Thursday, August 19, 2010

Deceptive place name not material

Guantanamera Cigar Co. v. Corporacion Habanos, SA., Civil Action No. 08-0721, 2010 WL 3035750 (D.D.C. Aug. 5, 2010)

The district court found, among other things, that the TTAB erred in finding that the term GUANTANAMERA for cigars not made in Cuba was deceptive and thus unregistrable, because it didn’t sufficiently support its materiality finding. The goods-place association was clear; the TTAB’s reasons for finding materiality were (1) Cuba’s “renown and reputation for high quality cigars” and (2) the plaintiff’s subjective intent to deceive customers evidenced by previously placing “Guantanamera, Cuba” and “Genuine Cuban Tobacco” on the packaging. The district court rejected the first reason because in a previous case decided by the Federal Circuit, Moscow’s renown for vodka was not sufficient. The second reason was that the applicant’s subjective intent “provides little, if any, insight into the minds of consumers. Consumers could have numerous reasons as to why they purchase Guantanamera cigars…. [T]he Court does not consider extraneous and out-dated marketing material particularly relevant in determining a mark’s ability to satisfy the §1052(e)(3) registration bar.”

I agree with John Welch that this ruling leaves unclear what, if anything, would count as a material deception, especially since many Americans are probably not aware of a lot of place names in Cuba that they more clearly recognize as a source of cigars or tobacco. I’m particularly surprised by the disregard for deliberate deceptiveness on the packaging, even if that was later eliminated because it was fraudulent—that tells us a lot about what the applicant wanted consumers to believe, and it’s pretty standard to presume that an intent to deceive is likely to succeed. Applicant, after all, probably is better placed to know what its customers want than outsiders.


Frank Herrera said...

You have no understanding of the Cuban exile mindset. Thus, your comment that Applicant wanted consumers to believe some deceptive material on the packaging is baseless. Applicant is indeed better placed to know what its customers want (more than outsiders, whomever an "outsider" is). However, because he knows what consumers want has no bearing on whether a mark is barred from registration under 2(e)(3). The language of the statute is whether "the place named in the mark" is geographically deceptively misdecriptive of the goods. There is no mention of the "packaging."

Frank Herrera

RT said...

Thanks for your comment. I don't know what the Cuban exile mindset has to do with this case, unless Cuban exiles are the target consumers, which does not seem to be what the opinion says. Moreover, it was the court that characterized the applicant's subjective intent, deciding the case on the assumption that it marked the packaging with intent to deceive. It's unusual to disregard evidence of intent in that way, since the applicant's intent is at least circumstantial evidence of how consumers are likely to react to the mark.

Frank Herrera said...

I've litigated this case for 8 years. You've taken 10 minutes to read and squib a case. The current state of 2(e)(3) case law is where it should be, i.e., a challenger to a mark has an extremely high burden to meet. The applicant in this case has used the mark continuously since 1997. Opposer commenced NON-US use of the mark in 2002. What should the result be if Applicant's mark is ultimately found to be barred from registration pursuant to 2(e)(3), the embargo is lifted and Applicant (Corporacion Habanos) begins to sell its GUANTANAMERA brand cigars in the US ... Opposer's use of the mark could arguably be permissible, at worst deemed geographically descriptive. However, Applicant's common law rights date back to 1997. Would it be equitable to give some rights to Opposer and not to Applicant who was in fact the first user of the mark in the U.S.? It's nonsense. All of this is non-sense stemming from the adoption of the excusable non-use affidavit etc... that allows Cuba to apply for trademark registrations and file oppositions/cancellations in the US without having any use of their marks in the US.

RT said...

You raise a number of different arguments, and I have no opinion on the law regarding Cuba specifically, or the outcome of a case predicated on common law rights. However, we will have to agree to disagree about the state of the law with respect to geographic misdescriptiveness. The Federal Circuit in California Innovations defied congressional intent and vitiated the NAFTA amendments and the law hasn't gotten any more sensible since then as that court has pumped up the materiality requirement.

Frank Herrera said...

okay dokey