On January 23, 2017, the TTAB dismissed Luxco, Inc.’s opposition to the registration of TEQUILA as a certification mark.

Trademark applicant Consejo Regulador del Tequila, A.C. is a Mexican industry group and is the only body accredited by the Mexican government to evaluate the Mexican Official Standards governing tequila. Since 2003, it has sought to register TEQUILA as a geographic certification mark to ensure that what is sold in the United States as Tequila adheres to the official Mexican standards.

Luxco is a St. Louis-based distiller. It imports Tequila, adds water and other spirits or flavorings to make what it refers to as a “distilled spirit specialty,” and sells its finished products to other distributors. According to Luxco, its use of Tequila does not comply with the Mexican standards. Luxco filed an opposition on the grounds that: (1) “Tequila” is a generic term for a type of distilled spirit; (2) Applicant cannot control the use of the term in the United States; and (3) Applicant committed fraud in its application.

First, the Board applied the traditional two-part test courts use to determine whether “Tequila” is generic: (1) what is the genus of goods or services at issue; and (2) is the term understood by the relevant public primarily to refer to that genus of goods or services? Here, according to the Board, the genus of goods was “spirits distilled from the blue tequila weber variety of agave plant,” and the relevant public was the purchasing public for those particular spirits. The Board rejected Luxco’s construction of the relevant public—“purchasers of hard liquor”—as being too broad. Next, the Board pointed to substantial evidence that showed the relevant public understands that Tequila is distilled and exported from Mexico, including: (1) numerous Federal Regulations identifying Tequila as a distinct product of Mexico; (2) numerous dictionary definitions connecting “Tequila” with Mexico; (3) advertising deliberately creating an association between Tequila and Mexico; (4) bottle labels of a variety of Tequila brands either stating that Tequila is made in Mexico, or using Spanish language words, places, or names; (5) numerous newspaper articles associating Tequila with Mexico; and (6) Applicant’s expert survey showing that 55.4% of the respondents said that the term “Tequila” indicates the product is made in Mexico.

Second, the Board rejected Luxco’s argument that Applicant could not control the use of the term “Tequila” as a certification mark for distilled spirits. Luxco asserted that the Tobacco Tax and Trade Bureau in the U.S. Department of the Treasury “is the sole agency with authority to enforce any of the regulations pertaining to importation, storage, bottling, advertising, labeling of distilled spirits products, including tequila, in the United States.” The Board disagreed because “[t]he TTB has no authority to make determinations as to trademark registrability under the Trademark Act.” The Board also rejected Luxco’s argument that the Mexican government, not Applicant, is the owner of the term “Tequila,” stating:

Because Applicant is the entity that verifies compliance with the Official Mexican Standard for Tequila and because the Mexican government through the Mexican Institute of Industrial Property authorized Applicant to apply to register the TEQUILA certification mark in the United States, we find that Applicant has the right and authority to control the use of the term as a certification mark in Mexico and in the United States . . . .

Finally, the Board found that Applicant did not commit fraud. In its application, Applicant had stated that the United States recognizes “Tequila” as an “appellation of origin.” Luxco argued that under U.S. alcohol labeling regulations, only wine can bear an appellation of origin. However, the Board held that Applicant had not made a material misrepresentation because it had cited to U.S. regulations governing distilled spirits that state, for example, “Tequila is a distinctive product of Mexico.” Nor did Applicant commit fraud by averring that “practically 100% of the tequila products sold in the world comes from a certified producer and certified brand.” Luxco cited two articles and a news report that stated Tequila is produced elsewhere in the world. The Board was not convinced, stating: “There is nothing in the record to support Opposer’s claim that Applicant’s statement was false or made with an intent to deceive the USPTO. Opposer does not offer one iota of evidence that Applicant’s statement . . . is false. The evidence, such as it is, is hearsay.”

The case is Luxco, Inc. v. Consejo Regulador del Tequila, A.C., Opp. No. 91190827.