Trademark case remanded over distinctiveness

A long-running trademark battle should be remanded because the evidence failed to prove that a proposed mark was not generic, the 4th U.S. Circuit Court of Appeals has decided in agreeing with the lower court’s rejection of the parties’ stipulation of distinctiveness.

The parties agreed that the mark was inherently distinctive and presumptively valid. Because they refused to develop the record, the District Court relied on the existing evidence to conclude that the mark was generic and could not be registered.

Although the trial court correctly held that the parties needed to prove non-genericness, Circuit Judge Robert B. King said the panel found there was not enough evidence “on which the district court could make any proper finding of genericness or distinctiveness at all.”

Joined by U.S. District Court Judge Gina M. Groh, on designation from the Northern District of West Virginia, the panel vacated and remanded Moke America LLC v. Moke International Limited (VLW 025-2-010) for further proceedings.

In a dissent, Judge Julius N. Richardson disagreed that the mark’s distinctiveness was uncertain.

“A proper view of the evidence, shorn of conceptual confusion, shows no support for the notion that ‘Moke’ is generic,” Richardson said.

Fair policy concern

Moke USA and Moke International were represented by New York City lawyers Craig S. Mende and Andrew Nietes, along with Maya M. Eckstein and Trevor S. Cox, of Hunton, Andrews, Kurth in Richmond.

Counsel for Moke America were David S. Brafman, J. Andre Cortes, Mark D. Passler and Ryan C. Williams, of Washington, D.C., and West Palm Beach, Florida.

None of the attorneys involved responded to requests for comments.

“There’s a very good argument that use of residual goodwill is potentially unfair competition or false advertising. That’s a very valid policy concern, and I think there needs to be more law on it, but I don’t think the route to get there is necessarily genericness.”

— Lucy Jewett Wheatly, Richmond

But Lucy Jewett Wheatly, who leads the intellectual property practice group at McGuireWoods in Richmond, said genericness is normally treated as an affirmative defense to an infringement claim.

“If the mark is an English language word which doesn’t mean anything connected to the product at issue, the inquiry ends on that point, and if somebody disagrees, they have to put forward evidence that it’s generic,” she said.

Wheatly said she agreed with the 4th Circuit’s consideration of public policy in the case: Should people be allowed to scoop up an abandoned brand and present to the public that they are tied to the original when in fact they are not?

“There’s a very good argument that use of residual goodwill is potentially unfair competition or false advertising,” she said. “That’s a very valid policy concern, and I think there needs to be more law on it, but I don’t think the route to get there is necessarily genericness.”

Failed opposition

After the U.S. Patent and Trademark Office published the MOKE mark owned by an entity related to Moke International and Moke USA, Moke America filed a notice of opposition and claimed priority of use.

Moke America’s opposition failed, but no question of genericness was raised by the PTO, and  the MOKE mark remains pending and unregistered.

In District Court, Moke America declared its ownership of the MOKE mark and asserted a trademark infringement claim against Moke International and Moke USA, which filed similar counterclaims.

Despite the parties’ stipulation of the MOKE mark’s distinctiveness, the trial court found a compelling argument that the mark had succumbed to genericide – when an inherently distinctive mark becomes generic due to the public’s pervasive use.

The District Court relied on the existing evidence to find that MOKE was a generic term that could not be trademarked.

All parties appealed.

Non-genericness

King agreed with the trial court’s conclusion that the parties needed to prove non-genericness to resolve their competing trademark ownership and infringement claims.

“In the words of the Second Circuit’s Reese [Publ’g Co. v. Hampton Int’l Commc’ns] decision invoked by the district court, the burden to prove the validity and protectability of an unregistered mark ‘necessarily implies that [the party claiming ownership] must bear the burden of proving that [the proposed] mark is not generic,’” King wrote.

Whereas that burden may be satisfied by evidence that a mark is inherently distinctive, King pointed out that “it is not so simple where, as here, there is reason to question whether the mark began as inherently distinctive but is now generic as a result of ‘genericide.’”

Relying on Murphy Door Bed Co. v. Interior Sleep Systems, Inc., the parties contended that they were only required to prove non-genericness if there was reason to believe that the mark had always been a generic term, not if there was suspected genericide.

King was unpersuaded by the parties’ case law, as well as their stipulation of distinctiveness.

“We reject the parties’ contention as contrary to the general rule that, in ‘its role as the evidentiary gatekeeper, a district court need not accept stipulations between parties,’” he said.

“Moreover, we reject the parties’ contention for being incongruous with the court’s role in protecting third-party interests and preventing generic terms from being expropriated ‘from the public “linguistic commons,”’” he added.

Evidentiary record

The parties maintained that MOKE had always been an inherently distinctive mark, and they criticized the District Court judge’s emphasis on policy considerations as erroneously conflating appropriation of an abandoned mark with genericness.

“Even accepting that the existing evidentiary record sufficiently establishes that MOKE began as an inherently distinctive mark and that it was originally owned but later abandoned by BMC, the record leaves too many other questions unanswerable by a preponderance of the evidence,” King said.

Further, he recognized that abandonment of a once inherently distinctive mark does not foreclose the possibility that the mark has, at some point, become generic by way of genericide.

But King agreed with the trial court’s recognition of the public policy involved here.

“Put succinctly, for the sake of Moke America, Moke International and Moke USA, other sources of similar vehicles and the public at large, it is crucial that the district court have enough evidence before it to get any finding of genericness or distinctiveness right,” he noted.

The panel remanded the case for the parties to prove that the MOKE mark was not generic and suggested that the District Court appoint a disinterested expert witness

“We further note that, if on remand the parties yet again fail to prove non-genericness by a preponderance of the evidence, the court should consider whether it is appropriate to adhere to its finding that MOKE is a generic term, or to stop short of such a finding and thus leave genericness an open question,” King wrote.