challenges and characteristics.  The following lists some of the issues currently comprising the trade secret ecosystem.

1. A weakened patent system resulting from the America Invents Act and subsequent court decisions which have both invalidated patents and impacted the issuance of new patents. Trade secret protection either singularly or in connection with patents may be a viable way to reduce patent invalidation risk and and/or strengthen a patent’s commercial viability over the long term.
2. The explosion of AI and Large Language Models (LLMs). Here the issue pertains to controlling what can and cannot be shared. Where the possibility of divulging copyrighted, patented, or trade secrets as the result of generative AI exists, the resulting output could infringe on intellectual property rights, divulge valuable trade secrets, or breach confidentiality obligations (e.g., the need to protect personally identifiable information or to comply with obligations under an NDA).
3. Remote work and employee mobility. Today, more and more potentially valuable business information is “leaving” the office traveling through space so to speak to remote servers, computers, and the “cloud.”   The locked file cabinet with tightly controlled access of years past is fast becoming a relic, being replaced by systems subject to cybersecurity risks 24/7.   Trade secrets are often viewed as a potential liability by companies due to cyber threats and employee “movement”.
4. The move to eliminate non-competes. The Federal Trade Commission is attempting to regulate non-competes out of existence, and some states already have or are in the process of doing so.
5. A patent document, registered copyright certificate, or registered trademark certificate issued by a government agency provides proof that the associated IP rights actually exist. With trade secrets, however, no government agency is involved in establishing the IP right.  Instead, the trade secret owner is tasked with establishing that the confidential information indeed qualifies as a trade secret.  Proof that a trade secret actually exists is required by the courts in any trade secret misappropriation lawsuit.  Requiring proof of documentation establishing the existence of the trade secret is considered a reasonable measure by the court.
6. Trade secrets are protected under state law and federal law. Damages in a misappropriation case often exceed the damages in patent infringement case.  Europe has largely adapted the trade secret law of the United States and trade secret law is seeing global standardization.

Trade Secrets and Confidential Information. Referring to item #5 above, many still assume that confidential company information automatically qualifies as a trade secret.  Trade secrets of course constitute confidential information, but not all confidential information will qualify as a trade secret.  For example, Florida’s Uniform Trade Secrets Law, largely based on the Uniform Trade Secrets Act, defines “trade secret” as “information, including a formula, pattern, compilation, program, device, method, technique, or process that: “Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means, by other person.”

The unauthorized use of a trade secret is known as misappropriation.  To prevail in a court of law on a trade secret misappropriation claim, the plaintiff must first establish that the misappropriated information is indeed a trade secret and has been handled as a trade secret by the plaintiffs.  Documentary proof is generally the standard required for meeting this requirement.  Contracts such as an employment handbook, NDAs, employee onboarding/exit documentation, trade secret assignment documents, an in-house trade secret policy, etc. are types of acceptable documentation.

Several years ago, the commentator was able to get a motion for summary judgment granted on behalf of the defendants because the plaintiff could provide no documentary proof that he indeed had a trade secret.  Even large companies one would think should know better have lost their trade secret misappropriation lawsuits because of the lack of documentation or poor documentation.  See e.g., California Healthcare Services v. Amgen and Bundy Baking Solutions v. Mallet.  Other helpful factors in establishing trade secrets to the satisfaction of a court include having conducted trade secret audits to evaluate the efficacy of a business’s procedures to protect its trade secrets, using robust cybersecurity efforts, etc.

Non-disclosure agreements (NDAs) can be confusing when it comes to trade secret protection because they are generally limited to protection of exchanged confidential information for a period of only 1 to 3 years following the NDAs’ termination. However, if trade secrets are to be divulged, it is important that any disclosed trade secrets be protected by the receiving party indefinitely and the NDA should state as such.  Otherwise, trade secret protection could be at risk.  Most receiving parties do not want the burden of protecting the disclosing party’s divulged trade secrets indefinitely.   Accordingly, the NDA’s disclosing party should think twice before disclosing a trade secret or insist on adequate provisions in the NDA to protect any divulged trade secrets.

Gearing Up for Trade Secret Protection. Any business, no matter how small, may have valuable trade secret assets which can enhance the business’s value.  A robust trade secret approach may also be attractive to potential venture capitalists and future buyers of the business.   If you aren’t sure is something could be a trade secret, ask yourself the $64,000 question:  What would be the consequences for my business if this confidential information became known by others?

How does one get started in identifying and protecting a trade secret?  Here are some questions to ask to get the process going.

What is the trade secret (e.g., software code, a special recipe, a customer list that the business has spent money and time on developing, certain steps of a manufacturing process requiring tight control, a raw material having “special” requirements, etc.)?

Who will have access to the trade secret (e.g., employee, independent contractor, business partner)?

What documentation should the business have in place to protect the trade secret asset (e.g., employee handbook, code of conduct, onboarding/exit documentation, IP assignment of any developed trade secrets to the business, NDAs, independent contractor agreements, trade secret policy documents, shareholder/partnership/operating agreements, etc.)?

How do we educate employees and independent contractors that it’s a trade secret which must be carefully and diligently protected (e.g., asset notice and acknowledgement documentation)?

How do we train those who require access to the trade secret to protect the trade secret (e.g., ensure they know it’s a trade secret)?

How do we monitor the interaction between those who have access and the frequency of interaction (e.g., by maintaining a privilege or access log which states the people who have access, how the access is provided, and have them document the dates on which they accessed the trade secret)?

Getting Started with a Legal Advisor.   In conclusion, every business, no matter how small, should be looking into trade secrets as a valuable asset, meaning one which can be monetized and form a part of an IP portfolio.   Contact Susan at Troy & Schwartz (305-279-4740) to request a complimentary copy of her trade secret implementation checklist and work with her to perform a trade secret audit, create appropriate documents, etc. or to represent you in trade secret misappropriation matters.  As an IP attorney who practices patent, trade secret, trademark, and copyright law, she is uniquely qualified to address best practices for procuring, monetizing, and enforcing IP rights.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL, THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

© 2023 by Troy & Schwartz, LLC

The Moral of the Blog:   Perhaps one of the most misunderstood requirements for obtaining and maintaining the registration of a service or trademark is that the mark’s recited services/goods must be being offered in commerce to maintain a viable registration.  Otherwise, the registered mark is subject to cancellation by the USPTO as this blog discusses.

A Little Personal Background.  Wolfie Cohen’s Rascal House, once located in Sunny Isles, Florida, was one of my late mother-in-law’s favorite restaurants.  Despite her background as a famous dress designer in the 1950s and 1960s who introduced petite-sizing to the fashion world, she never stopped enjoying the food she grew up with in New York City where her stellar career was launched.   The commentator still has fond memories of family lunches at this restaurant last century where the tween kids would try and outdo each other with grossness much to the chagrin of their elegant grandmother.

Introduction. Rascal House (located in Boca Raton, Florida) and Wolfie Cohen’s Rascal House (both word marks) and Wolfie Cohen’s Rascal House (design mark) are registered service marks owned by Jerry’s Famous Deli, Inc.  All three Registrations recite services for “restaurants and carry-our restaurant services.”   All three registrations were renewed by the 6th, 10th, and the 20th year of registration.   The renewals were based on the Registrant’s submission of specimens ostensibly showing use of the marks in commerce consistent with the Registration’s recited services.

A critical tenant of trademark law is that a registered trademark must be used in commerce.  Once registration is granted, the submission of renewal documents known as declarations 8 are periodically required to establish continued usage.  Registered trademarks will be cancelled by the USPTO for failure of the Registrant to renew the registration by the timely submission of these declarations.

Registered trademarks may also be cancelled as the result of cancellation proceedings brought by third parties before the Trademark Trial & Appeal Board (“Board”).  One of the grounds for cancellation is non-use/abandonment of the registered mark as discussed in the Sept. 30, 2023 opinion by the Board in Rascal House, Inc. v. Jerry’s Famous Deli, Inc.   Here, Rascal House, Inc. (“Petitioner”) filed petitions to cancel all three of the registered “Rascal House” marks alleging abandonment of the marks when the last of the two Rascal House restaurants closed its doors in 2008.  The TTAB consolidated the proceedings and bifurcated the case into two stages.  This first stage, which this blog discusses, addressed the issue as to whether the Respondent (Jerry’s Famous Deli, Inc.) had abandoned the marks.

Registrations are presumed valid under the law, and a party seeking cancellation bears the burden of providing abandonment.  The cancellation standard is preponderance of the evidence.  For cancellation on the basis of abandonment, Section 45 of the Lanham Act requires that “usage of the mark has been discontinued with intent not to resume such use.  Non-use for 3 consecutive years shall be prima facia evidence of abandonment.”   The Act defines “use” of the mark as bona fide use of the mark in the ordinary course of trade, and not merely to reserve a right in the mark. For service marks, a mark is used in commerce on services when (1) when it is used or displayed in the sale or advertising of services; and (2) the services are rendered in commerce.  Accordingly, mere display of the mark is insufficient to establish use unless the associated services, in this case, restaurant services, are actually being rendered.

In Rascal House, the Respondent relied on its on-going usage of specimens showing the marks after the two Rascal House restaurants  closed in 2008.  The problem with this argument is that the Respondent merely displayed the specimens at its other establishments including Miami’s Epicure Market and at a California restaurant bearing the name Jerry’s.  According to the Respondent’s own corporate representative, the usage of the marks was intended to cause customers to associate the Respondent’s non-Rascal House businesses with the Rascal House restaurants.   That is, to take advantage of Rascal House’s iconic brand to “associate what they are getting [at the Respondent’s businesses] with the Rascal House.”

As the Board pointed out, such a display would have constituted legitimate advertising of the Rascal House restaurants had the restaurants still been open. The restaurants could have been located anywhere.  However, the Respondent’s display of the registered marks did not constitute rendering of the services recited in the Registrations.  At most the usage “constituted an attempt to take advantage of residual good will in a past [local] iconic brand with services rendered under other brands such as JERRY’S or EPICURE.   Residual goodwill will does not negate a finding of abandonment based on non-use.”

Not surprisingly, the Board found that the RASCAL HOUSE marks were abandoned and emphasized what the Federal Circuit had stated in Imperial Tobacco Ltd. v. Phillip Morris: “The Lanham Act was not intended to provide a warehouse for used marks.”

The Board will next determine if the Respondent had an intent to actually use the marks.  Based on the testimony of the corporate representative in stage 1 of the proceedings and the facts of the case, the commentator believes that the marks will be cancelled.  This is because the restaurants have been closed since 2008 or far beyond the three (3) years which the law implies may be a reasonable period of non-use to prevent cancellation, e.g., where the business had supply chain issues or was confronted with events that affected its business operations such as a fire.

Discussion.  The commentator is a stickler for ensuring that a registration’s recited services/goods are indeed being offered in interstate commerce at the time of registration and when renewal declarations are filed. The USPTO cannot verify that every piece of information provided to it is true and accurate.  It depends on the forthrightness of the filing attorney and registrant to be truthful.  Moreover, when working with clients who are considering purchasing a registered mark as part of an asset acquisition, the commentator always reviews the prosecution and renewal history of the registered mark(s) to ensure there are no red flags concerning the registration status of the mark which could make it susceptible to cancellation.

With the “Rascal House” marks’ renewal documentation, the documentation filer was representing that the marks were still being used in commerce (i.e., the restaurant services were being provided) when in fact they were not after 2008.  Although the marks were renewed by the USPTO, the situation caught up with the Registrant when a cancellation proceeding was filed in 2020.

It should be noted that defendants in a trademark infringement lawsuit involving a registered mark may also seek cancellation of the registered trademark by the court.

Take Home Point:  A registered mark is only as “good” as its usage status in commerce.  Use it or lose it so to speak.

In Need of Legal Counsel on Trademark Matters? Trademark law is a complex area of the law.  Contact Susan at 305-279-4740 for all matters related to trademark law from registration to proceedings before the Trademark Trial & Appeal Board and courts of law.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL, THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

© 2023 by Troy & Schwartz, LLC

Recently, numerous news publications have rather gleefully reported that the Sussexes (a/k/a Harry and Meghan) intent-to-use trademark application for the word mark ARCHETYPES has been rejected by the USPTO due to the likelihood of confusion with a previously registered mark.  The rejection has been viewed by many as a deserved comeuppance for the couple’s actions since leaving England’s royal family.

Quite apart from one’s personal opinions of the Sussexes, trademark law is trademark law.    This blog discusses the USPTO’s rejection of the ARCHETYPES mark to emphasize the factors that the examining attorney relied on to reach her likelihood of confusion conclusion.  The rationale for her rejection is instructive for those who are considering seeking registration of a trademark which is very similar to already existing registered mark(s).   In particular, it is important to note that the applicant’s and registrant’s specified goods/services need not be identical for a likelihood of confusion finding by the USPTO.

1. Actual Status of the Application

The news headlines have not been totally accurate regarding the status of the ARCHETYPES mark.  The USPTO has issued only an initial rejection, not a final rejection of the mark.  The initial rejection was on January 18, 2023.  The applicant has until July 18^th to respond to the initial rejection.  If the USPTO’s examining attorney finds that the response overcomes her initial rejection, the application will receive a Notice of Allowance.  After filing a Statement of Use which meets the USPTO’s requirements, the mark will then be registered.

On the other hand, if the examining attorney issues a final rejection, Archewell Audio will have the right to appeal the USPTO’s decision to the Trademark Trial and Appeal Board (TTAB ) and/or through federal courts of law.  It is noted that the Trademark Trial & Appeal Board’s (TTAB) affirmance rate of examining attorneys’ final rejections is 95%.   Accordingly, Archewell Audio will likely have a difficult road ahead to obtain registration of the ARCHEWELL mark.

2. The Lack of the Applicant’s Verification Signature in the Application

The application, filed by an attorney, was cited by the examining attorney for being unsigned.  As such, neither Archewell Audio’s authorized representative nor its attorney ever verified certain statements that must be verified in every application.  Why not?  This failure is an example of sloppiness on the part of the attorney representing Archewell Audio. Either that or Archewell Audio’s authorized representative or its attorney (based on personal knowledge) was unwilling to attest to the following:

The applicant has a bona fide intention to use the mark in commerce and had a bona fide intention to use the mark in commerce as of the application filing date; the applicant believes applicant is entitled to use the mark in commerce on or in connection with the goods and service specified in the application; that to the best of the signatory’s knowledge and belief, no other persons, except, if applicable, concurrent users, have the right to use the mark in commerce either in the identical form or in such near resemblance as to be likely, when used on or in connection with the goods/services of such persons, to cause confusion, mistake, or to deceive, and that the facts set forth in the application are true.

3. The Examining Attorney’s Likelihood of Confusion Analysis

Archewell Audio’s application (SN 97332048) included lengthy listings under both: 1) Class 9 for downloadable audio recordings, podcasts, webcasts, all in the fields of cultural treatment of women and stereotypes facing women; and Class 41 for entertainment service, namely, an ongoing podcast series in the field of cultural treatment or women and stereotypes facing women.

In finding likelihood of confusion, the examining attorney relied on registration no. 5481385, also for the mark ARCHETYPES.  The registration date was May 29, 2018 and its first use in commerce was in 2012.  The registration specifies services under Class 41: Providing a website featuring blogs and non-downloadable publications in the nature of articles in the field(s) of nutrition, fitness, sexuality, psychological self-improvement, personality identification and matching, personal relationships and dating, spiritually, horoscopes, and astrology, fashion, music, and reviews and recommendations for books.

A.  The Two Marks are Commercially Identical.

The examining attorney first compared the marks, finding them to be identical in nature and in commercial impression.  Accordingly, the marks were found to be confusedly similar just in looking at them, thereby engendering the same connotation and overall commercial impression.  This means that consumers would be confused as to just who is providing the goods and/or services – the applicant or the registrant.

B.  Archewell Audio’s Services Encompass the Registrant’s Services.

Next, the examining attorney compared the goods/services to determine whether they are similar, commercially related, or travel in the same trade channels.  Under trademark law, it is important to understand that the goods and/or services need not be identical or even competitive to find a likelihood of confusion.   Importantly, they need only be “related in some manner and/or if the circumstances surrounding their marketing are such that they could give rise to the mistaken believe that the goods and or services emanate from the same source.”

The examining attorney noted the broad wording of Archewell Audio’s application to describe podcasts, downloadable and pre-recorded goods in Class 9 as well as ongoing podcast series, television series, and related services in Class 41.  She concluded that the reference to services in the “fields of cultural treatment of women stereotypes facing women” encompasses all of the goods and services of the types described for the registered mark in the field of sexuality, personality, identification, personal relationships, dating, spirituality, and related topics.   This is so even though the registered mark is for blogs and non-downloadable publications but not podcasts.

C.  Podcasts and Blogs May Emanate from a Single Source Under a Single Mark Thereby Leading to Confusion.

Here, the examining attorney relied on third-party registrations to establish that blogs and podcasts on issues facing women are of a kind that may emanate from a single source under a single mark.  The examining attorney did not interpret Archewell Audio’s reference to “cultural treatment of women and stereotypes facing women” as sufficient to distinguish its goods/services from the registrant’s services.

Additionally, the examining attorney provided evidence to establish that today it is common for bloggers to produce podcasts.  This means that the same entity commonly produces or provides the relevant goods/services (podcasts/blogs) and markets the goods/services under the same mark.  Accordingly, Archewell Audio’s and the registrant’s goods are considered related for likelihood of confusion purposes.

4. Conclusions

It is not known whether Archewell Audio actually conducted a trademark search prior to filing the application to evaluate non-registration risks.  If not, why not?  Did their attorney provide any cautionary guidance?  If so, perhaps the attorney and her clients thought that the specific reference to the cultural treatment of women and stereotypes facing women would be sufficiently limiting to overcome a likelihood of confusion analysis with registration no. 5481385 for the same mark.   Also that podcasts and blogs are not related goods. The examining attorney concluded otherwise for the reasons discussed above as supported by numerous TTAB and court decisions.

The above discussion shows that there is much more to a likelihood of analysis than meets the eye, especially where the applied-for mark provides the same overall commercial impression. It is also important to understand how technology can “transform” a good/service into a more modern version of the good/service.  For example, blogging transformed the content communication highway.  No longer is content reserved for written publications such as hard-copy journals or magazines.  And thanks to platforms such as Spotify and Apple, podcasts are now hugely popular.   Consistent with the examining attorney’s opinion that a blogger is often a podcaster, the author receives emailed blogs from some her favorite podcasters.

Also puzzling is the fact that Archewell Audio’s application was not properly signed.  Why not? It is not clear how the USPTO even accepted an unsigned application through its electronic filing system.  The author has never filed an unsigned/unverified application.  Procedures are in place for electronically sending the application to the applicant’s authorized representative for the verification signature.

5. Where Do the Sussexes Go From Here?

Whether or not the mark is approved for registration remains to be seen presuming a response to the examining attorney’s office action is filed.   Based on the likelihood of analysis factors relied on by the examining attorney as discussed above, it appears that registration of the Sussex’s ARCHETYPES mark is highly unlikely.  If a response is not filed, the application will become abandoned.

One option available to Archewell Audio is to seek a consent or coexistence agreement with the owner of the registered mark, an Arizona limited liability company.  If the registrant agrees, the USPTO will still need to approve the agreement before granting registration.   Click here for a blog on requirements for such an agreement from the USPTO’s perspective.

Finally, since their application was filed, Spotify has cancelled the Archetypes podcast.  If the USPTO grants a Notice of Allowance on this intent-to-use application, Archewell Audio will need to demonstrate the mark is in use to progress to actual registration of the mark.

In Need of Legal Counsel on Trademark Matters?

Trademark law is a complex area of the law.  Contact Susan at 305-279-4740 for a complimentary consultation on all trademark law matters from registration to matters before the Trademark Trial & Appeal Board to enforcing your trademark rights in court.

Thank you for your interest in this blog.  As usual the content is for informational purposes only and is not legal advice.   

© 2023 by Troy & Schwartz, LLC

Selecting a company name or a name for a new product is no easy task.  Both types of names have the potential to become the company’s valuable intellectual property assets, i.e., valuable brands.  A haphazard name selection process, however, may result in legal problems and/or prevent registration of the name as a trademark or service mark with the United States Patent & Trademark Office.  Clearly the last thing a new startup needs is a legal dispute involving the alleged infringement by its product name or company name of someone else’s registered trademark.   Also, the “wrong” name may well prevent its registration as a trademark or service mark.  Registered marks generally have substantially more value than unregistered marks.

Anybody who has been involved in a lawsuit understands that they are costly, stressful, and can take on a life of their own.  A registered trademark owner may of course give you the chance to comply with an initial cease and desist letter.  However, the company’s compliance will generally require it to stop using the mark and transfer any domain name rights, etc.  The upshot?  The company will have to start over in the branding process.

The following tips are intended to get your company off and running with a viable company and/or product name.

1. Do a Google search on the name to see what other companies may already be using the same or a similar name.
2. Do a search of your state’s corporate or limited liability company records in the states where the company will do business to see if anyone is using the same or similar name. Also check the state’s registered trademark records since some companies do obtain state-registered marks.  For Florida, this information can be found here.
3. Do a search of the U.S. Patent & Trademark Office (USPTO) for federal trademark registrations of your proposed company/product name. Do not think that merely changing a letter in your proposed name or reversing the order words in a multi-word work will save you from a legal dispute with the owner of the registered mark or prevent trademark registration issues.  Clearly if you plan to file a trademark registration application for your company/product name with the USPTO, you should select a name that has a solid chance of meeting the USPTO’s trademark registration requirements.  This means that your mark must not be confusedly similar to a registered mark, generic, or merely descriptive of the goods or services provided under the mark.
4. Do a search of domain name registrar websites such as GoDaddy.com to see if the domain name you want is available. Not only are domain names a necessity in today’s e-commerce world, but domain names also may have associated trademark rights.  Therefore, a minor change in the registered domain name, e.g., by registering the plural form (ABCS) of the registered domain name (ABC) could result in a trademark dispute.   The registration of a dot com domain name in particular could signal potential trademark issues.
5. The best company/product name is one that is distinctive and memorable for both branding purposes and obtaining valuable registered trademark rights.
6. Come up with at least three names you like and get the reactions of trusted individuals.
7. If you plan to have a logo designed, ensure that there is a contract in place assigning all of the logo creator’s intellectual property rights to your company.
8. If you are a non-US company planning to expand into the United States, note that US trademark law will apply to you.  In the United States, common law trademark rights are recognized.  Additionally, trademark registration requires usage of the mark in interstate commerce at the time of registration.
9. Watch out for cultural implications involving your mark if you plan to register it in other countries.
10. Consult with an intellectual property law attorney up front to avoid costly problems.  A good attorney will discuss potential problems with your proposed names.   A thorough mark knockout search should also be considered.

We are proud of the legal services we provide to our business and entrepreneurial clients on all matters related to intellectual property law including trademark law.  Contact us at 305-279-4740 to discuss your questions on trademark law matters.   Doing things right the first time in selecting a company/product name and building your brand could save you some real legal headaches and a lot of money down the road.  

Troy & Schwartz, LLC

Attorneys-at-Law

Miami, Florida  (305) 279-4740

Where Legal Meets Entrepreneurship™

This blog is for informational purposes only and does not constitute legal advice.

© 2023 by Troy & Schwartz, LLC

Introduction

Last week’s blog provided information on the Supplemental Register as part of its discussion on the Trademark Trial & Appeal’s Board’s refusal to register the generic mark FELATI on even the Supplemental Register.  That blog briefly referred to the fact that merely descriptive marks may be registered on the Principal Register if: 1) they are found to be suggestive rather than merely descriptive; or 2) have become distinctive.  Otherwise, merely descriptive marks may be registered on the Supplemental Register.  For registration on either register, the examiner must have concluded that there is no likelihood of confusion with an existing registered mark.

This blog goes into depth as to what constitutes a merely descriptive mark by discussing the Board’s affirmance of the examining attorney’s Section 2(e)(1) refusal to register the proposed word mark SMART BEZEL.  In re Zuma Array Limited, 2020 USPQ2d 736 (TTAB 2022) [precedential]. The opinion is instructive because it is a reminder that a proposed mark that describes the intended use or purpose of the goods may be a merely descriptive mark.  In other words, the definition of a merely descriptive mark is not confined to those marks which merely describe a characteristic of the specified goods or services, e.g., CHUNKY CHOCOLATE for ice cream.

Discussion

 Section 2(e)(1) of the Trademark Act, 15 U.S.C. § 1052(e)(1), prohibits registration on the Principal Register of “a mark which, (1) when used on or in connection with the goods of the applicant is merely descriptive . . . of them,” unless the mark has acquired distinctiveness under Section 2(f) of the Lanham Act, 15 U.S.C. § 1052(f).  A merely descriptive mark which has acquired distinctiveness according to the USPTO’s requirements may file for registration of the mark on the Principal Register under Section 2(f).  If the mark is instead registered on the Supplemental Register, the registrant may later seek registration on the Principal Register if and when the merely descriptive mark acquires the required level of distinctiveness for such registration.

Here the Applicant’s identified goods under IC class 009 were for “electronic sensor modules for controlling and integrating home automation systems, including lighting and thermal control apparatus, energy control devices and household appliances, smart plugs, smart sockets for electric lights, electronic appliances and smart switches, audio and loudspeakers, alarms, and other security control apparatus and home monitoring equipment; electronic sensor modules for controlling and integrating smart lighting systems and smart heating systems; component parts and fittings for the aforesaid goods.”

In rejecting the mark SMART BEZEL on merely descriptive grounds, the examining attorney relied on: 1) the dictionary definition of the adjective “smart” in this context as using a built-in microprocessor for automatic operation, for processing of data, or for achieving greater versatility;” a dictionary definition of the word “bezel” as the “outer frame of a computer screen, mobile phone, or other electronic device;” and an article about a patent held by Apple where the article states the invention enabled Apple to create a “smart bezel.”  Slip opinion @ 2.  The Applicant acknowledged that “smart” is defined as “using a built-in microprocessor” and the word “bezel” refers to “the outer frame of a computer screen, mobile phone or other electronic device.” However, it also asserted, “none of the applied for goods … feature a ‘bezel’ at all.”     The Examining Attorney, on the other hand, maintained that the proposed mark immediately conveys information about the goods because Zuma’s sensors are designed to be incorporated into the bezels of various electronic appliances and lighting and heating systems, “to render the bezels … capable of performing automatic operations for processing data or achieving greater versatility.”

The Board discounted the Applicant’s argument, finding the mark to be descriptive of a use or purpose of the goods’ modules, and thus ineligible for registration without proof of acquired distinctiveness.  In reaching its conclusion, the Board took a somewhat different tack by focusing on the nature of the Applicant’s “electronic sensor modules.”  First, the Board took judicial notice that a “module”  is “a usually packaged functional assembly of electronic components for use with … other assemblies.”  Second, the Board then relied on the wording in the Applicant’s own website to conclude that the proposed mark, by describing the intended use or purpose of the goods with which it is used, is merely descriptive.  For example, the Applicant’s website states that “swap[ping] out a standard bezel for a Smart Bezel (TM)” enables homeowners to access a wide range of built-in sensors to support environmental, presence and life safety operations.”  Slip opinion at 15.  Citing precedent, the Board emphasized that “[P]roof of mere descriptiveness may originate from [the] applicant’s own descriptive use of its proposed mark,  or portions thereof” in its materials and “an applicant’s own website and marketing materials may be  . . . ‘the most damaging evidence’ in indicating how the relevant purchasing public perceives a term.’”  Slip opinion at 14.

Accordingly, the Board concluded that the word BEZEL refers to the type of device on which Zuma’s sensors will be used.  The commercial context of Applicant’s use of its proposed mark on its website “demonstrates that a consumer would immediately understand the intended meaning of” SMART BEZEL for electronic sensor modules, namely, that the modules are used to create a “smart bezel.”

The commentator notes that the Applicant should now have the option of seeking registration on the Supplemental Register.

Take Home Points

1. Trademark law is complex. As this decision demonstrates, a merely descriptive analysis involves an evaluation of whether the proposed mark describes a particular characteristic of the specified goods/services and/or the intended usage of the proposed mark.  Many applicants are focused on a likelihood of analysis rejection and not familiar with other types of registration rejections.  Accordingly, a proposed mark that is not rejected on likelihood of confusion grounds may still be rejected on merely descriptive or generic grounds as the Zuma Array decision demonstrates.
2. The USPTO may look beyond the Principal Register other registered marks to ascertain whether a mark is merely descriptive. Here, the examining attorney and the Board used dictionary definitions, a patent document, and the Applicant’s own website to find that the mark was merely descriptive.
3. Interestingly there was no evidence that third parties were descriptively using “smart bezel” for the application’s specified goods. Although such proof can be highly relevant to a merely descriptive analysis, such lack of proof was of no consequence in the Zuma Array decision.  “The fact that Applicant may be the first or only user of a term does not render the term distinctive if, as here, it has been shown to be merely descriptive of the goods identified in the application.”  Slip opinion at 12.  The commentator notes that Applicant may be able to establish distinctiveness in the future by, e.g., by providing satisfactory evidence that the consumer has come to associate the mark with the Applicant as the provider of the goods.

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