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Federal Circuit Makes It Tougher on Coke to Protect Its ZERO Brand Name

On June 20, 2018, the Federal Circuit held that the Trademark Trial and Appeal Board ("the Board") applied the wrong legal framework in determining the genericness of a number of The Coca-Cola Company's ("Coca-Cola") registered trademarks incorporating the term ZERO. The court vacated the Board's decision, and remanded the case back to the Board for further proceedings consistent with its ruling.
June 25, 2018

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By Alexander Antonio

On June 20, 2018, the Federal Circuit held that the Trademark Trial and Appeal Board ("the Board") applied the wrong legal framework in determining the genericness of a number of The Coca-Cola Company's ("Coca-Cola") registered trademarks incorporating the term ZERO. The court vacated the Board's decision, and remanded the case back to the Board for further proceedings consistent with its ruling.

The case, Royal Crown Co. v. Coca-Cola Co., originated with Royal Crown Company, Inc. and Dr Pepper/Seven Up, Inc. (together, "Royal Crown") opposing the registration of multiple Coca-Cola marks incorporating the term ZERO, claiming, among other things, that the marks were generic.

Multiple companies market beverages bearing ZERO. Royal Crown sought trademark protection for the terms DIET RITE PURE ZERO and PURE ZERO, but disclaimed the term ZERO apart from the marks as a whole. Coca-Cola has registered trademarks for seventeen terms using ZERO, including COCA-COLA ZERO, COKE ZERO, and SPRITE ZERO. However, Coca-Cola refused to disclaim ZERO from its marks, stating that the term ZERO had "become distinctive of the applicant's goods in commerce" and therefore eligible for trademark protection, pursuant to Section 2(f) of the Lanham Act, 35 U.S.C. § 1052(f).

A term cannot be afforded trademark protection if it is deemed to be generic. In determining whether a term is generic, a court must perform a two-step inquiry. First, a court must determine the relevant genus of the goods or services at issue. Second, a court must determine if the term sought to be registered is understood by the relevant public primarily to refer to that genus of goods or services. H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., 782 F.2d 987, 990 (Fed. Cir. 1986).

In this dispute, the parties disagreed on the relevant genus of goods for the term ZERO. Coca-Cola argued that it was a broad genus comprising "soft drinks, sports drinks, and energy drinks." The Board agreed with Coca-Cola's interpretation of the genus of the goods. The Board then considered whether the term ZERO was understood by the public to refer to the genus of soft drinks, sports drinks, and energy drinks, generally. The Board found that there was no evidence to support that the public primarily understood ZERO to refer to the genus of such goods. Accordingly, the Board found that the term was not generic and qualified for trademark protection.

Royal Crown appealed the Board's decision to the Federal Circuit, claiming that the Board was too broad in deciding the genus of goods for the term. The court agreed with Royal Crown, and found that the Board had used the wrong legal standard in determining the genus of goods for the term ZERO.

Citing prior precedent, the court explained that "a term can be considered generic for a genus of goods or services if the relevant public . . . understands the term to refer to a key aspect of that genus." In re Cordua Rests., Inc., 823 F.3d 594, 603 (Fed. Cir. 2016). Put another way, a term can still be generic even if the public only understands the term as referring to a particular sub-group of a genus of goods. Id. at 605. According to the court, the Board had failed to consider if ZERO was considered generic to a key aspect of the genus of soft drinks. The key aspect, or sub-group, of the genus of soft drinks being soft drinks with few or no calories or carbohydrates. ("zero-calorie soft drinks").

The court explained that the proper analysis for determining the genericness of ZERO was whether the term was generic for the sub-group of zero-calorie soft drinks. The court remanded the case to the Board to decide this issue.

Commentators have compared Coca-Cola's quest to claim ZERO to Miller Brewing Company's unsuccessful attempt to claim LITE or LIGHT in association with low-calorie beer in the 1970s. Coca-Cola has significant hurdles that it must overcome at the Board to keep its marks protected and ensure a fate different from that of the brewing giant. In particular, Coca-Cola must convince the Board that ZERO is not understood by the relevant public primarily to refer to soft drinks with few or no calories or carbohydrates. This will be more difficult than the burden in the first case, i.e., to convince the Board that ZERO is not understood by the relevant public primarily to refer to, more generally, soft drinks, sports drinks, and energy drinks.

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